“Apple users spent $2.7 billion on subscriptions in the App Store in 2016, an increase of 74 percent over 2015. Last week, the music service Spotify announced that its subscriber base increased by two-thirds in the last year, to 50 million from 30 million . Apple Music has signed on 20 million subscribers in about a year and a half. In the final quarter of 2016, Netflix added seven million new subscribers — a number that exceeded its expectations and broke a company record. It now has nearly 94 million subscribers.”
Netflix has nearly 94 million subscribers.
That’s an amazing number. Those aren’t “users.” Those are people who pay for the service.
For years I’ve joined the chorus lamenting the impending doom of creativity, content, and culture. No one will ever pay for anything .
I think back to that moment 10 years ago when I realized that online advertising was a race to the bottom for all but a few massive companies. I was distraught. Really, I was legitimately upset. I was fascinated by the internet’s possibilities, yet it seemed to be built on a pile of sand. I wondered how it would all play out. I wondered if I needed to find a new line of work.
And yet, here we are.
When I consider my own digital subscriptions I’m struck by how easily and naturally they’ve arrived. At a certain point, each one just made sense and just fit in.
After reading through this Mashable piece, it’s clear that all of the FT’s paywall experience — and, importantly, all of its related data — has made the organization quite savvy. For example:
Looking through some of the reader data — the FT’s data team now numbers more than 30 across three groups — the FT was able to recognize the kinds of patterns readers display before purchasing subscriptions. “We would see the sort of articles they were reading and the frequency they were reading those articles, for instance, and we began to map those,” [CEO John] Ridding explains. “People do behave in predictable ways.”
“… the FT was able to recognize the kinds of patterns readers display before purchasing subscriptions.”
“Paywalls are psychological as much as navigational, and it’s a lot easier to put them up than to take them down. Once web users get it in their head that your site is “closed” to them, if you ever change your mind and want them to come back, it’s extremely difficult to get that word out.” — Scott Rosenberg, former managing editor of Salon.com
Viacom has to ensure that placing television shows and films online adds to its profit, through sources such as advertising sales, subscription fees and revenue from enabling users to buy content by downloading it, [Philippe] Dauman said. The viability of such a model relies on strong intellectual property safeguards, he said. [Link added.]
And here’s a passage from an AP story looking at a similar online offering from Comcast:
Comcast executives said the company plans to generate revenue by adding more and different types of ads on the sites. But the company’s goal is not necessarily to profit from it but to keep subscribers happy enough so they don’t cut the cord or defect to a competitor. [Emphasis added.]
The content creator is worried about direct revenue from the content, while the platform provider is more concerned about keeping its subscribers happy. It’ll be interesting to monitor Comcast’s mindset if/when that NBC deal goes through.
“Quality journalism is not cheap,” Mr Murdoch said, noting that the success of The Wall Street Journal’s online subscription offering has convinced him that consumers will pay for news online that differentiates itself from the mass of information available free on the web. “A newspaper that gives away its content is simply cannibalising its ability to produce good reporting.”
There’s a fine distinction within this excerpt: The Wall Street Journal is not a newspaper. It’s a provider of targeted information that its audience uses to guide financial decisions. The value proposition is driven by the actions and outcomes the information facilitates. General news rarely offers this type of value, which means the commonalities between the WSJ and newspapers are limited to bits, print, ink and distribution.
That’s not to say the WSJ doesn’t provide a lesson for general news publishers. The key is to provide tangible, actionable value for the audience via content. That’s what WSJ subscribers are buying (or configuring …)
“Piracy is essentially the consumer’s wish to have everything on demand. It’s not like people want to necessarily have it for free,” Mr. Ek said. The problem is that there have not been commercial services “that allowed people to discover new music and easily share music with friends,” he said.