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Five on Friday: Growth, Penalties and Paring Down Print
Kathleen Greenler Sexton --- Subscription Expert Kathleen Greenler Sexton --- Subscription Expert
For Immediate Release:
Dateline: Boston , MA
Friday, October 11, 2019


Featuring the Pittsburgh Post-Gazette, Facebook and Stitch Fix

Five on Friday: Growth, Penalties and Paring Down Print

Source: Pixabay

If you are tired of impeachment news, check out our Five on Friday features instead: a new study shows that nearly half of U.S. broadband homes subscribe to more than one streaming service; in seven-and-a-half years, the subscription economy has grown by 350%; Stitch Fix goes beyond just subscriptions; the Pittsburgh Post-Gazette is the latest newspaper to pare down its print operation; and Facebook agrees to a $40 million settlement for misleading advertisers on the potential success of video ads.

Study: More People Subscribe to 2+ OTT Services Than Ever Before

Five on Friday: Growth, Penalties and Paring Down Print
In the last five years, the number of U.S. broadband homes that subscribe to more than one streaming video on demand service has more than doubled, reports Parks Associates and Deadline. Forty-six percent of homes with broadband have several subscriptions (e.g., Netflix, Hulu, Amazon Prime). This is a big jump from 33% in 2017 and 20% in 2014.

Why? Part of that is because there are so many more streaming services to choose from now. In the last five years, the number of services available has grown by nearly one-a-half times. At the beginning of this year, there were about 235 subscription services available in the U.S., the study shows. This year we have seen new services launch, and others hit pause or go away.

But two big launches are just weeks away – Disney+ and Apple TV+. While those may not add much to the total number of services, they are sure to bump up the number of services people subscribe to. Another reason people subscribe to more than once service is because they can’t find all their shows in one spot.

I’ll admit that I have added an extra service for a short time to watch a particular show, particularly if I am on a binge. How many OTT subscriptions do you have? Do you plan to subscribe to any of the new services coming out – Disney+, Apple TV+, Peacock?

Subscription Economy Has Grown More than 3.5 Times Over 7.5 Years

In a similar trend, the subscription economy has grown by more than 350% in seven-and-a-half years, says Zuora in its biannual Subscription Economy IndexTM (SE). More and more industries are finding the value in using the subscription model, including everything from software as a service (SaaS), publishing, media, retail products, cars, the Internet of Things (IoT) and more.

Five on Friday: Growth, Penalties and Paring Down Print
“The Subscription Economy is not limited to one or two industries. We’re now seeing sectors far and wide placing subscriptions, over pure-play products, at the center of their businesses to achieve rapid and sustained long-term growth,” said Dr. Carl Gold, Chief Data Scientist at Zuora. “The SEI report showcases the transition to subscriptions beyond the boundaries of traditional SaaS organizations into the Manufacturing and Business Services sectors, exposing the phenomenal value of the subscription business model in today’s digital age.”

Here are a few key takeaways from that report:

  • Industries with the lowest churn rates were business services (16.2%) and manufacturing (20.4%).
  • Industries with the highest churn rates were media (37.1%) and publishing (28.2%).
  • The publishing industry had the least amount of revenue from usage-based pricing, at 17%. Business services had the highest at 57%.
  • Add-ons and upsells contribute to high average revenue per account.

Read more from the SEI summary here or download the report here.

Stitch Fix Expands with Out-of-the-Subscription-Box Thinking 

Stitch Fix is finding new ways to think beyond the traditional subscription box with a personal, stylized looks for their subscribers. These changes have helped the company grow net revenue to $1.58 billion, representing growth of 29% year-over-year, reports Apparel magazine. As an occasional Stitch Fix subscriber and shopper, I see a lot of new things on the Stitch Fix website – men’s clothes, kids’ clothes, extras (sleepwear, undergarments). I particularly love the new Shop Your Looks feature, which is ingenious.

Here’s how it works. Based on a subscriber’s style profile, Stitch Fix sends a shipment of clothing and accessories to the shopper, along with suggested looks on handy, perforated notecards. The shopper chooses what items she wants and returns the rest at no charge. Stitch Fix keeps track of a shopper’s purchases and, when they visit the Stitch Fix site, they can view their looks which includes items they bought and items they didn’t. Shoppers can buy the same items in other colors or sizes, if available, and purchase coordinating items they didn’t buy the first time.

Five on Friday: Growth, Penalties and Paring Down Print

Source: Stitch Fix

This program is currently in beta testing, but Stitch Fix is having success with it. According to Apparel, one-third of clients who visit Shop Your Looks engage the site multiple times and about 60% purchased two or more items (I’ve already purchased one more – for research purposes). Read more about Stitch Fix’s advances and out-of-the-subscription-box thinking on Apparel.

'Pittsburgh Post-Gazette' Drops Print to Three Days a Week 

Last week the Pittsburgh Post-Gazette became the latest newspaper to scale back its print operation. On Mondays, Tuesdays, Wednesdays and Saturdays, readers will have to get their Western Pennsylvania news online at Post-Gazette.com via the website, mobile phone or table or on the NewsSlide app. The newspaper will delivery newspapers on Thursdays, Fridays and Sundays, and readers can buy the Weekend Edition of the newspaper in stores on Saturdays. The newspaper also said it is adding “more on Sunday” that includes a week’s worth of comics including classics like Blondie, Sally Forth and Family Circus.

“We believe the future is digital. We are maintaining our news department and the quality of the Post-Gazette. We have no plans to cut back our commitment. We will remain flexible as to how we implement the digital future based on local competitive and market developments,” Allan Block, chairman of Block Communications, said in June 2018, when the PG eliminated Tuesday and Saturday print editions. That philosophy continues as the newspaper adds two more digital-only days beginning Sept. 30.

“We believe that e-delivery of the news is faster and more user friendly than print delivery and allows us to give the reader more news in more ways than ever before. It is a superior means of delivery for what we intend to be, an even better and more in-depth journalistic product,” said Block.

Who will be next?

Five on Friday: Growth, Penalties and Paring Down Print

Source: Pittsburgh Post-Gazette

Advertisers Could Get A $40M Settlement from Facebook for Misleading Video Metrics

Five on Friday: Growth, Penalties and Paring Down Print
Advertisers who have filed a class action suit against Facebook for overstating the value of video could get $40 million to settle their claims. According to Hollywood Reporter, about one-third would go to pay for the attorneys of several ad agencies who filed suit against Facebook. The remainder would go back to the agencies who believe they were misled by Facebook who overstated the average time users spent watching videos by 150% to 900%. Facebook says the claim is without merit, but by settling, they could avoid an estimated $100 million to $200 million in damages. Prior to agreeing to a settlement which was achieved through mediation, Facebook filed four motions to dismiss.

The 33-page brief outlines the plaintiffs’ case which they filed in U.S. District Court for the Northern District of California Oakland Division in October 2016. The advertisers alleged that two of Facebook’s video metrics were flawed, causing advertisers to purchase video ads on Facebook they might not otherwise have purchased (average duration of video viewed and average percentage of video viewed). The average watch times were allegedly overstated for a period of 18 months, and the plaintiffs alleged that Facebook knew or should have known about the error. Facebook admits the error but says it was innocent. For many companies, $40 million would be significant. For Facebook, this is just a slap on the wrist and not enough to affect real change.

Dana Neuts is Subscription Insider's Senior Staff Writer, covering our daily subscription news as well as member features, case studies, and reports.  

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