Subscription Economy News – Week of 5/07/18

By Aarthi Rayapura May 10, 2018

Every week, we bring you the top stories and analyses from the global Subscription Economy!

Nintendo is launching an online service for the Switch
By Ryan Browne in CNBC
Nintendo is launching a paid online service for its popular Switch console in September.The Japanese gaming company unveiled details of the new membership service Monday. It includes access to a library of 20 games from Nintendo’s classic NES console, as well as cloud backup for game saves.

An annual subscription will cost users either $3.99 a month, $7.99 every three months or $19.99 for the year. That’s cheaper than online services offered by Sony’s Playstation and Microsoft’s Xbox, which cost $59.99 annually. The company also announced a family subscription model, which lets up to eight users sign onto one account. An annual family membership will cost $34.99.
Read the full article here

For Disney stock to soar, it has to convince Wall Street it’s actually a service
By Eric Jackson in CNBC
Disney’s stock has treaded water for three years now at $100 a share or a $150 billion market capitalization. That’s mainly because Wall Street views it as a media stock in secular decline with its highly profitable cable networks disappearing without a clear path to an equally profitable over-the-top (OTT) future.

Disney — like all traditional media companies — is viewed by Wall Street as being worth nine to 14 times its enterprise value (EV) to EBITDA. But that’s the wrong way to view it. Disney should correctly position itself as a “Disney as a Service” company. If it did, it would get valued — like other services companies — on a price-to-sales (P/S) basis.

Unlike most media companies, Disney has the opportunity to quickly reshape its perception on Wall Street and be seen as a powerful subscription-based service offering access to unique online and offline experiences on a repeatable timeline.
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Torstar to move to a subscription model, charge readers for online news
By Emily Jackson in Financial Post
Torstar Corp. plans to charge readers for online news once more in its latest strategy to recover after the internet disrupted the newspaper industry.

Chief executive John Boynton announced Wednesday that the media company, owner of the Toronto Star and dozens of other publications, will move to a digital subscription business model, emulating recurring revenue models in industries such as music and entertainment.

“In some cases, it turned around entire industries,” Boynton said at the annual general meeting in Toronto, pointing to Spotify and Netflix as success stories.

Boynton did not reveal details on the subscription model, including when it will launch or how much it will cost, but said it will apply to the Toronto Star and StarMetro brands. The Globe and Mail and the National Post already use online subscription models.
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For more on what’s making news in the Subscription Economy, check out Zuora’s Subscribed Magazine!