Kirby Grines
- Jun 22, 2020
- 7 min read

Apple's antitrust investigation, Disney's free trial & time is Tik Tok-ing for Quibi

Are free trials on their way out? Are Apple's fees too high? Does Quibi have a chance?

Presented by 43Twenty

More carriage disputes. Similar to what’s going on between AT&T vs. Roku/Amazon, Apple was publicly dragged last week for digging in its heels over its right to take a cut of subscription-based transactions that flow through its App Store. Almost unbelievably, it’s doing so in the middle of antitrust investigations both in the EU and the U.S, in which lawmakers will attempt to determine if Apple abuses its market position and power to disadvantage its competitors. This is a recurring theme that often gets referenced in this newsletter and it came to head last week over Apple’s decision to reject app updates from Basecamp’s newly launched subscription-based email app called “Hey.” Today, Apple currently charges a 30% commission on subscriptions in year one, which drops to 15% in year two. Are those fees too much? It’s worth pointing out Apple announced the App Store ecosystem facilitated half a trillion ($519 billion) in billings and sales globally in 2019. Link

Disney+ does away with its free trial. Disney+ has quietly stopped offering a free seven-day trial to new subscribers, as spotted by French pop culture site Numerama. Without a free trial, anyone who wants to watch Hamilton when it’s out on July 3rd will have to pay for at least one month of Disney+ (which costs $6.99, or $12.99 for the more prominently advertised bundle that also includes Hulu and ESPN+) It’s hard to say what effect the absence of a free trial will have on Disney+ subscriptions. Does the service have enough appeal to make foregoing a free trial worth it? Link

According to Devin Emery, CuriosityStream’s Head of Growth on Twitter, “Free trials for streamers are on their way out. They were a helpful tool to de-risk a purchase decision for a new technology, but generally speaking the tech is no longer novel, the IP is well known, and the pricing isn't risky. I've phased out as standard at CuriosityStream, to positive results.”

ICYMI, we had the pleasure of speaking with Devin a couple of months ago about his company’s acquisition and retention strategy as part of an upcoming video interview series that we’re slowly introducing.

J Katz still has high-hopes that Quibi will take off once quarantines are lifted. Speaking at SeriesFest last week,” he said “I’m still quite optimistic this is gonna work.” And he still asserts that Quibi is not competing for consumers’ time or money against the likes of Netflix, Disney Plus, Hulu, Amazon Prime Video or HBO Max. Those other subscription services “are competing for your time in the living room in watching long-form, episodic, serialized television,” he said. So who does compete with Quibi? Is it Tik Tok? Because Tik Tok’s having an absolute monster year during the same pandemic that Quibi’s attributing to its own shortcomings. For the record, Tik Tok’s amassed 800 million active users, the app’s been downloaded over 2 billion times, and the company’s on track to generate $500 million in the U.S. this year. So is coronavirus just an excuse for Quibi’s poor performance or is there just not a market for premium, short-form video? Link

Quibi considers a pivot to TV. Meanwhile, the company has been in talks with both Roku and Amazon about building native apps for their connected-TV platforms, Variety has learned. In Amazon’s case, that would be its family of Fire TV devices. Link

Pluto TV to reach 30 million monthly active users this year. Since being acquired by ViacomCBS, Pluto TV has been building its channel lineup and growing its user base. In a Q1 earnings call in May, ViacomCBS said Pluto TV had grown to 24 million active users, up 55% year over year. Now, Pluto TV is looking to build on that success and reach its next goal of reaching 30 million subscribers this year. “There’s no doubt in my mind we’ll hit the 30 million number by the end of the year,” Pluto TV CEO Tom Ryan told TheWrap. Link

