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Tag: Subscriptions

  • Move Over Subscription Economy, Usage-Based Billing Is Here

    Move Over Subscription Economy, Usage-Based Billing Is Here

    Subscription pricing models may be an unforeseen casualty of the economic downturn, paving the way for usage-based billing.

    Subscription pricing models have permeated everything from cloud services to mobile apps and are a far cry from the early days of computing and the internet. For those old enough to remember, software was sold — often in a box — for a one-time fee for that major version of the software. When a major new version was released, users could usually pay a cheaper upgrade fee to move to the latest and greatest.

    With the rise of the internet, however, subscription models quickly dominated the market and all but supplanted the one-time fee model. Thanks to the economic downturn, however, Business Insider makes the case that subscription pricing may be on the verge of going the way of its predecessor.

    In place of subscriptions, usage-based billing is the new hot thing in the software market. Rather than a flat monthly rate, usage-based billing only charges customers for what they actually use. As Insider points out, this is not uncommon among cloud providers but is poised to spread out to other areas of the industry.

    The model could be a viable and appealing option for much wider use, especially as businesses are looking to rein in expenses wherever possible.

    “If you think about the evolution of business models, it’s always trended more and more towards being more friendly to the customer,” Rishi Jaluria, an RBC software analyst, told Insider. “It is very likely, in my opinion, that there will be more companies that are either on a consumption model or offer a consumption element to the model.”

    Jaluria’s views are shared even by those entrenched in the subscription model approach.

    “The best companies are saying, ‘We want to have a mix of models that really accommodates all our different customers,’” said Tien Tzuo, CEO of Zuora, a subscription-billing-management company. “Different customers might want different things as well.”

  • Want to Use Your BMW’s Heated Seats? That Will Cost $18 Per Month.

    Want to Use Your BMW’s Heated Seats? That Will Cost $18 Per Month.

    If you thought software subscriptions were a bad thing, wait until you buy your next BMW and have to pay $18 per month to use your heated seats.

    The software development industry helped popularize the subscription model. In theory, users are far more willing to pay a few dollars a month than a single large purchase. Evidently, not content with charging users tens of thousands of dollars for buying a car, many auto manufacturers are adopting the subscription approach, with BWM already proving to be the worst offender.

    According to The Verge, the automaker is charging a subscription for heated seats in the UK, Germany, New Zealand, and South Africa, although it remains to be seen when the change will make its way to the US and other countries. This isn’t the first such subscription feature, with the company transitioning several high-end features to a subscription model since 2020.

    As The Verge points out, the company is not exactly touting the change, given how much its customers have been condemning the practice. It’s one thing to charge a subscription for a feature that legitimately does require ongoing upkeep, such as navigation system updates, but it’s an entirely different thing to charge an ongoing fee to unlock hardware that is already built into the vehicle.

    With the cheapest BMW starting at nearly $40,000, and the most expensive model topping $135,000, it’s hard to see BMW’s plans as anything other than unmitigated greed and a desire to nickel and dime its customers for everything it can.

  • Twitter May Be Looking At Subscriptions to Boost Revenue

    Twitter May Be Looking At Subscriptions to Boost Revenue

    Twitter may be looking at subscription options in an effort to boost revenue and offset sluggish ad sales.

    Like many social media platforms, Twitter has seen a surge in users as a result of the pandemic. During the most recent quarter, the company’s Monetizable Daily Active Users (mDAU) grew some 34% year over year, coming in at 186 million.

    In spite of the good news, sluggish ad sales resulted in a 19% decline in year over year revenue. With $683 million in revenue for the quarter, Twitter saw an operating loss of $124 million.

    To help offset the ad business, Twitter is looking at a number of options, including subscriptions.

    We’re also in early stages of exploring add’l potential revenue products that complement our advertising business, which may include subscriptions & others. It is very early; we do not expect any revenue against these in 2020. $TWTR

    Twitter Investor Relations (@TwitterIR) July 23, 2020

    Subscriptions could be a game-changer for Twitter, giving it a way to better compete with new platforms. Only time will tell, however, if the company will commit to this route, and what the final version may look like.

  • YouTube TV Latest to Pull Out Of iOS In-App Purchases

    YouTube TV Latest to Pull Out Of iOS In-App Purchases

    In bad news for Apple’s App Store, YouTube TV has become the latest to turn its back on Apple’s in-app purchasing policies.

    Apple charges developers 30% of the price of their app to help run the App Store. For subscriptions things work a little different. Initially, Apple charges the same 30% of the subscription fee, although after a year that drops to 15%. Many developers have balked at the fees, believing Apple is charging too much.

    In some cases, companies have argued that paying Apple’s fee makes it nearly impossible to compete with Apple’s own subscription services. Alternatively, if a company does offer in-app subscriptions, the company stands to lose a significant amount of money over their own, non-App Store subscriptions.

    It seems Google is no longer willing to pay Apple’s price. In an email the company sent to individuals who had subscribed to YouTube TV via the App Store, Google has informed them that in-app subscriptions are no longer supported and their subscription will terminate March 13. Customers will need to sign up for a subscription on the website to continue watching the TV streaming service.

