Subscription Economy News - Week of 7/1/2019

Subscription Economy News - Week of 7/1/2019

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

Apple Music tops 60 million subscribers, but can it catch Spotify?  
Excerpts from an article by Adam Levy in USA Today

Apple services exec Eddie Cue says the iPhone-maker’s streaming music service now has more than 60 million subscribers. Cue told French publication Numerama about the milestone during an interview at the Apple Store on the Champs-Élysées in Paris. That number has since been confirmed by several news outlets.

As impressive an accomplishment as that is, though, Apple still trails its biggest rival, Spotify, which counts 100 million premium subscribers around the world. Importantly, it took more than a year for Apple to go from 50 million subscribers to 60 million, while Spotify increased its premium subscriber count by 25 million over the four-quarter period that ended in March.

Apple is increasing its focus on subscription services this year. But the growth rate for Apple Music is slowing, while Spotify still has a massive pipeline of free users it could convert into paying customers. Can Apple catch up?

Read the full article in USA Today

Louisiana’s Novel ‘Subscription’ Model For Pricey Hepatitis C Drugs Gains Approval
Excerpts from an article by Selena Simmons-Duffin and Alison Kodjak on NPR
Louisiana officials announced a deal Wednesday with Asegua Therapeutics, a subsidiary of Gilead Sciences, that would allow the state to provide hepatitis C treatment to its Medicaid and prison populations. They also secured the necessary clearance from the federal government Wednesday for a novel approach to paying for the drugs and expect the program to start July 15.

In Louisiana, at least 39,000 people either on Medicaid or in the prison system have hepatitis C, a viral infection that attacks the liver. It’s a curable condition, but that cure is expensive — generics cost as much as $30,000 per course of treatment — and some states have been in the position of rationing care to limit the strain on their budgets.

Louisiana Gov. John Bel Edwards explained how the new deal will provide an authorized generic version of its drug Epclusa. “The state will receive an unrestricted supply of this lifesaving medication while capping our expenditures at the same time,” he said.

And he explained what’s in it for the drugmaker: “This model gives the company exclusive access in the Medicaid and corrections markets in this state.”

Read the full article on NPR

Twitch Introduces Subscriber-Only Streams
Excerpts from an article by Matthew Humphries in PC

In a bid to offer streamers more ways to boost their subscriber numbers while at the same time supporting superfans, Twitch is introducing streams that only subscribers can watch.

They are called Subscriber Streams and will only be viewable by subscribers, VIPs, and Mods. Everyone else will instead be presented with a live preview of what the Subscriber Stream contains and then encouraged to subscribe to continue watching. Depending on the streamer and the content, this could lead to a big boost in new subscriptions. That’s the theory, anyway.

For now Subscriber Streams is launching in beta, so expect to see it roll out slowly to Affiliate and Partner channels.

Read the full article in PC.  

The war for streaming video has officially begun  
Excerpts from an article by Tim Peterson in Digiday

The subscription video market is quickly becoming oversaturated. In addition to subscription stalwarts like Netflix, Hulu and Amazon Prime Video, there are the aforementioned subscription-based streaming services coming from Apple, Disney, NBCUniversal and WarnerMedia. And then there are the subscription resellers. In light of the success that Amazon has experienced with Amazon Prime Video Channels, Apple, Roku and Facebook have rolled out or are developing their own programs to sell subscriptions to other companies’ subscription video services, seemingly lowering the barrier for more subscription services to hit the market.

The surfeit of subscription services demands the question: How many services are people willing to pay for? The answer to that question is clouded by the fact that the prices of some subscription services, especially streaming TV services, continue to balloon. This year Hulu, YouTube TV and DirecTV Now have each raised the prices of their respective streaming TV services to cover carriage fees and compensate for subscriber churn. Meanwhile, Netflix has continued to increase its prices to account for the amount of money it must spend on content to keep people entertained and, therefore, subscribed.

This surge in competition for viewers’ — and advertisers’ — attention and wallets that we’ve seen in the first half of the year will inevitably continue, if not accelerate, in the second half of 2019. The launches of Disney+ and Apple TV+ will give us a better idea of the level of competition facing Netflix, and the wrap-up of this year’s upfront cycle will show how narrow (or not) the divide between traditional TV and digital video ad sellers really is. The streaming video war is unlikely to be won or lost anytime soon, but before the year is over, we may see the first victories and casualties.

Read the full article in Digiday

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