Five on Friday: Pirated Subscriptions, Streaming Wars and Subscription Exploration

Featuring Cadillac, The New York Times, Wirecutter and Twitter

Is it just us or does it feel like the Wild West these days with crazy news, weather and predictions coming from virtually everyone with a keyboard, microphone or camera? We will leave the opinions to the pundits, and bring you the latest subscription news in our Five on Friday feature. This week, we heard that pirate subscription services in the U.S. have become a billion-dollar industry, we share how the streaming services and streaming wars are faring amid the pandemic, and Motor Trend talks about Cadillac’s decision to require a subscription to its SuperCruise feature after a free three-year trial. Also, Axios reports that The New York Times is exploring a subscription option for its Wirecutter consumer guide, and we’ll update you on the latest Twitter news.

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Pirate IPTV Subscription Services are a Billion-Dollar Industry in U.S.

According to a new report published by Digital Citizens Alliance and NAGRA, the pirate subscription IPTV business in the U.S. is now a billion-dollar industry. The 31-page Money for Nothing report explains that tech savvy entrepreneurs steal streaming content and distribute it online to customers who subscribe to their service. Here are highlights from the report’s executive summary:

Pirate subscription IPTV services are a billion-dollar industry in the U.S.
Pirate subscription IPTV services are a billion-dollar industry in the U.S.
  • In the U.S. alone, pirate subscription IPTV services generate at least $1 billion annually, not including the purchase of pirate streaming devices needed to access the content.
  • Service providers don’t pay for the content they steal, they operate at profit margins ranging from 56% to 85%.
  • About 9 million fixed broadband subscribers in the U.S. use a pirate subscription IPTV service.
  • These services are available through at least 3,500 websites, social media pages and online marketplaces.

Some pirate IPTV services earn revenue beyond subscription fees. They also generate advertising revenue, by selling devices preloaded with apps that contain stolen content, and by partnering with hackers who install malware within the free apps for nefarious purposes. For more details on how pirating works, how they make their money, and who some of the major players are, view the complete report at DigitalCitizensAlliance.org.

Streaming Wars Amid the Pandemic – How are Streaming Services Faring

As the pandemic continues on, streaming services like Netflix, Hulu, Disney Plus and now Peacock are benefiting, attracting new subscribers who are looking for something to do and something new to watch. Here’s how the services are stacking up for the streaming wars right now:

  • Disney Plus, which launched last fall, hit 60.5 million subscribers. This was due, in part, to the popularity of ‘Hamilton’ which debuted in July, reports CNET. Including Hulu and ESPN Plus, Disney streaming services have over 100 million subscribers total.
  • Netflix reported 192.95 million total members worldwide at the end of the second quarter, an increase of 27.3% compared to Q2 2019. In the first half of 2020, the company added 26 million paid members, compared to 28 million for all of 2019.
  • NBCUniversal’s Peacock reported 10 million signups in the first three months of the service. This includes those who accessed the service via Comcast in the service’s soft launch, as well as those who signed up when the service officially launched in mid-July. Peacock has not reported how many of these signups are paid subscribers. Peacock uses an ad-supported freemium model with three tiers, and only two of those tiers require a subscription.
  • While Amazon is pretty quiet on membership numbers, in February, The Verge reported that Amazon Prime had 150 million members, each who have access to Prime as part of their membership. Viewers can, however, subscribe to Prime Video without a Prime membership, so it is unclear how many subscribers Prime Video really has.
  • Last week, ViacomCBS reported that CBS All Access and Showtime OTT, the network’s two paid streaming services, have a total of 16.2 million subscribers, a 74% increase year-over-year. These numbers come as the company is working on a rebrand and new content in its library.

This is just a sampling of some of the major paid streaming services, each vying for market share and audience. This doesn’t even touch on the ad-supported services like Tubi and Pluto TV. The big keys to the success of all these services is exclusive content, customer experience and retention. The pandemic has brought a lot of new business to these services, but the SVOD services have to keep those customers happy.

OTT growth in April 2020 due to pandemic
SVOD services have heated up the streaming wars during the pandemic, but can they keep their subscribers after COVID-19? Image: Bigstock Photo

Cadillac’s Hands-Free ‘Super Cruise’ Features are Free for 3 Years Before Subscriptions Kick In

Cadillac is installing a hands-free Super Cruise feature in some of its newer models which take much of the hard work out of driving. The hands-free feature includes high definition maps which integrate with cruise control and lane-centering self-steering on 200,000 miles of compatible highways. It also ensures that drivers maintain a sufficient gap between their vehicle and vehicles in front of them. Cadillac explains the technology:

“Super Cruise functions with services like OnStar®, precision LiDAR mapping, in-vehicle cameras, radar sensors, and GPS to help detect every curve, helping to make long drives and commutes comfortable and more convenient. The Super Cruise package on 2018 (produced on September 6th, 2017, and later), 2019*, and 2020 models includes 3 years of OnStar to support functionality, after which an OnStar plan must be purchased,” says Cadillac.

Cadillac mentions the need for a subscription after the third year in multiple places on its website, but it does not indicate pricing. According to Motor Trend, Cadillac has extended a complimentary fourth year of Super Cruise to 2018 CT6 models equipped with the feature. For drivers who choose not to subscribe to the hands-free features, they will lose the ability to use those features.