    As more and more developers look for alternatives to Apple’s subscription service and corresponding fees, the iPhone maker will need to address concerns and come up with better ways to incentivize ongoing participation.

  • Apple Is Trying To Be A Subscription Company

    Apple Is Trying To Be A Subscription Company

    “Just think about the long term value of Apple and where they’re going,”  says Chegg CEO Dan Rosensweig. “They were a phone company, they were an ecommerce company, and now they’re trying to be a subscription company. You see that in their services and their service numbers. They have the largest distribution system on the planet probably other than Google. If they commit to it there is no reason they can’t be successful.”

    Dan Rosensweig, President and CEO of Chegg, discusses how Apple has pivoted and is trying to become a subscription company selling services, leveraging its huge distribution system, in an interview on CNBC:

    Apple Is Trying To Be A Subscription Company

    Where Apple wants to make (their products) is where it’s cheapest and where they can make the best quality. They’re playing the game now sort of whack-a-mole which is watching the tariffs and all these things. Just think about the long term value of Apple and where they’re going. They were a phone company, they were an ecommerce company, and now they’re trying to be a subscription company. You see that in their services and their service numbers. The supply chain is a thing to talk about over the quarter but in the long term that is all going to be resolved. They’ll be wherever they need to be.

    They have the largest distribution system on the planet probably other than Google. They have been selling other people things through the iTunes store and through the app store. They bought companies in order to be able to sell news and other things and they sell their iCloud. They really have not gotten into content that they own in any significant way. Unless they commit to it they’re not going to be successful. But if they commit to it there is no reason they can’t be successful. 

    Most Of Apple’s Subscription Profit Is Coming From the iCloud

    If you ask what is it that Apple owns proprietarily and offers to their consumer in terms of content other than the iCloud itself, you really can’t come up with anything. Whereas, Adobe has all these software and services and Microsoft has these things. They’re sort of in the content area. They’re in the music subscription area. But even in the music subscription area, they don’t own the content. So it’s hard to make those things as profitable. Although, you can sign up a lot of people. 

    I would estimate that most of their profit from that is coming from just the iCloud. It’s selling storage that everybody needs because your phone is your home base. 

    Apple Is Well-Positioned In Wearables

    I think the iPhone is cyclical. There hasn’t been a big breakthrough. Everything has gotten a little smaller, a little better, a little cleaner, a little faster, and a little bit more secure. I don’t know what the next breakthrough is. What I do know is the need for mobility is endless. The kinds of things that are going to attach to our bodies seem to be endless. I think Apple is well-positioned to be that player. 

    Just in default mode, if you are a user of Apple products you prefer to use Apple products because it’s just easier. The payments there. The clicks there. The operating system is there. It’s just too familiar for you. They chose the highest-priced model. The highest-priced model is generally the smallest group and it ends quicker. The question is can they come up with lower-priced models and then make a lot of their money on subscription services.

    Apple Is Trying To Be A Subscription Company, Says Chegg Chegg CEO Dan Rosensweig
  • The Subscription Economy Is Taking Over The World, Says Gainsight CEO

    The Subscription Economy Is Taking Over The World, Says Gainsight CEO

    “What’s happening is that the subscription economy is just taking over the world,” says Gainsight CEO Nick Mehta. It shows up for our consumer lives with Netflix, Amazon, etc. It shows up at work as well. Because of that, all of those companies just can’t afford to just sell to their customers and move on. They’ve got to make them successful.”

    Nick Mehta, CEO of Gainsight, discusses how both B2b and B2C subscription businesses are booming because they are better for the customer in an interview on Bloomberg Technology:

    The Subscription Economy Is Taking Over The World

    I just heard about the deal (Salesforce buying Tableau Software for $15 billion) this morning. It just felt perfect for both sides. Tableau is one of the most respected companies in general and Salesforce has proven that they can buy companies and put them through their distribution channel. I think both customers are very committed to customer success.

    I think it just keeps accelerating. If you look at it overall there is a Subscription Economy Index that Zuora puts out and it shows that companies that are in subscription businesses are growing five times faster than the average S&P traded peer company. What’s happening is that the subscription economy is just taking over the world. It shows up for our consumer lives with Netflix, Amazon, etc. It shows up at work as well. Because of that, all of those companies just can’t afford to just sell to their customers and move on. They’ve got to make them successful.

    Subscriptions Are Great For Consumers

    Subscriptions are great for consumers. We get to choose what we want, we get to turn it on, and in most cases, we can turn it off. Sometimes we have to make a phone call to make that happen. The phone call is annoying but we have choice. In the business world that’s happening now. They have choice. Before they used to buy things, install them, and have no ability to switch. You were just stuck with what you got.

    In this new world customers have choice and therefore all the vendors, whether it’s a Salesforce or a Tableau or a Slack, have to proactively make sure that you are using all the stuff you buy and getting more value. Also, not just getting more value, that you are getting more value than any other alternative out there.

