Five on Friday: Incentives, Advertising and Adding Subscription Tiers

Featuring Disney+, UnitedHealthcare, Good Rx, Claire’s and Nintendo

We’re kicking off October with features about incentives, ad-supported models and adding subscription tiers. At a Goldman Sachs conference, Disney CEO Bob Chapek hints that the company is opening to advertising opportunities for Disney’s streaming services, and Apple and UnitedHealthcare partner to offer free subscriptions to Apple Fitness+. Also, Good Rx hits the 1 million subscriber milestone, Claire’s gets in on the subscription economy, and Nintendo Switch adds a new subscription tier to Nintendo Switch Online.

Disney+ May Consider Advertising in the Future

Since the launch of Disney+ two years ago, the platform has taken pride in keeping their service ad-free. With their lower price point, it’s been more easily accessible to families and Disney lovers alike. The price point, at $8 a month, remains one of the lower-cost streaming services. When the price was raised by $1 a month in March of this year, it did little to affect subscriber count.

However, with the pandemic and subscription fatigue at an all time high, subscriber growth has slowed. After two years Disney+ has 116 million subscribers worldwide, but CEO Bob Chapek said during a Q&A session at the Goldman Sachs 30th Annual Communacopia Conference business isn’t always linear, reports Cord Cutters News. When he looked at projections from others, people predicted their growth would be a straight line, but instead it has been a tad shakier. Chapek said he expects Disney’s global paid subscriber count will increase by low single-digit millions both domestically and internationally in the fourth quarter, but they have hit some headwinds.

In a surprise move, Chapek said Disney is toying with the idea of adding advertising to their streaming service. However, because the audience is made up of more kids than adults, the approach would need to be different than a service like Hulu uses. Plus, Chapek understands that a one-size-fits-all approach to advertising will not be successful.

Chapek did say he appreciates the bundling approach Disney has taken with ESPN+ and Hulu, but viewers can also purchase those services a la carte if they so desired, which he sees as a big plus. This is a stark contrast from Disney’s take in June of this year, where The Verge reported that Disney has no plans for a lower-cost, ad-supported tier. For now, Disney is just thinking about adding advertising, but they may consider other opportunities for advertising on their platforms.

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3 Million Members of UnitedHealthcare to Get Free Subscription to Apple Fitness+

UnitedHealthcare and Apple are expanding their partnership. The insurance company announced that members who own an Apple watch can sign up to receive a 12-month subscription to Apple Fitness+ at no additional cost, starting November 1. At launch, the program will be available to approximately 3 million fully-insured UnitedHealthcare members. Employers who have self-funded plans can purchase a similar offering new year; the offering will include a 12-month subscription to Apple Fitness+ and a $25 Apple digital gift card.

Once they sign up, Apple Fitness+ subscribers will get access to more than 1,200 workouts including high-intensity interval training, strength, yoga, dance, core, cycling, treadmill and rowing, plus Pilates and guided meditation. Another feature available to Apple Fitness+ subscribers is their Time to Walk series, where guests share stories, photos and songs to inspire people as they walk.  

“Making Apple Fitness+ available to millions of UnitedHealthcare members is part of our broader effort to help people engage in their well-being and get and stay healthier,” said Rebecca Madsen, chief consumer officer, UnitedHealthcare, in a September 23, 2021 news release.

“One way to achieve these goals is to help people enhance their fitness, with many individuals turning to on-demand and digital resources to help get or stay motivated. We are pleased to be the first health insurance plan to provide this type of access to Apple Fitness+,” Madsen added.

Jay Blahnik, senior director of Fitness Technologies at Apple, also commented on the partnership.

“We are very excited to work with UnitedHealthcare to bring this offer for Apple Fitness+ to millions of people who are looking to get and stay motivated to live a healthier lifestyle,” said Blahnik. “With our welcoming trainer team that lead a variety of workouts fueled by music that will keep you going from start to finish, the new guided Meditations coming next week, and the metrics from your Apple Watch right on the screen, Fitness+ has many ways to keep you active no matter where you are on your fitness journey.”

Starting November 1, approximately 3 million UnitedHealthcare members will get a free 12-month subscription to Apple Fitness+. Image courtesy of Apple.

GoodRx Hits 1 Million Subscribers

GoodRx, well known for offering prescription drug coupons for customers, has hit 1 million subscribers, reports CNBC. The company currently offer two subscription programs: GoodRx Gold and the Kroger Rx Savings Club.

As the company grows, they continue to add benefits to the program to make prescription drugs more accessible to customers that can’t afford the full premium of a medicine. The Gold program has expanded to include discounted telehealth services as well as a mail-order pharmacy. Gold currently costs $5.99 a month for one person, or $9.99 a month for a family. The program promises to offer up to 90% discounts on prescriptions. Currently, those on the GoodRx Gold program can receive free delivery on over 950 prescriptions. For telehealth visits, members will be able to access a doctor for $19, where a non-member would pay $49.

