Happy March! It is hard to believe that March is already here. We hope that means spring is just around the corner. While we wait to see if the groundhog was right, Variety explains why they believe subscriptions are the future of gaming, Broadcast Now tells us why Netflix is the SVOD to beat, The Spoon explores the future of third-party food delivery (hint: subscriptions), digital advertising is bigger than TV and print advertising, and Recode breaks down Apple’s rationale in asking news publishers for half their Apple News revenue – it wants to save journalism.

Subscriptions and Access Are the Future for Gaming

Upon a time, the only way to play a video game was to buy it or rent it. If you bought it, you owned it forever and could play it for as long as your game system could read it. If you rented it, your enjoyment latest only as long as the video game rental. Thanks to gaming subscriptions though, gamers have new options. They can still buy a physical copy or download a game from an online store, but instead of laying out $20 to $60 for the latest Nintendo Switch game, they can pay a monthly or yearly fee to get access to a host of games through various gaming subscriptions, including EA & Origin Access, Xbox Game Pass, PlayStation Now and PlayStation Plus, and Xbox Live Gold.

That’s why Michael Futter said the future of gaming is subscription in a February 22 article on Variety.

“The entire value proposition has changed. In a subscription model, consumers don’t often think about what they’ll get out of a single game,” Futter wote. “Instead, they look at all the options available as the driving factor.”

EA senior vice president of player network Michael Blank said that the need to own a game is slowly being replaced with wanting to try different games.

“…we’re seeing this shift in consumption patterns where access is being valued greater than ownership,” Blank said.

Gaming subscriptions go beyond just access to games though. Most of the subscription services also offer perks such as discounts on purchases, early access to games prior to release and joining a digital community of like-minded players. Futter said the gaming is the future for subscriptions, but the market and models are still maturing, so new competitors will likely enter the market while early entrants will fine tune their offerings. Read more on the future of gaming on Variety.

Why Netflix is the Biggest and Possibly the Best SVOD 

When you think of streaming video on demand? What’s the first name you think of – Netflix, Amazon Prime, Hulu? I’d venture a guess that most of us would say Netflix. It has been around the longest, and other subscriptions and memberships are often referred to as the “Netflix of [fill in the blank],” so it is an easy leap to make.

The Broadcast Network says that Netflix is not only the biggest SVOD provider, but it is also the streaming subscription service competitors should strive to beat. Available in 190 countries and with a $15 billion budget, Netflix has massive reach across the globe, and its international membership is growing rapidly. In the fourth quarter of 2018, for example, Netflix added 8.8 million paid members with 1.5 million coming from the U.S. and 7.3 million internationally.

Netflix has some strong competition though with streaming subscription services like Amazon Prime Video, Hulu, CBS All Access and DirecTV NOW, and it is about to get more with the pending launch of Disney+ this fall and streaming services by Apple and AT&T.

One of Netflix’s big advantages, aside from its billion-dollar budget, is the quality of its content. Much of the content is universal, but Netflix has done an excellent job in recent years reaching specific audiences around the globe with originals like Good Morning Call, Cable Girls, Erased, Narcos and Dark. Netflix has also culled its viewer data to make sure it is providing content that is getting watched and marketing that content successfully.

“The streaming giant is no doubt embarking on a grow or die strategy, but if it preserves all the values that make it so formidable, it has a very real changes of remaining on top in the long-term. One thing is for certain though – the SVoD Wars have begun.” Read more about “Why Netflix is the SVOD to Beat” on Broadcast Network.

Third-Party Food Delivery Looks to Subscriptions for Sustainability 

Similar to gaming, the future for third-party food delivery is subscriptions, says The Spoon. The success of companies of food-delivery services like DoorDash and Postmates, both on their way to initial public offerings, bears this out. In a recent article, we covered Postmates who just filed for an IPO. Worth nearly $2 billion, Postmates has had astonishing growth, including record adoption of its unlimited subscription, doubling the number of subscribers in just a year.

DoorDash just raised $400 million, nearly doubling the company’s value in six months from $4 billion to $7.1 billion. DoorDash said it has the fastest growing subscription service in the industry, adding over 30,000 new subscribers to its Dash Pass subscription service each week!

As The Spoon points out, you can get everything from coffee and smoothies to Big Macs and burritos delivered for the right price. In some cases, that means paying a delivery fee. In the case of subscriptions, though, delivery fees are waived in exchange for becoming a subscriber.

“Think Netflix for food delivery: You sign up for a monthly membership, and in return get unlimited delivery on food in your area,” writes The Spoon.

Read more about this burgeoning industry – and the future of food delivery subscriptions – on The Spoon.

U.S. Digital Ad Spending to Exceed Traditional Ad Spending in 2019

Digital ad spending in the U.S. this year will exceed traditional ad spending, reports eMarketer. By 2023, digital ad spending will represent more than two-thirds of total media spending. This year alone, total digital ad spending will increase an estimated 19 percent to more than $129 billion, or 54.2 percent of total estimated U.S. ad spending. eMarketer shares where the majority of those ad dollars are being spent.

“The steady shift of consumer attention to digital platforms has hit an inflection point with advertisers, forcing them to now turn to digital to seek the incremental gains in reach and revenues which are disappearing in traditional media advertising,” says Monica Peart, eMarketer forecasting director.

Read more on the 2019 ad spending trends on eMarketer.

Apple: Give Us 50 Percent of Your Revenue, Publishers 

As Apple fine wraps up the latest iteration of Apple News, it is trying to get news publishers on board to share their content – but there’s a price tag attached. Forget about the 30 percent Apple tax. Apple wants news publishers to share 50 percent of their revenue. That’s a big ask. In a February 13 article for Recode, “The Logic Behind Apple’s Give-Us-Half-Your-Revenue Pitch to News Publishers,” Peter Kafka looks at why.

The first big question is why Apple wants 50 percent when it only takes 15 to 30 percent from app developers (it used to be 30 percent across the board; now it is 30 percent in year 1 and 15 percent each year thereafter). Kafka spoke to a number of industry sources to find out the story. He reports that magazines seem to be on board with the idea, but some news publishers are not.

We’ll skip over some of the details to Apple’s purchase of Texture last year. When Apple acquired Texture, it offered magazine publishers about half of the subscription revenue generated from the service with the caveat that publishers would keep 100 percent of any ad revenue generated. Magazine publishers who have remained with Texture seem OK with that arrangement.

How about news publishers? One told Kafka that the important fact is how much money the publisher actually receives, not what percentage. With Apple’s vast reach, limitless marketing budget and a captive audience of iPhone and iPad users, Apple has the ability to serve publishers up to prospective readers – readers they might not get in front of otherwise.

Kafka points out that the 50/50 split may still not be attractive to the big guns – The New York Times, the Washington Post and the Wall Street Journal – who have built successful digital subscription audiences in their own right, but it may make sense for smaller publishers to give the new arrangement a whirl. We will be curious to see who actually agrees to the deal when the new and improved Apple News launches later this spring. We expect it will be similar to magazines – readers will get access to some of their favorites, including some big name publishers, but they won’t get one-stop-reading like Apple might want.

Read more from Kafka on Apple’s proposed deal to publishers on Recode.