    There Is A Huge Megatrend That Is Happening

    Slack is a very special company. It’s sort of this triple threat. Customers love it, we run our whole business on Slack. The numbers are amazing in terms of growth rate, in terms of efficiency and net retention. Their existing customers keep spending more money with more than 140 percent net retention. They are also a great culture. I think Slack is one of those businesses that is built for the long term. They can go public in any market.

    There is a huge megatrend that is happening. We have almost this dissonance where technology in some ways is coming more into our lives and taking away more and more of humanity and the people in business. But on the flip side, all of us are longing for a more personal and human connection to the businesses that we work with. We are not ready to turn the whole world over to AI and machine learning. We need that human connection. What’s happening is companies are saying I need to treat my customers more like human beings. I need to be more proactively focused on customer success and make sure that they are getting value.

    They’re also saying I need to treat my employees more like human beings. I need to give them great technology like Slack, like Zoom, and like other great technologies that are going public this year that are helping employees be more successful. There’s this big approach, we call it human first business, which is really changing the way people think about work.

    The Subscription Economy Is Taking Over The World, Says Gainsight CEO Nick Mehta
  • YouTube Could Launch $10 Ad-Free Version in Late October

    YouTube Could Launch $10 Ad-Free Version in Late October

    We’ve known YouTube is working on a subscription service that will allow users to pay a monthly fee to ditch all the ads, but the company has never explicitly laid out a date for said service.

    Now, thanks to a recent email sent to content creators, we might see the option pop up as early as late October.

    Re/code has the latter, which is basically a warning to creators that they must accept updated terms or risk their video “no longer being available for public display or monetization in the United States.

    Here’s the full email:

    For years, YouTube’s fans have been telling us they want more — more choice when watching their favorite content, more ways to support their favorite creators and, above all, the option to watch their favorite videos uninterrupted.

    To give fans more choice we will be launching a new ads-free version of YouTube, available to fans for a monthly fee. This service will create a new source of revenue over time that supplements your advertising revenue. That’s why an overwhelming majority of our partners — representing over 95% of YouTube watchtime — have asked for and signed up for this service.

    As you heard in our previous emails, we want to ensure that fans who choose to pay for an ads-free experience can watch all the same videos that are available on the ads-supported experience. That’s why we’re asking you to update your agreement to reflect the updated terms for the ads-free service.

    To accept, simply log into YouTube.com as “pakafka” from a desktop or laptop and follow the prompts by October 22nd.

    If you haven’t signed by that date, your videos will no longer be available for public display or monetization in the United States. That outcome would be a loss for YouTube, a loss for the thriving presence you’ve built on the platform, and above all, a loss for your fans. We remain committed to working with you, as we always have. And of course, at any time, you can accept the updated terms which will make your videos public and monetizable again. Common FAQs can be found here.

    We believe these new terms will greatly strengthen our partnership for the future. We went through a similar process three years ago when we began distributing and monetizing your content on mobile devices. Today, mobile represents over half of all watchtime and mobile revenue is up 2x in just the last year. Just as with mobile, we’re confident this latest update will excite your fans and generate a previously untapped, additional source of revenue for you.

    If you have questions or encounter technical difficulties, we’re here to help: reach out to us for support here.

    The YouTube Team

    Re/code also suggest that the $10-per-month ad-free version will also include a subscription to YouTube Music Key, the company’s music streaming platform that’s been in beta since last November.

    Will people pay $10 a month to get rid of ads on YouTube? At this point, YouTube ads are just one of life’s certainties, like death and taxes. We know that in order to watch free videos, we’re going to have to sit through a 15 or 30-second ad (please let it be skippable, please).

    It may be a hard sell, getting people to pay for something that’s been free since its inception.

    Image via jm3, Flickr Creative Commons

  • PornHub Is Trying to Get You to Pay for Porn

    PornHub Is Trying to Get You to Pay for Porn

    Pornhub, the internet’s most-popular site for free porn videos, wants you to pay for porn.

    Not any old porn, mind you. Premium porn.

    The company has just launched Pornhub Premium, a $9.99-per-month subscription service that gives you access to over 100,000 high-def videos, 13,000+ full DVDs, 1080p streaming, and higher quality on non-premium videos – all ad-free. Pornhub Premium also provides exclusive content from many of the biggest names in porn production, like Brazzers and Reality Kings.

    Basically, Pornhub is billing this as the Netflix of porn.

    Will Pornhub sign some people up for this? Probably – there’s sure to be demand for high-quality streams. Some people do get sick of potato-quality porn.

    But the inherent problem with a subscription porn service is that there’s so much free porn out there. Not just on Pornhub, but everywhere. Everywhere.

    And hey, as they said in the above tweet, the free stuff isn’t going anywhere. Can’t blame a site for trying to make a little bit of money – and at least they are providing a lot of content behind this paywall.

    There’s a free 7-day trial if you’re interested.

