Five on Friday: Pittsburgh, Peacock and Premium Video

Featuring Apple, DK Pittsburgh Sports and The Office

We are just a week away from Christmas, and we are hard at work in our remote offices bringing you the latest subscription news. In this week’s Five on Friday, Omdia shares the latest data on 2020 global box office sales, and revenue for premium video and subscription video on demand services, DK Pittsburgh Sports covers subscription costs for readers who can’t afford to renew, and Apple Services revenue could outpace iPhone sales by 2024. Also, starting in January, Peacock will be the exclusive home to The Office, with the first two seasons available for free, and PYMNTS.com shares three digital habits that are likely to continue after the COVID pandemic is long gone.

We are taking the next few Fridays off to enjoy a little break with our families. The next edition of Five on Friday will publish on January 8, 2021. Until then, we wish you Happy Hanukkah, Merry Christmas, and a very Happy New Year!

Global Cinema to Lose $32 Billion in 2020 Due to Pandemic

As a result of the COVID-19 pandemic, the global cinema industry is expected to lose an estimated $32 billion this year. That’s a decrease in box office sales of 71.5%, according to global tech research firm Omdia. That’s such a significant decline that box office revenue will drop below $13 billion for the first time in more than 20 years.

In addition, Omdia estimates that online transactional and subscription video revenue will grow from $26 billion last year to $34 billion this year, representing a 30% increase. Premium video on demand is responsible for approximately $630 million of studio revenue this year.

What’s in store for 2021? HBO Max and Disney have already announced that they will release blockbuster films in 2021 on their streaming services on the same day they are released in theaters. HBO Max will not charge an additional fee to watch new releases on the streaming service, whereas Disney has announced it will charge $29.99 to watch Walt Disney Animation Studios’ Raya and the Last Dragon on March 5, the same day it debuts in theaters.

This may be the trend for 2021, but it is difficult to predict what movie studios’ long-term plans for premium video and blockbuster releases will be beyond 2021. Here’s what Omdia has to say about the state of global cinema and premium video.

“COVID-19 also created a bottleneck of new releases which puts into question the traditional windowing model as downstream revenue sources suffer from the lack of new releases onto other platforms in 2020 and 2021,” said Maria Rua Aguete, senior director for media and entertainment at Omdia, in the company’s Movie Windows: Adapting for the Future. “It has also created a unique opportunity for studios to experiment with other distribution models such as PVOD and, to a lesser degree, straight-to-streaming without equivalent relationship damages as before.”

“Most 2020 experimentation has not been about moving new release movies to latter windows (namely, online subscription video) sooner, but rather about creating new and temporary revenue streams to capitalize on produced content via PVOD or otherwise,” Rua Aguete added.

Image courtesy of Pixabay

Independent Pittsburgh Sports Site Covers Subscription Fees for Readers Who Can’t Afford to Renew

“We want you to stay with us. We’re not taking no for an answer,” writes Dejan Kovacevic, owner of DK Pittsburgh Sports Online.

That’s the sports site’s offer to pay to retain its subscribers, many of whom can’t afford to renew their subscriptions because they lost jobs, pay or hours due to the pandemic. Kovacevic is honest and direct with readers, explaining that the independent site dedicated to Pittsburgh sports, doesn’t want to lose subscribers, because once they are gone, they may never come back, no matter how good the content.

The purpose of Kovacevic’s heartfelt December 11 column was to let readers know it is okay to ask for help. The site is open to extending subscriptions for those undergoing financial hardships right now. In fact, this isn’t new for the six-year-old site.

“…we’ve been quietly doing this for years and (that) so many of those recipients, once they’re in a better position in life, eventually come back and pay for others’ subscriptions,” Kovacevic writes.

We find this direct yet sensitive approach compelling. Kovacevic is dedicated to his work and to sharing it with readers, and he’s willing to go the extra mile to make sure they can access it even if they can’t afford it right now. This helps build goodwill, foster a direct relationship with subscribers and readers, and it will help retain customers long-term. This is a smart subscription strategy, but it is also a wonderful gift in a year where everything else has gone wrong.

Dejan Kovacevic, founder of DK Pittsburgh Sports Online, generously covers the subscription fees for readers who can’t afford to renew right now. Photo reprinted with permission.

Apple Services Revenue to Outpace iPhone Sales by 2024

Apple Services revenue, including subscriptions like Apple Music, Apple News+, Apple TV+, Apple Fitness+ and Apple Arcade, will outpace the sale iPhones by 2024, says Retail News Asia. After seeking iPhone sales peak in early 2017, the company focused more on offering services to customers. This helped shift the company’s reliance on one-time income and device revenue toward more predictable recurring revenue. If the new Apple One bundles grow in popularity, the company may find that its average revenue per user may drop, but it may attract more subscribers.

