Subscription Economy News - Week of 7/29/2019

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

The Subscription Economy: A New Approach To Ownership
Excerpts from an article by Karl Gilbert in MinuteHack. 

From streaming platforms such as Netflix to grooming services such as Harry’s Razors, whole business models and markets have been upended in response to evolving consumer habits and preferences.The subscription economy is in rude health and a new approach to ownership is beginning to take root deep in contemporary consumers’ consciousness. This is being led by a smarter, more informed consumer looking for better and simpler ways to access services.

In fact, the UK’s appetite for subscription services is seemingly insatiable. Today, nine in ten people in the UK have taken on at least one subscription service, circa 58 million at recent count (Zuora and YouGov). Meanwhile, European consumers are now spending roughly €350 billion per year on subscriptions.

The experience and subscription economies have rendered product ownership – in its traditional sense – obsolete for many people.Take clothing rental for example, a practice traditionally limited to loaning tuxedos and suits for events such as a graduate ball or a christening.Today, companies such as Front Row have ditched this myopic focus in favour of an extensive catalogue of designer items. For many, it doesn’t make sense to pay £500 to buy a dress for a wedding, but they can justify renting it for £100.

Read the full article in MinuteHack. 

United offers free or discounted CLEAR fast-lane memberships
Excerpts from an article by Chris McGinnis in SFGATE. 

United has become the second major airline – along with Delta — to invest in CLEAR, creating a partnership that will provide free or discounted enrollment in the biometric identity program for MileagePlus members.

CLEAR, which escorts its members to the front of the security line directly to TSA screening, already operates its biometric checkpoints at several United hubs, including San Francisco, Los Angeles, Denver and Washington Dulles. United said CLEAR should be available starting later this summer at its Newark and Houston Bush Intercontinental hubs, and the airline is supporting CLEAR’s efforts to add special lanes at Chicago O’Hare in the months ahead.

United said that effective immediately, MileagePlus members can enroll in CLEAR at reduced rates – or none at all. Free participation is offered to Premier 1K and Global Services members. The annual rate is $109 for MileagePlus Premier Platinum, Gold and Silver members as well as most United credit cardholders. Other MileagePlus members can join for $119 a year. The standard membership rate for CLEAR is $179 a year.

Those discounts match the ones offered to Delta SkyMiles members who sign up for CLEAR after the SkyMiles rates were adjusted earlier this year.

Read the full article in SFGATE.

Denver’s Inspirato Just Launched the ClassPass of Luxury Lodging
Excerpts from an article by Jessica Larusso in 5280

Netflix, ClassPass, FabFitFun—subscription-based offerings have already shaken up numerous industries by giving consumers access to curated groupings of items or experiences they might not be able to afford individually. Now, Brent Handler, the founder and CEO of Denver-based, 8.5-year-old Inspirato, hopes to do the same for luxury lodging with Inspirato Pass. Unlike Inspirato’s traditional memberships, which have lower annual dues but require members to pay additional nightly fees to stay at the company’s portfolio of properties across the globe, Inspirato Pass gives the buyer and their significant other unlimited free nights at more than 60,000 residences and hotels for $2,500 a month.

“I really love the simplicity of no nightly rates,” says Handler, who’s been developing the pass concept for four years. “It’s easier to join, easier to use, and there’s less commitment.” (Inspirato Pass requires buyers to sign on for a minimum of six months.) The secret to being able to offer passholders trips like, say, six nights in a three-bedroom poolside villa with resort access in Maui, Hawaii (estimated value: $14,656), lies in the high-end lodging industry’s reluctance to advertise discounted rates. “All luxury offerings have the same problem,” Handler says. “Part of the time, they get great high rates, but much of the time, they sit empty.” Because Inspirato Pass’ nightly rates are opaque, Handler says, resorts and hotels in particular are more willing to partner with Inspirato, offering them lower rates behind the scenes to fill their otherwise vacant rooms.

If you’re intrigued, you’re certainly not alone: Handler says that on Monday, when the pass officially launched (the company did beta testing in Colorado and the Bay Area), Inspirato received a record-high number of pageviews on its website and 1,600 inquiries.

Read the full article in 5280.

The L.A. Times’ disappointing digital numbers show the game’s not just about drawing in subscribers-it’s about keeping them
Excerpts from an article by Joshua Benton in Nieman Lab. 

There is a business to be had selling digital subscriptions to newspapers. But it’s a business dominated by two papers on the East Coast. Papers that used to have competitive scale in print — where the limitations of physical distribution gave them market power — just aren’t able to play on the same field as the big boys in digital. That’s the barbell shape: a couple heavyweights on one end of the spectrum, a lot of small fry on the other, no one in between.

That’s what makes the L.A. Times such an interesting and important case. It used to literally be in between those two I-95 papers, after all, and with Soon-Shiong’s limitless capital, it could make a vigorous effort to squeeze itself into that other duopoly. If the L.A. Times could do it — with resources, ambition, a ton of smart hires, and its California competition on its heels — maybe it could then inform the strategies of the industry’s next tier down. Will the L.A. Times be the nation’s biggest metro paper or its smallest, scrappiest national one?

Read the full article in Nieman Lab. 

Apple is not the iPhone company anymore
Excerpts from an article by Shona Ghosh in Business Insider. 

Apple has undergone a major shift. For the first time since 2012, the iPhone accounts for less than half the firm’s overall revenue. It’s not far off, at 48% for its fiscal third quarter. But that number is sure to keep falling.

The two key bits of good news for Apple are that both its services and its wearables categories are growing. And they’re now bigger than the Mac and iPad units.

Services revenue includes money coming from software like the App Store, the streaming service Apple Music, the insurance policy Apple Care, Apple Pay, and Apple’s search ad business for the App Store.

Cook said the services business would most likely double to $50 billion next year from where it was in 2016. Apple also boasts 420 million paid subscriptions across its various services, and it is optimistic about hitting half a billion by 2020. Cook teased new services to come and said these would drive new subscribers too.

All in all, these show a company in the full swing of developing an ecosystem that goes beyond the iPhone. The other two trillion-dollar titans of the moment, Microsoft and Amazon, pulled off something similar. Microsoft stopped relying on Windows as its revenue gorilla, making bets on the cloud and opening up its popular Office apps to other platforms (via, it has to be said, some disastrous calls like buying Nokia and launching Windows Phone).

Read the full article in Business Insider. 

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