  • Hulu May Let You Go Ad-Free for a Price

    Hulu May Let You Go Ad-Free for a Price

    One of life’s great annoyances (Why do I pay for Hulu but still have to sit through ads?) may be about to get mitigated. Kind of.

    Hulu is reportedly thinking about offering ad-free streaming – but there’s a catch.

    Netflix and Amazon Prime, for instance, offer ad-free streaming for all subscribers. Hulu’s plan, according to the Wall Street Journal, is to create another, more expensive tier for ad-free streaming.

    From the WSJ:

    Hulu’s code name for the project is “NOAH,” which stands for “No Ads Hulu,” the people familiar with the matter said. One of the people said the ad-free option could launch as early as this fall and be priced at around $12 to $14 a month.

     

    Such a price point, relatively high in the streaming world, would show that Hulu and its owners don’t want to encourage large numbers of existing subscribers to shift to the new ad-free service.

    That’s $4 to $6 more than Hulu’s regular subscription service, and $2 to $4 more expensive than Netflix.

    It’s clear that Hulu wants to explore all options in how to compete with Netflix, Amazon Prime, HBO, and other streaming platforms. The company has been making a lot of moves to produce original content and land high-profile exclusives as of late.

    But would you pay $14 a month for Hulu? That’s dicey.

    Image via Garrett Heath, Flickr Creative Commons

  • Trying Apple Music? Don’t Forget to Turn Off Auto-Renewal

    Apple just launched its streaming music competitor, Apple Music, and I’m sure you’re at least thinking about trying it out. Apple is offering up a free three-month trial, which is a pretty sweet deal. Who wouldn’t want to have access to unlimited music, on-demand, for free for three months?

    But you don’t want to wind up paying for it at the end, before you have a chance to cancel, right?

    When you elect to begin your free trial, Apple forces you to choose a plan structure (either the $10 single plan or the $15 family plan). It doesn’t charge you right away of anything, but it does set you up to auto-renew (see: start paying) for said subscription on the day your three-month free trial runs out.

    It’s an old game, played by many. Many a dollar has been made on free trials auto-renewing into paid subscriptions. We’ve all fallen victim (cough … Hulu).

    Here’s how to make sure that doesn’t happen, now, while you’re still thinking about it.

    First, head to your Apple Music app and tap the account icon at the top left corner. This will open up a page that looks like this:

    Screen Shot 2015-07-01 at 2.47.34 PM

    From there, select “View Apple ID”. That’ll pull up your Account Settings:

    Screen Shot 2015-07-01 at 2.47.46 PM

    Tap “Manage”. This will open up your active subscriptions:

    Screen Shot 2015-07-01 at 2.47.57 PM

    Now, all you have to do, is turn of auto-renewal. Piece of cake. And if you do happen to love Apple Music, you can come back here in three months and sign back up for a paid subscription.

    Now, head on over to Beats 1 radio and enjoy some censored Dr. Dre.

  • Google Play Music Now Has a Free, Ad-Supported Radio Tier

    To some people Google Play Music, Google’s subscription music streaming service, may have gotten lost in a sea of other offerings. But now, just a week before Apple launches its new music streaming platform, Google is reminding you about its own service and sweetening things a bit.

    Starting today on the web and soon on iOS and Android, Google is offering a free, ad-supported tier to Play Music.

    No, you won’t be able to call up songs on-demand. Much like Pandora or Spotify’s free tier, Google Play Music’s free tier is based around “radio” stations – curated playlists based on specific songs, artists, or moods.

    “At any moment in your day, Google Play Music has whatever you need music for—from working, to working out, to working it on the dance floor—and gives you curated radio stations to make whatever you’re doing better. Our team of music experts, including the folks who created Songza, crafts each station song by song so you don’t have to. If you’re looking for something specific, you can browse our curated stations by genre, mood, decade or activity, or you can search for your favorite artist, album or song to instantly create a station of similar music,” says Google Play Music product manager Elias Roman.

    Of course, the goal for Google is to get people in the door and hope they decide to upgrade to the paid tier. The company isn’t shy about this.

    “We hope you’ll enjoy it so much that you’ll consider subscribing to Google Play Music to play without ads, take your music offline, create your own playlists, and listen to any of the 30 million songs in our library on any device and as much as you’d like,” says Roman.

    Another day, another free, ad-supported internet radio. Google is banking on the fact that people will be interested in its “expertly” crafted playlists.

    And of course, there’s still this in the pipeline.

  • Apple Music May Force Spotify to Cut Family Plan Prices

    Apple Music May Force Spotify to Cut Family Plan Prices

    How will Apple Music fare in an already crowded field of streaming music providers? That’s yet to be seen. But it appears that its introduction is already affecting the market.

    Spotify, the biggest hurdle Apple Music will have to jump if it wants to dominate in this arena, might be looking to lower some of its prices to compete with Apple Music, which rolls out on June 30.

    Apple Music will cost $9.99 per month for a single user – just like Spotify. But Apple is offering a highly competitive family plan – six users for just $14.99 per month.