Over the last four years, Services revenue has grown at a rate of 22%. While this will level off and drop to 11%, Forbes predicts that service revenue will be approximately $81.5 billion. At the same time, iPhone sales will grow at a rate of about 5% to about $167 billion per year. Here is how Apple fared in  fiscal years 2019 and 2020, which ended on September 28 and September 26, respectively.

 Fiscal Year 2020Percent of TotalFiscal Year 2019Percent of Total
Net sales:    
   Products$220,74780.4%$213,88382.2%
   Services$53,76819.6%$46,29117.8%
Total net sales$274,515$260,174 
Net sales by category:    
   iPhone$137,78150.2%$142,38154.7%
   Mac$28,62210.4%$25,7409.9%
   iPad$23,7248.7%$21,2808.2%
   Wearables/Home/Accessories$30,62011.1%$24,4829.4%
   Services$53,76819.6%$46,29117.8%
Total net sales$274,515$260,174 

*Numbers show in millions, per Apple’s fiscal year 2020 consolidated financial statement

Image courtesy of Pixabay

Fans of The Office Will Flock to Peacock, the Series’ New Home, Starting in January

Diehard fans of The Office will be excited to learn that the American version of the series has a new home, following its departure from Netflix at the end of the year. Based on the British version of The Office which was created by Ricky Gervais and Stephen Merchant, the award-winning mockumentary/sitcom set at the fictional Dunder Mifflin Paper Company is moving to NBC Universal’s streaming service Peacock starting January 1. Variety reports that The Office will feature superfan episodes that include footage not previously aired, including deleted scenes from the original series, starting with season 3.

The first two seasons of The Office starring Steve Carell will be available for free on the ad-supported tier of Peacock. Seasons 3 through 9, including the superfan episodes, will only be available on Peacock Premium which costs $4.99 per month with limited ads and the ad-free Peacock Premium Plus which is $9.99 per month. Peacock will feature all 201 episodes of The Office, which aired from 2005 to 2013 plus bonus content, including bloopers, interviews and playlists.

Greg Daniels, who created the American version of The Office, commented on the program’s new home.

“Having The Office back in the NBC family opens up access to a lot of extra content that we originally shot,” Daniels said. “The experience on Peacock should feel like a celebration of The Office for fans.”

In 2018, The Office was the top-watched TV show on Netflix with 52 billion viewing minutes during the year, according to Media Post. Fans of the series are likely to flock to Peacock to see their favorite characters include Michael Scott (Steve Carell), Dwight Schrute (Rainn Wilson), Jim Halpert (John Krasinski), Pam Beesly (Jenna Fischer), and others. This could help Peacock grow its base of viewers and paid subscribers.

Image courtesy of Peacock

Three Digital Habits That COVID May Have Changed Forever

On the eve of the distribution of the COVID vaccine, we are a long way from our lives returning to “normal.” In fact, some aspects of our post-pandemic lives may never be the same. In a recent article, PYMNTS.com shared three digital habits they think could become permanent ones.

  1. When we shop: Shopping will no longer be planned around a traditional 9 to 5 work schedule, according to a PYMNTS/Visa 2020 How We Will Pay research report. Last year, nearly three-fourths of U.S. shoppers bought groceries during the weekend. This year, only 53% do. Why? Flexible, work-from-home schedules allow us to shop when we need to. In terms of retail shopping, 46% of American consumers shop on the weekends, compared to 65% in 2019.
  2. Where we shop: Digital grocery shopping will become the new normal. During the pandemic, many states imposed lockdowns, only encouraging essential visits, including trips to the pharmacy and grocery store. However, many people still aren’t comfortable in a store. Instead they are getting their groceries online. According to PYMNTS’ Omnichannel Grocery research, 42.2% of consumers said they have used at-home grocery delivery services, compared to 39.7% who have tried curbside pickup, and 35.2% who pick up their online orders in the store. The majority of consumers still prefer to buy produce, meat and dairy in store. [I use Amazon Fresh for grocery shopping, but I buy my fruits and vegetables at a nearby grocery store.]
  3. How we shop: This year, 8 million consumers used voice assistants like Alexa and Google Home to shop and help with other items at home. This is a 45% increase since 2018 and an 8% increase since last year. Voice devices are up 5% this year as well.

Read the original article, Three Digital Shifts on Their Way to Becoming Permanent Changes, on PYMNTS.com.

Image courtesy of Pixabay