Subscription companies are starting 2020 strong with acquisitions, ad sales and inquiries into ad blocking companies. We’ll explore those topics in this week’s edition of Five on Friday: CBS All Access continues to do well with low subscription churn and higher ad sales; travel trends show that subscriptions and memberships are a solid strategy; Meredith will acquire crowdsourced recommendation platform SwearBy; The New York Times reports preliminary results for 2019; and Sen. Ron Wyden wants an investigation into the ad-blocking industry to see if Big Tech is buying them off.

CBS All Access Not Worried About the Competition 

Though the streaming wars are steaming up with new players, CBS All Access is not worried about the competition. Since their earliest days, they had a niche audience with hit shows, an affordable price and, later, exclusive and original content that kept their fans loyal. Marc DeVevoise, chief digital officer of ViacomCBS and CEO-president of CBS Interactive said the streaming wars are a “zero-sum game.” They are not concerned about additional competition.

Why? According to Media Post’s Publishers Daily, the company commissioned a study to research consumer behavior. The study showed that its subscribers spend about $50 a month on other SVOD services and, combined with traditional multichannel services, about $120 a month total. The study also showed that the average user subscribes to about three-and-a-half services, so there is room for CBS All Access and other streaming choices.

Other factors that give CBS All Access confidence include:

• A low churn rate
• Original series including the new “Star Trek: Picard,” “Why Women Kill,” “Stark Trek Discovery,” and “The Good Fight,” a sequel to “The Good Wife”
• Thousands of episodes of programming, live TV and live sports
• A tiered subscription plan with limited commercials or a commercial free plan
• Monthly and annual payment options
• 80% increase in viewership
• 60% growth in subscribers
• Higher ad sales driven by viewership

Combined, CBS All Access and Showtime OTT have approximately 10 million total subscribers. The company hopes to reach 25 million by 2022. That is pretty ambitious, but the company has been successful with its formula so far. There is every reason to believe they’ll reach it.

Skift: Subscriptions and Memberships Are the Next Big Thing for Travel

Though some travel companies – including private airlines – have dabbled in the subscription world, no one has really made a big splash thus far. Skift thinks that is going to change in the coming decade. Today’s consumer cares about price still, but customers want to feel that they matter, they want value, and they want personalized service and rewards. These are the things that will keep customers coming back for more. Subscription and membership programs can help travel companies reach their customers in a whole new way.

“Earning consumer loyalty means more than giving them rewards. Subscriptions and memberships represent a compelling way for travel companies to create lasting relationships with consumers,” writes Andrew Scheivachman for Skift.

Companies like Delta and Surf Air have both tried the subscription model, but in very different ways. Last October, Delta Air Lines launched SkyMiles Select to U.S. customers for $59 a year. In exchange for this subscription fee, travelers receive main cabin 1 boarding (to ensure overhead bin space), eight drink vouchers, and a limited-edition bag tag. Delta values this package at more than $100 a year. We don’t think this was meant to be a true subscription, but perhaps a test to see if customers are willing to pay extra to ensure they can carry on their bags. This subscription is not likely to entice any traveler to travel more than they already do, but it is a building block for other subscriptions or fees.

In 2018, Delta Private Jets launched a Sky Access online membership program to offer unlimited access to empty leg flights and fixed hourly rate private jet travel, ranging in price from $5,995 to $14,400. Surf Air is also experimenting with different membership programs and pricing. Their website shows individual memberships as low as $1,950 per month, ideal for frequent business travelers with big budgets. A January 10 email from Surf Air indicates the company is trying out a new membership for 2020 – $995 all-you-can-fly – but it is only available to the first 50 people to accept the offer.

Last summer, Travel+Leisure wrote about luxury travel company Inspirato’s Pass program. For a flat fee of $2,500 a month, Pass holders get unlimited access to more than 60,000 vacation homes, hotels and resorts around the world. “Look. Book. Stay. Repeat,” says Inspirato on their website.

Travel subscriptions and memberships are not going to be right for everyone, particularly for those who only travel a few times a year, but they have a lot of potential for luxury and business travelers. Read more about this concept in “Travel Megatrends 2020: Subscription Travel is the New Frontier of Loyalty.”