    Currently, Spotify’s family plans are $14.99 per month for two users, $19.99 for three, $24.99 for four, and $29.99 for five users. But Apple Music may have forced Spotify to reconsider that structure.

    From The Verge:

    “We already have similar family pricing in some markets and we expect to offer competitive pricing everywhere in the near future,” said Jonathan Price, Spotify’s global head of communications and public policy. He pointed out that in Sweden, Spotify already charges roughly $20 a month for a family of five.

    Apple Music didn’t seem to impress Spotify CEO Daniel Ek, who tweeted “Oh, ok” after the company revealed the new service at its WWDC conference Monday. He quickly deleted the tweet.

    Image via Björn Olsson, Flickr

  • Your Spotify Free Ride May Be Coming to an End, Claims Report

    File this under interesting, but unconfirmed, reports.

    Earlier this month, reports said that Apple was doing its damnedest to kill Spotify’s free tier. Apple, of course, is planning on relaunching is Beats Music-based streaming competitor this summer (likely at its Worldwide Developers Conference). The reports suggested that Apple has been attempting to convince the major record labels to stop licensing their music to the likes of Spotify and its free tier – in the hopes that such a decision would devastate Spotify’s business model.

    The goal being less competition for Apple’s music service, naturally.

    Now, Digital Music News is quoting “multiple sources” who say that Spotify may be bowing to pressure from the big labels and planning on limiting its free tier to a three-month trial.

    Apparently, new Spotify users would be limited to three months of free, ad-supported listening. Existing free tier users would have a six-month grace period before being forced to upgrade to a paid tier.

    “It’s weaning them off free, is one way to think about it, while making [Spotify] more in line with [other streaming services],” one source told Digital Music News.

    The seriously curtailed window is being presented as a ‘proposal,’ but one source pointed to limits on the “spirit of collaboration” being floated. “This was drafted as a sort of compromise idea in mind,” one source described to Digital Music News, while also noting that “close observation” will determine if users are pushed towards premium plans more aggressively.

    Spotify has over 60 million users worldwide. Only a fourth of them pay for the service. It’s hard to imagine Spotify forcing everyone to pay at some point, as that could kill subscriber counts. But Spotify’s whole schtick is that it gets people in the door with its free tier, and hopefully they become paid subscribers.

    Once again, this is a one-source report, so take it with a grain of salt. But it’s an interesting thought – is your Spotify free ride coming to an end?

    Image via Björn Olsson, Flickr

  • Spotify Launches ‘Tweet the Beat’ Ads, Even for Premium Users

    Spotify Launches ‘Tweet the Beat’ Ads, Even for Premium Users

    If you pay $10 a month for Spotify premium, one of the major reasons you do that is to avoid ads. But Spotify’s new in-app ads, which act more like suggestions for you to tweet out an ad on Spotify’s behalf, are being served to all users – premium subscribers included.

    The new pop-up ads are appearing on both desktop and mobile, and are called “Tweet the Beat’. The ads focuses on Rihanna and her new single “Bitch Better Have My Money”. The ads prompt users to tweet a thank you to Rihanna for the new single.

    Here’s the auto-generated tweet you’ll send out if you choose to “tweet the beat”:

    Spotify confirmed the new feature to The Verge, saying,

    “What you’re seeing is a new feature called Tweet the Beat which lets listeners express love and appreciation towards the artists they follow or listen to often, and has been designed as a great way for fans to get closer to their favourite artists.”

    Right now it’s only Rihanna, but from Spotify’s statement it’s clear the streaming company wants to expand this to more artists.

    Image via EJ Hersom, Wikimedia Commons

  • YouTube’s Ad-Free Subscription Offering Is on the Horizon

    YouTube’s Ad-Free Subscription Offering Is on the Horizon

    Apart from Justin Bieber videos and comment trolls, ads are the most annoying thing about YouTube. But most of us have come to accept that we’re going to have to watch five, 15, or god forbid 30 seconds of an ad before our video plays – and even during our video plays if the video is long enough. It’s just a fact of life – death, taxes, and YouTube ads.

    But if there were a way to remove ads from the equation, what would you pay?

    If your answer is around 10 bucks a month or something, then you’re in luck. YouTube’s long-discussed ad-free subscription plan is on the horizon, and it looks like that’ll be the price point.

    YouTube confirmed the offering in a letter to its partners, saying the new ad-free paid subscription will “generate a new source of revenue that will supplement [thier] fast growing advertising revenue.”

    “We’re confident this latest contract update will excite your fans and generate a previously untapped, additional source of revenue for you,” said the YouTube team in the letter.

    According to YouTube’s updated Terms of Service, that will amount to 55% of total net revenues from the new subscription fees. Partners must participate in the subscription program, or risk their videos being set to private – according to source quoted by The Verge.

    “YouTube will pay you 55% of the total net revenues recognized by YouTube from subscription fees that are attributable to the monthly views or watchtime of your Content as a percentage of the monthly views or watchtime of all or a subset of participating content in the relevant subscription offering (as determined by YouTube). If your Content is included in and viewed by a user in multiple subscription offerings, YouTube will pay you based on the subscription offering with the highest amount of net revenues recognized by YouTube, as calculated by YouTube.”