ViacomCBS to take more control of its streaming destiny. At the Credit Suisse Virtual Communications Conference last week, Bob Bakish said that ViacomCBS will still “selectively” sell its content to third parties, such as its deals with HBO Max for South Park or Peacock for Yellowstone. However, expect those deals to become rarer as the company will prioritize franchise IP to our owned and operated platforms including its ViacomCBS “super service” (aka “House of Brands” or “Pan-ViacomCBS”) that will preview this summer ahead of a full debut in 2021. Link

HBO Max is still on track to reach its subscriber goals and we’ll get our first data next month. Speaking last week at a CSFB Media conference, AT&T CFO John Stephens said the WarnerMedia parent is “optimistic” about HBO Max three weeks after launch and called it “a multi-year process, and so far so good,” promising to provide subscriber data on the next quarterly earnings call in July. Stephens reiterated AT&T’s target of 50 million HBO Max subs over five years. He acknowledged production delays caused by COVID-19 caused some programming disruption but said Warner Bros.’ “100-year-old inventory” with shows from Friends to Big Bang Theory to cartoons provide a well of content to draw on. He noted that streaming service HBO Now saw a 40% jump in engagement in the early days of COVID. “We feel really good about how it’s gone.” Link

fuboTV subscribers are watching 140 hours of content each month. They may come in for the sports and stay for the entertainment, but it’s the latter that’s helped fuboTV retain users amid the absence of most live sports. The average monthly hours watched by subscribers are now up over 140 during the coronavirus pandemic, according to David Gandler. Link

NBCUniversal has less than a month to lock in deals with Roku and Amazon. As AT&T and WarnerMedia are finding out with the constrained launch of HBO Max, it’s never too early to worry about app support on the two most popular device platforms. And Peacock also doesn’t have yet in place a deal with Google for the top mobile platform, Android, as well as connected TV device ecosystems Android TV and Chromecast. Peacock announced a deal last month with Apple for support on iOS mobile devices, as well as Apple TV. It also has a deal locked in with Microsoft for gaming console Xbox One. Peacock is also supported by Comcast’s X1 and Xfinity Flex platforms, on which the service is currently streamable for Comcast video subscribers. Link

Google has quietly rolled out the ability for consumers to purchase an app’s subscription from its Play Store listing page. The company confirmed a select set of developers are testing the new feature. Instead of having to click through in-app pop-ups and read the fine print inside an app, consumers can choose to buy an app’s subscription directly from its Play Store listing page — even if they don’t yet have the app installed. Link

INSIGHTS

Churn and burn: Publishers are prioritizing subscription volume over immediate revenue. Like a lot of media trends spinning out of the pandemic and disconnecting legacy business norms with new in-market realities, there is a widening gap between the volume of publishers’ overall subscription numbers and the revenue that follows. High acquisition costs plus high churn rates lead to low customer lifetime value and low revenue, making a solvent and profitable subscription business tough in the best of times. Link

Combatting customer churn during COVID-19 with data. Data is what keeps you one step ahead; this can be witnessed with the way countries are dealing with the current crises and beyond. Making decisions in unchartered territories – with a data-driven compass – is what will allow one to successfully become a disruptor and a main player in the post-pandemic world. Link

How brands can manage subscription anxiety and prevent customer churn during these difficult times. Prior to the current crisis, on average one out of every four consumers canceled at least one subscription within a six-month period. However, this number of cancellations is predicted to increase as the financial consequences from the pandemic start to filter through. Link

Tips to boost retention if customer churn is getting your business down. In this article from Customer Think, they discuss five best practices that can help you to boost your businesses’ retention rate and thereby increase your brand’s bottom-line.Link

Why streamers have embraced purple, usually a divisive color for brands. Whether it’s the new all-in-one streamer HBO Max, short-form mobile service Quibi, or the streaming platform and device maker Roku, streaming television services are using a deep purple as the dominant color in their logos, apps tiles, and platforms. Link

And shout out to all of the other purple streamers including Hallmark Movies Now, Funimation, Row8, Brown Sugar, PokerGO, and Here TV. And of course, M-GO, who was acquired by Fandango in 2016. Did I miss anybody?