Cadillac offers additional services and features via subscription. For example, connected access, including vehicle diagnostics, dealer maintenance notification and in-vehicle app access are available for no additional fee. Enhanced vehicle management which includes Alexa skills, vehicle locate features and a remote key fob is available for $14.99 a month or $149.90 a year. Additional features including connected navigation, unlimited 4G LTE data and turn-by-turn navigation can be purchased for $39.99 a month. Additional OnStar services are also available for a separate fee. See all of Cadillac’s subscription options at Cadillac.com.

Cadillac’s Super Cruise feature allows for hands-free driving. The service is free for the first three years of vehicle ownership before subscription fees are required. Image courtesy of Cadillac.

Axios Report: The New York Times May Be Considering a Subscription for Wirecutter

In an exclusive, Axios reported The New York Times is considering a possible subscription product for Wirecutter, a digital consumer guide The Times acquired in October 2016 for $30 million. While The Times and Wirecutter remain editorially independent, The New York Times Company does receive affiliate revenue from products that it reviews that are then purchased by consumers as a result of the independent reviews. This revenue stream is recorded under “other revenue” in the company’s financial reports.

Much like the Twitter subscription discovery and reveal by The Verge last month, the subscription possibility was discovered through a job posting on LinkedIn. In this case, The New York Times is seeking a Director of Marketing for Wirecutter who is “an all-around marketing leader to drive the strategy and go-to-market executive of its future consumer subscription product.” This position would oversee the consumer guide’s efforts to expand reach and build a consumer business. The posting went live two weeks ago and already has more than 200 applicants.

The New York Times is seeking a marketing leader to help Wirecutter explore a subscription option.
Excerpt from LinkedIn job posting for Wirecutter who is exploring a subscription option for the digital consumer guide.

Axios confirmed the strategy with David Perpech, head of standalone products, at The Times, who explained they are looking for multiple revenue streams for Wirecutter. The company is still exploring options.

As we noted last week, The New York Times revenue for the second quarter was $403.8 million, a 7.5% decrease compared to the second quarter of 2019. This was largely due to a reduction in print and digital advertising related to the COVID-19 pandemic. Subscription revenue grew 8.4%, while advertising revenue decreased 43.9%. Other revenue, which includes affiliate revenue from Wirecutter, decreased 5%. This decline was attributed to multiple factors including the conclusion of the first season of The Times’ TV series “The Weekly,” lower revenues from events and commercial printing.

The growth in subscription revenue was primarily due to growth in the company’s growth in digital-only subscriptions with include The Times’s news product, Cooking, Crossword and audio products. If Wirecutter were to add another revenue stream, this would increase The New York Times Company’s digital revenue. This could be a very interesting – and profitable – experiment. We’ll keep you posted as we learn more.

Twitter Updates: Possible Subscription Features and Reply Limitations

Speaking of Twitter, the social media platform has been making headlines of its own. First, an update on Twitter’s exploration of a subscription product. Twitter CEO Jack Dorsey has confirmed that the company is looking at subscription options, and it has been reported that the social media platform is surveying users on what features might entice them to subscribe.

Here are several options that have been presented, according to Search Engine Journal:

  • Undo send: a 30 second window for a user to recall or withdraw a tweet before anyone sees it
  • Custom colors: the ability to change fonts and theme colors in the app on desktops and smartphones. Users could choose colors for their backgrounds, links, mentions, hashtags and icons.
  • Video publishing: the ability to publish videos five times longer than currently allowed and at a higher resolution (8192 x 8192)
  • Recruiting: the ability to connect, post open positions and recruit for jobs on Twitter
  • User roles: the ability to assign different roles to different users in an organization without sharing users and passwords (Editor’s note: While Twitter does not currently allow this, but social media management tools like HootSuite do, typically with a subscription.)
  • Social listening: the ability for users to see conversations about their Twitter accounts, including total volume, what people are saying, and who is talking about the count (Editor’s note: This is also something social media management tools like Sprout Social offer, typically available with a subscription.)
  • Badges: get a badge on your profile linking users to businesses they work for or own
  • Auto responses: the ability to set up an auto response
  • Brand surveys: brands would have the opportunity to survey people about ads to learn more about their reaction to the ads.

Twitter users can now limit who can respond to their tweets, says Recode. The social media platform has been testing the idea since May. The ultimate goal is to reduce harassment. According to Recode’s report, people who submit abuse reports for harassment on Twitter and three times more likely to use these settings. The company’s Suzanne Xie, director of product management, noted in a blog post that they are already seeing positive results; users feel more protected from spam and abuse and are more comfortable sharing their tweets.

“Since we started testing this in May, people have used it to host interviews and panels, share what’s on their mind, and make announcements. We’ve learned a lot from usage, feedback interviews, and surveys. These settings help some people feel safer and could lead to more meaningful conversations, while still allowing people to see different points of view,” said Xie.

Xie also said that people are using these settings to have more sensitive conversations, particularly those around political points of view and social issues.

In our test, we typed out the text, added a few hashtags and clicked on “Everyone can reply.” A dropdown box appeared with other options.

Twitter has added reply features to allow users to limit who can reply to their tweets.

This is an interesting experiment for the social media platform to try, particularly in a time where the country is so divided and the presidential campaigns are heating up. We hope these small but significant changes help encourage more civil discourse and less hatred and vitriol.