    No official word on when YouTube will begin offering users the option to make the ads disappear or how much it will cost exactly. The Verge says it’ll cost around $10. Bloomberg says it should be coming in the next few months. The new terms for partners take effect June 15.

    YouTube would only give this standard response:

    “While we can’t comment on ongoing discussions, giving fans more choice to enjoy the content they love and creators more opportunity to earn revenue are always amongst our top priorities.”

    Ad-free sounds great. But who would pay for YouTube? Aren’t we all just used to YouTube being free?

    Here’s what I had to say when this option was rumored way back in October:

    The question then becomes … who would pay for YouTube?

    You may or may now know that YouTube has already been experimenting with paid subscriptions on a smaller scale. Since May of last year, YouTube has offered paid channels. YouTube lets the channel creator set their own price (which could be anywhere from $0.99 a month to a few dollars a month), and then takes a cut of the profit. Paid channels started with a few dozen partners and soon expanded, but the initiative hasn’t really taken off – at least not as much as YouTube would’ve hoped.

    Nearly a year and a half later, there are only 281 paid channels on YouTube.

    And the problem that befalls paid channels could also affect YouTube’s move into offering a site-wide paid subscription service.

    Is the content really worth paying for?

    It’s one thing to pay a monthly or yearly fee to watch Game of Thrones or to listen to Led Zeppelin. It’s a whole different thing to pay money to watch babies laugh, cats chase laser pointers, and drunk people falling down stairs.

    I know there’s much better content on YouTube than that – but you get the point.

    YouTube caricature aside, a lot of people would likely have a problem justifying a monthly payment for YouTube. We’re all so used to YouTube being free. You know what we’re also pretty used to? Ads. It’s just a part of the experience now. Are you really that annoyed by ads to warrant paying for YouTube?

    YouTube has already made a move toward paid models. You might recall its music service, YouTube Music Key, is currently in beta. It’s an interesting concept, for sure – one that would put YouTube in the same breath as streaming platforms like Netflix.

    But will people play for YouTube? And is going “ad-free” enough of a carrot to dangle? Maybe if YouTube made a show like Game of Thrones and put it behind a paywall.

  • Nickelodeon Is Working on a Subscription Streaming Service

    Nickelodeon Is Working on a Subscription Streaming Service

    Spongebob is coming to a streaming device near you.

    Nickelodeon will soon unveil its own subscription streaming service, according to the network’s parent company Viacom.

    Variety has the details, which so far are pretty sparse:

    More details about the service will be revealed when Nickelodeon hosts its “upfront” meeting with advertisers next month. U.S. TV networks try to sell the bulk of their ad inventory in the upfront market, and TV networks that cater to children typically lead the salvo.

    The new Nickelodeon service will be aimed specifically at consumers who use mobile devices, Viacom Chief Executive Philippe Dauman said during a call held to discuss Viacom’s financial performance. He suggested the service would have a different name or brand, and said it “will be very attractive to parents and children.”

    Nickelodeon will be joining a growing list of networks offering online streaming options to those who don’t wish to be tethered to a traditional cable provider. Major broadcast networks like CBS are jumping into the space that’s currently dominated by Netflix and Amazon Prime, as are premium cable outlets like HBO.

    Nickelodeon, however, is one of the first basic cable channels to move in this direction.

    Other cable channels like TNT, TBS, Cartoon Network, and Disney have just dipped their toes in the world of cable-less streaming, joining the lineup for DISH’s new Sling TV.

    Image via Spongebob SquarePants, Facebook

  • YouTube Music Key Launches in Beta

    YouTube Music Key Launches in Beta

    “Since the beginning, you’ve been making music better. Now it’s our turn.”

    That’s what Google’s YouTube is saying of its just-unveiled subscription music service. Long-rumored, YouTube Music Key is launching in beta. You can sign up for an invite here.

    So, what is YouTube Music Key?

    It’s a $10 per month subscription service that offers ad-free music, background play, and offline viewing. YouTube is offering a free six-month trial and a discounted price of $8 per month. Your Music Key subscription will also include a subscription to Google Play Music (and retroactively, vice versa).

    “Thanks to your music videos, remixes, covers, and more, you’ve made YouTube the biggest music service on the planet. To turn YouTube into your perfect music service, we’re launching YouTube Music Key as a beta with our biggest music fans first, and then we’ll bring YouTube Music Key to the whole world together,” says Google.

    Convincing people to pay for something that they’re used to getting for free is a challenge – but with YouTube’s sheer size and user base, soliciting just a few converts would make it worth it for the company.

    Image via YouTube Music Key

  • Would You Pay for an Ad-Free YouTube?

    Would You Pay for an Ad-Free YouTube?

    The sky is blue, grass is green, water is wet, and YouTube is free. For many, many years we’ve all lived in a world where one can just go to a website and watch billions of hours of video – for free. I don’t think it’s Google fawning to say that YouTube, and its open, unrestricted video database, is one of the most important and influential entities of the internet age.

