Every week, we bring you the top stories and analyses from the global Subscription Economy.
Subscription Revenue Grew 5x Faster Than S&P 500 Company Revenue
Yahoo Finance’s Adam Shapiro joins Zuora Founder & CEO Tien Tzuo to discuss the rising subscription preference over ownership.
Video Game Spending Was Driven By Microtransactions In 2018
Excerpts from an article by Erik Kain in Forbes
2018 was a great year for the US video game industry according to the NPD Group. Overall, industry spending in the US was up 13% over 2017, with total spending reaching $16.67 billion over 2017’s $14.716 billion. This number doesn’t include everything, however. Once you figure in subscriptions and microtransactions, total spending balloons to $43.4 billion over the previous year’s $36.9 billion.
Hardware, Software and Accessories & Game Cards all saw growth in 2018. Hardware was up 8%, driven largely by the Nintendo Switch. Software, not including MTX or subscriptions, was up 7%. But Game Accessories & Game Cards (headsets, gamepads, etc.) was up a whopping 33%.
Still, the total of all three of those categories was just $16.67 billion. That’s not even half of the total $43.4 billion the NPD says US consumers spent on video games in 2018. In fact, that leaves $26.73 billion up for grabs, all of which comes from the NPD’s “Software, including in-game purchases and subscriptions” category.
When you look at it in this light you can really see why Games As Service have taken off in recent years, and why the industry puts so much emphasis on microtransactions.
Read the full article on Forbes
Jeep running pilot programs for car sharing, subscriptions
Excerpts from an article by Andrew Krok on CNet.com
Fiat Chrysler will use one of its most popular brands to trial some additional mobility services with the help of some notable partners.
Fiat Chrysler will establish pilot programs for peer-to-peer car sharing and a separate subscription service, Bloomberg reports, citing an interview with Tim Kuniskis, the head of Jeep’s North American operations, at the 2019 Detroit Auto Show. Both pilot programs will run for three months, and both begin next week.
For its P2P car sharing service, FCA will hook up with Turo, one of the most prominent companies in that field. According to Bloomberg, the automaker is working on recruiting owners to sign up and make some money on the side by renting their vehicles out for others to use.
On the subscription side, FCA chose Avis Budget Group as a partner. This scheme will let Jeep owners swap out their cars for other vehicles, like a Ram 1500 or Dodge Challenger. According to Bloomberg’s report, Avis will be responsible for managing the subscription program’s supply.
Read the full article on CNet.com
Condé Nast Will Put Every Single Publication Behind a Paywall By Year’s End
Excerpts from an article by Laura Stampler in Fortune
Readers used to freely consuming online articles on Condé Nast publications—from Glamour to GQ, Bon Appétit to Architectural Digest—will have to start paying up by the end of 2019.
The magazine publisher announced Wednesday that it will put all of its U.S. titles behind digital paywalls.
Pamela Drucker Mann, Condé Nast’s chief revenue and marketing officer, told The Wall Street Journal, that she advocated for the move towards metered paywalls, and that she doesn’t expect any impacted titles to lose its digital audience. “When you put a price tag on something, that must mean you have confidence in the product,” said Drucker Mann to the Journal, which was the first to report the move.
Condé Nast already has titles including The New Yorker, Wired, and Vanity Fair behind their own metered paywalls that don’t allow readers to access more than four articles a month unless they subscribe to the publication.
Read the full article in Fortune
Brandless launches subscription option
Excerpts from an article by Corinne Ruff in Retail Dive
Brandless, a direct-to-consumer home essentials business, on Thursday launched a subscription option, CEO Tina Sharkey told Retail Dive in an interview. The startup, which launched mid-2017, ended 2018 with over 400 products in its assortment, and it plans to double its offering this year, Sharkey said.
The new service allows shoppers to receive certain products on a regular timeline of their choosing — weekly, monthly, twice a year or anything in between, Sharkey said. Each subscription box comes with a surprise gift.
Rolling out a subscription model is a convenience play for consumers who don’t want to think about reordering basics like paper towels, and it’s a savvy business move. It’s similar to Amazon’s popular Prime Pantry program, which has helped it outpace rivals in the household and personal care product spaces.
Read the full article in Retail Dive
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