For the Kroger Savings Club, members are able to access over 100 medications for free, $3 or $6. They will also be able to save on 1,000 generic prescriptions. Individual plans are $36 per year, and family memberships are $72 per year, and can include pet prescriptions. For an individual plan, the average annual savings are $461 per year, and a family’s average savings is $1,064 per year.

In the company’s second quarter of 2021, the company reported total prescription revenue of $144.9 million, representing 32% growth year-over-year. Subscription revenue was $14.3 million, representing growth of 125% year-over-year. This was driven by an 86% increase in the number of total subscription plans. Other revenue was $17.4 million, a 136% increase year-over-year with an increase in telehealth visits and revenue from pharma manufacturers.

“GoodRx is giving patients access to medicines that they wouldn’t otherwise be able to afford,” said Joe Flores, MD, a primary care physician in GoodRx Holdings, Inc.’s second quarter 2021 shareholder letter.

Image courtesy of GoodRx

Claire’s Looking to Cash in on Subscription Trends

You may have been to a Claire’s store at one point or another in your life. You may have taken a child there to get their ears pierced or gotten them the latest accessories to help them stand out at school. The popular accessories store has recently seen a resurgence in popularity and is looking to cash in on the subscription trend across all ages. As the company prepares to launch their own subscription service, CMO Beth Moeri is excited to debut the company’s new subscription boxes, saying that they will provide the latest trends to empower today’s customers to be their truest selves.

“For more than 50 years, Claire’s has been synonymous with fun, innovation and discovery through our ability to surprise and delight our customers with our trendsetting assortment as well as the memorable experiences created through our piercing expertise and services. As we continue to inspire customers and meet them where they live and shop, Cdrop provides the latest trends to empower today’s customers to be their truest selves,” said Moeri in a September 22, 2021 news release.

The subscription service will be called Cdrop, and its focus is Gen Z and millennial consumers. There will be three themes – GlitzyDrop, VibeyDrop and BitsyDrop. The boxes will contain curated collections of regular Claire’s products, as well as new launches.

GlitzyDrop will contain all things earrings, geared toward building an earring collection ay any age. This box can contain up to 12 sets of earrings. VibeyDrop will be a more seasonal offering, containing rings, earrings and layered necklace multi-packs, targeting older teens and young adults. This box will contain five to seven trendy items. BitsyDrop will contain butterfly clips, scrunchies and fidget toys, geared towards younger consumers, according to PR Newswire. This box promises five to seven “smile makers.”

There will be two ways for a customer to subscribe. There will be quarterly drops, billed quarterly at $30 per box, or they can purchase a one-time box for $32. There will be no ongoing commitment for customers, and each box will be shipped for free. Consumers can switch the box that they want with no hassle, have the ability to skip boxes, and cancel their subscription with no hassle. The service is slated to launch in December.

Global fashion brand Claire’s launches Cdrop subscription service program. Image courtesy of Claire’s.

Nintendo to Add New Subscription Tier to Nintendo Switch Online

Nintendo Switch Online debuted three years ago, and Nintendo is looking to revive their subscription a little bit. Last week, they hosted their Nintendo Direct press conference, where they debuted new games, game updates, and the latest Nintendo news. They even discussed a full-length animated Mario movie.

The online subscription, currently home to 26 million subscribers, is currently competitively priced against other major console retailers. A Family membership will set a household back $34.99 a year, where a Playstation Plus membership for one user will cost $60 a year.

Perks of Nintendo Switch online include a mobile app that allows you to voice chat with users and offers compatibility with certain games, access to play games online with other players, as well as access to over 100 of Nintendo’s classic NES and Super NES games. They have updated these games slightly to offer online functionality to create competition and cooperation between your friends. Members for Nintendo Switch Online can also redeem in-game items that they wouldn’t be able to access otherwise.

However, in Nintendo Direct, the company dropped a whammy to unsuspecting users. In addition to be able to stream NES and SNES games, users will be able to stream Nintendo 64 and Sega Genesis games on their Nintendo Switches. The downside? This will be a different tier to the Switch online subscription, and pricing has yet to be announced.

The only details that are confirmed for the service are a select amount of games (with more promised), will be higher in price than in the existing tier, and that it will debut in late October. Alongside the new launch, in Nintendo fashion, they have remastered the Nintendo 64 and Sega Genesis controllers as a wireless, Nintendo Switch version, which will be available for $49.99 upon launch. They previously did this for Nintendo and Super Nintendo controllers. Stay tuned for more details!

Image courtesy of Nintendo