    The free, ad-supported model that YouTube has employed for years has worked – in that YouTube is the biggest video site in the world. Most internet users have simply accepted that, in order to watch videos on YouTube, you’re going to have to sit through an ad. It might be 30 seconds, it might be 15. YouTube might even let you skip it after five seconds. But chances are, you’re going to have to sit through some advertising before your free content plays (and possibly during said content).

    Maybe that doesn’t have to be the only way. In the near future, you might have the option to pay for YouTube. Why would you pay for an already-free service? To join an ad-free wonderland, of course.

    Are YouTube ads annoying enough to justify paying to get rid of them? Do you think a subscription-based model is a good idea? Let us know in the comments.

    Speaking at Re/code’s Code/Mobile conference, YouTube CEO Susan Wojcicki said that YouTube is thinking about offering an ad-free subscription service.

    From Re/code:

    “YouTube right now is ad-supported, which is great because it has enabled us to scale to a billion users; but there’s going to be a point where people don’t want to see the ads,” Wojcicki said in an onstage interview. Consumers generally “will either choose ads, or pay a fee, which is an interesting model. … We’re thinking about how to give users options.”

    “We’ve been thinking about other ways it might make sense for us [at YouTube]. We’re early in that process, but if you look at media over time, most of them have both ads and subscription services,” she added.

    She’s right, of course. Take Spotify for instance. The popular streaming music service offers “tiers” – the lowest of which is an ad-supported free tier. Spotify then allows users to pay to, among other things, get rid of the ads. As it stands, about one-quarter of all Spotify users choose a paid tier.

    Providing the YouTube viewer with an option is great and all, and that surely factors into YouTube’s considerations, but make no mistake – offering a paid subscription model is mostly about keeping the creators happy.

    Look at what Wojcicki went on to say:

    “There are going to be cases where people are going to say, ‘I don’t want to see the ads, or I want to have a different experience,’” she said. “We’re always watching, always trying to innovate. It’s similar to the ad market in a lot of ways: There are always new ad platforms coming out, but at the end of the day people say, I’m going to go to the one that generates the most revenue for me.”

    Right now, and for the foreseeable future, YouTube is in no danger of losing its online video crown. With 100 hours of video uploaded to the site every minute and over a billion unique visitors a month, YouTube is by far the biggest video site on the planet. But even so, YouTube knows it has to keep the content flowing. If content creators aren’t happy with the amount of money they’re making on YouTube, there could be a minor to major problem – depending on the specific talent and the scope.

    Well, are they happy?

    Though you’ve no doubt heard many a success story – teens in their dorm rooms making thousands of dollars a month on YouTube – the reality is that things aren’t quite what they used to be. Some reports indicate that advertising rates have fallen, which isn’t great for a system where monetization is entirely dependent on an ad-based revenue share.

    Sure, YouTube has made it easier than ever to make money by opening the gates and letting more and more channels qualify for monetization. The company has also automated the process and to be fair, it’s super easy to get started.

    But it’s clear that YouTube knows it needs another option – another way for content creators to earn. Paid subscriptions could be that option.

    The question then becomes … who would pay for YouTube?

    You may or may now know that YouTube has already been experimenting with paid subscriptions on a smaller scale. Since May of last year, YouTube has offered paid channels. YouTube lets the channel creator set their own price (which could be anywhere from $0.99 a month to a few dollars a month), and then takes a cut of the profit. Paid channels started with a few dozen partners and soon expanded, but the initiative hasn’t really taken off – at least not as much as YouTube would’ve hoped.

    Nearly a year and a half later, there are only 224 paid channels on YouTube.

    And the problem that befalls paid channels could also affect YouTube’s move into offering a site-wide paid subscription service.

    Is the content really worth paying for?

    It’s one thing to pay a monthly or yearly fee to watch Game of Thrones or to listen to Led Zeppelin. It’s a whole different thing to pay money to watch babies laugh, cats chase laser pointers, and drunk people falling down stairs.

    I know there’s much better content on YouTube than that – but you get the point.

    YouTube caricature aside, a lot of people would likely have a problem justifying a monthly payment for YouTube. We’re all so used to YouTube being free. You know what we’re also pretty used to? Ads. It’s just a part of the experience now. Are you really that annoyed by ads to warrant paying for YouTube?

    Maybe getting rids of ads isn’t enough. To get people on board with paying for YouTube, maybe the company would have to offer some other perks. Who knows, maybe some sort of music service?

    How do you feel about this? Would you even consider paying for YouTube? Let us know in the comments.

  • Tinder Is Finally Going to Try to Make Some Money

    Though swipe left / swipe right dating app Tinder is growing in popularity (it’s currently in the top 25 free apps in the App Store), the company currently has no monetization strategy. In other words, Tinder is completely free and it’s not ad-supported.

    This will be changing soon.