Meredith to Acquire Recommendation Platform SwearBy

Last week, Meredith Corporation announced plans to acquire SwearBy, a digital platform that collects product recommendations from women through crowdsourcing. Founded by Kate Foster Lengyel, SwearBy calls itself a word-of-mouth marketplace for women, a way for women to hear about great products they swear by from other women. Adding this service to its portfolio fits in well with Meredith’s target audience – 100 million American female consumers and close to 90% of U.S. millennial women.

“At Meredith, we have a rich community of our own editors as well as respected influencers who regularly share their favorite products and services. SwearBy immediately provides us a platform to host these recommendations as well as offer consumers the ability to easily store and share their own SwearBys with friends,” said Meredith President and Chief Digital Officer Catherine Levene. “We see enormous potential in promoting this platform across our network of trusted brands and developing SwearBy into the gold standard destination for products and services women actually want when it comes to beauty, style, parenting, lifestyle and entertainment – all searchable and shoppable.”

Levene also said that they plan to expand SwearBy’s features, functionality, product categories and how it is distributed. Lengyel will continue to lead the company as its general manager. She will report to Andy Wilson of Meredith.

“With its trusted content and enormous audiences, Meredith is a wonderful home for SwearBy,” Foster Lengyel said in the January 9 announcement. “Meredith understands that women are the biggest word of mouth agents; they share real and compelling recommendations with their friends and family all the time, influencing shopping habits and moving product. It’s thrilling to know that SwearBy will continue to tap into what consumers think and feel on a much larger scale.”

This is an opportunity for Meredith to serve their target demographic in a new way while also diversifying their revenue.

The New York Times Hit Major Digital Milestones in 2019

Though its year-end financials have not yet been released, The New York Times Company revealed some exciting milestones the media company hit in 2019. Here are highlights shared by Mark Thompson, president and CEO of The New York Times Company:

• The company doubled its annual digital revenue of $400 million in 2015 to $800 million in 2019, ahead of its goal to achieve that figure by the end of 2020.
• The New York Times added more than 1 million net digital subscriptions last year, the highest annual run-rate since the newspaper kicked off its digital model in 2011.
• The company now has more than 5 million total subscribers, an all-time high. This includes 3.4 million news subscribers, more than 300,000 subscribers to NYT Cooking, over 600,000 subscribers to NYT Crossword and 900,000 print subscribers.

The company has previously shared its goal to reach 10 million subscribers by 2025. It is half-way there with five years still to go. The media organization will share complete fourth quarter and full-year 2019 financial results on February 6.

Senator Wyden Urges FTC to Investigate Ad Blockers and Big Tech

Are big tech companies paying off ad blocking companies to get their ads whitelisted? Senator Ron Wyden of Oregon thinks so. On January 14, Sen. Wyden wrote to the Federal Trade Commission, urging them to investigate unfair, deceptive and anti-competitive practices in the ad blocking software industry. According to Sen. Wyden’s letter, hundreds of millions of consumers have downloaded and installed software to block online ads. He alleges that companies including Google, Amazon, Microsoft and Verizon Media have paid millions of dollars to companies like Adblock Plus to continue to track and target “ad-blocking” consumers with ads.

“In 2011, Adblock Plus, one of the most popular free ad blocking tools, stopped blocking all ads by default and instead started to display ads in return for substantial payments from the largest ad companies,” wrote Sen. Wyden.

Eyeo, Adblock Plus’s parent company, started an Acceptable Ads program that whitelists advertisers who agree to comply with certain standards, like agreeing to get rid of pop-up ads and annoying ads. To be whitelisted, Eyeo requires big internet advertising companies to pay 30% of their revenue to be a part of the Acceptable Ads program, alleges Sen. Wyden. Wyden also named AdBlock in his letter. That company was purchased by an anonymous buyer in October 2015 and joined the Acceptable Ads program. By upgrading users of AdBlock, the company essentially made them subject to tracking and targeting without their express consent.

“…I urge the FTC to open an investigation into unfair, deceptive and anti-competitive practices in the ad blocking industry. The FTC should also act to ensure that ad blockers are far more transparent with consumers. Ad blockers that whitelist ads in exchange for payments from ad companies should be required to prominently disclose this to existing users whenever they are shown an ad from a paying advertiser and to new or potential users when they are downloading or installing the ad blocker. This will enable consumers to have the information they need to easily evaluate and compare the effectiveness of ad blockers,” Sen. Wyden said in his letter to the FTC.

Adblock Plus, who is usually vocal when accused or attacked, has not yet weighed in on the issue publicly.