    Speaking at Forbes’ Under 30 conference, Tinder CEO Sean Rad proposed a rad new idea – a premium Tinder service that would expand the app’s matchmaking features.

    From Forbes’ Steven Bertoni:

    Rad wouldn’t give me specifics but hinted that one of the new features will focus on travel and could help Tinder move into markets beyond dating. Currently location based, Tinder lets you swipe though an endless stream of photos of people looking to meet up — but only the city you’re currently in. The new premium service will likely let users break away from location limits and expand their Tinder reach. “We are adding features users have been begging us for,” said Rad. “They will offer so much value we think users are willing to pay for them.”

    It’s important to note that Rad also indicated that the Tinder you know and love will remain free. The “premium” paid service will be an extra, not a sudden charge for the normal set of features.

    From that cryptic announcement, it looks like Tinder could be looking to not only expand the “hook-up” offerings geographically, but possibly move away from the “hook-up” matching a little bit and offer some other types of match-ups. Professional, even?

    Apparently, this will launch in November. Keep your eyes peeled. Meanwhile, keep on swipin’ right.

    Image via Tinder, Facebook

  • HBO’s New Streaming Service Could Cost $15 a Month

    HBO’s New Streaming Service Could Cost $15 a Month

    Would you pay $15 a month for a service that let you watch all of HBO’s content without the bulky ball and chain of a cable subscription?

    Apart from the format it will take, pricing is the number one question mark surrounding HBO’s just-announced plunge into cordcutting. How much will a standalone HBO subscription service cost?

    About as much as it costs when paired with a cable subscription, according to a report.

    Martin Peers writes for The Information that a source close to the matter says the new cable-free offering will be priced at around $15 or so a month, or close to as much as HBO costs nowadays. Apparently, it’s unlikely to be any less than that.

    Of course, this puts the hypothetical HBO streaming service on a shelf above competitors like Netflix ($8), Hulu Plus ($8) and Amazon Prime (a little over $8 a month when averaged out from yearly price).

    Then again, none of those companies make Game of Thrones. At least not yet. Netflix is the closest so far to offering truly great original programming.

    Despite the not-insignificant price gap, there is precedent for people being willing to pay more for HBO. Remember that Take My Money, HBO campaign that generated nearly 200,000 tweets? Thousands of people tweeted at price at HBO, basically saying here, this is what I would pay if you would just offer a standalone HBO Go damnit.

    Someone analyzed those tweets and found that the average price people said they would pay was a little over $12. And there were plenty of tweets that said $15, $20, and even more.

    But the reality is more complicated. Why pay that much for HBO when you can just pirate it. Why pay that much for HBO when you can just use someone else’s HBO Go password? Why pay that much for HBO when HBO basically only offers its own shows and original movies, plus a handful of about 100 other movies?

    Speaking of which, HBO is going to have to make some deals to populate any hypothetical streaming service with more movies.

    Anyway, the market for an HBO $15-a-month standalone streaming service is there. How big is that market? I guess we’ll see sometime in the next year. That’s HBO’s timeline for unveiling this new venture.

    Image via HBO, YouTube

  • CBS, Like HBO, Is Also Cutting the Cord with New Streaming Service

    CBS, Like HBO, Is Also Cutting the Cord with New Streaming Service

    Not to be outdone by HBO and their theoretical cable-free content platform, CBS has announced a new subscription service that lets users watch the network’s programming both live and on-demand.

    It’s called CBS All Access, and it’s launching today on desktop, iOS, and Android. For $5.99 a month, users can watch full current seasons of 15 primetime shows (with new episodes appearing the day after air), as well as full past seasons of eight series. CBS All Access also offers full season of ‘classic’ shows like Star Trek, Twin Peaks, and Cheers. The list can be found here.

    More interesting than this aspect, possibly, is the fact that CBS All Access will allow users to livestream their local CBS channels on their devices. It is currently market-dependent right now, however, and limited to New York City, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Boston, Detroit, Minneapolis, Miami, Denver, Sacramento, Pittsburgh and Baltimore. CBS says more markets are coming soon.

    “CBS All Access is another key step in the Company’s long-standing strategy of monetizing our local and national content in the ways that viewers want it,” said Leslie Moonves, President and CEO, CBS Corporation. “This new subscription service will deliver the most of CBS to our biggest fans while being additive to the overall ecosystem. Across the board, we continue to capitalize on technological advances that help consumers engage with our world-class programming, and we look forward to serving our viewers in this new and exciting way.”

    The livestreaming will cover some sports programs (the ones CBS has rights to) like The Masters and SEC sports – but the glaring omission here is the NFL. You will not be able to watch NFL football via CBS All Access. At least not yet. The New York Times reports that talks are at least underway.

    CBS is the first major network to cut the cord, so to speak, and allow people to stream its content online without a cable subscription – but unlikely to be the last. Though Fox, ABC, and NBC all have Hulu to distribute their content for a subscription fee, it wouldn’t be surprising to see those other major networks launch their own cable-free internet service and reap all the benefits for themselves.

    Image via CBS All Access