We survived another week in the Twilight Zone, as we head into the weekend. While you are lounging in your back yard or cozying up on your couch, we’ve got some subscription stories for your reading pleasure. First, we talk about the dramatic effect COVID-19 has had on news media outlets. They have been downright decimated, and there is no end in sight. Also this week, Zuora shares its latest state of the subscription industry report, iPhone’s App Store has 32 more malicious apps, AMC Theatres might be going bankrupt, and for a lighter segment, Tubefilter shares last week’s top YouTube videos.
News Media Outlets Have Been Ravaged by the Pandemic
News media outlets have been absolutely decimated by the coronavirus pandemic. In fact, every day it seems we hear about a new media organization that is imposing layoffs, furloughs and pay cuts. The New York Times estimates that approximately 28,000 workers at news companies in the U.S. have been hit with such circumstances. At the same time as journalists and other media employees are losing their jobs, demand for their work is up.
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David Chavern, president and chief executive of the News Media Alliance, told The New York Times that traffic numbers are “way up,” including digital subscriptions are still attracting new subscribers. At the same time, advertising revenue is significantly down. As a major source of revenue, this revenue loss is what is hurting news organizations in an industry that was already in crisis.
Here are a few of the media outlets impacted by COVID-19:
- Tribune Publishing is implementing permanent salary reductions for non-union employees making more than $67,000, effective April 19.
- Los Angeles Times will furlough 40 non-newsroom employees and non-union employees and reduce the pay of senior managers.
- Vox Media is said to be furloughing 100 employees this week.
- MNG, owned by hedge fund Alden Global Capital, is cutting staff at the Denver Post, Boston Herald, Kingston (New York) Daily Freeman, the Monterey (California) Herald, and other newspapers.
- BuzzFeed has cut salaries in April and May for all U.S. employees who make more than $40,000. Top executives will reduce their salaries by 25%.
- Gannett is implementing unpaid furloughs for journalists making more than $38,000 of one work week per month for April, May and June. Gannett executives will take a 25% cut in pay.
- Lee Enterprises is imposing pay reductions and furloughs. Executives will take a 20% pay cut. All other employees will either have pay reduce or a furlough of two weeks of salary.
Fortunately, there is a ray of sunshine in the darkness. Hearst CEO has promised its journalists that thee will be no furloughs or no pay cuts, reports Poynter. In fact, the company will give a 1% bonus to all employees. Hearst’s 24 daily newspapers include the San Francisco Chronicle, Houston Chronicle, and Times Union of Albany New York.
Zuora Shares How Subscription Companies Are Faring in COVID-19 Climate
For the last three years, subscription platform Zuora has published the Subscription Economy Index (SEI) that measures the collective health of the subscription economy. In Zuora’s latest report, the company shares some key findings about subscription companies’ reaction to the coronavirus outbreak. Here are a few highlights from their COVID-19 report.
- 53.5% of subscription companies have not seen a significant impact to their subscription acquisition rates
- 22.5% of companies are seeing subscription growth rates increasing
- 12.8% of subscription companies are seeing slowing growth
- 11.4% are seeing churn overtake acquisition rates
- OTT video streaming services – In March 2020, streaming video subscription companies saw growth of seven times their growth over the prior 12-month period.
- The subscription rate for digital news and media grew three times.
- E-learning subscriptions grew 2.9 times.
- Subscription companies in the communications software sector saw growth of 1.4 times.
- Subscription growth for business IoT services only grew at half the rate of the previous 12 months.
- Consumer IoT subscription services grew at one third the rate of the last 12 months.
- Sports-related subscription services saw a significant decline in new subscribers and had difficulties retaining subscribers.
Zuora offered four key takeaways from the results cited in their report.
- The subscription model is flexible, so companies have the ability to optimize their offerings for long-term customer lifetime value.
- Companies who offer the option to pause subscriptions during this challenging time build trust with their subscribers and reduce overall churn.
- Subscription companies that transition to creating new offerings (e.g., new product bundles, pricing plans, promo offers) are more successful than those who remain stagnant.
- Companies who offer extended free trials or free subscriptions during the coronavirus crisis will build goodwill while expanding their reach to new audiences.
iPhone’s App Store Has (Another) Malicious Software Problem
The Android and Google Play Stores have had their array of problems when it comes to malicious software, involving a bait and switch subscription technique. This time, Apple has been the victim of this kind of attack. Apple released a list of 32 App Store titles that have been affected.
Forbes reports that there have been subscriptions that charge as much as $500 annually. The problem Apple runs into is that their users will sign up for a trial of a subscription, and much like most subscription services, never get an email saying that their free trial will be over soon. Users can access a list of their subscription services they have via the App Store and their settings, but it is not always easily found. Many of them charged weekly after a week trial period.
Digital Information World has a full table of the apps that were downloaded, how many were downloaded, what the charge was, and more. These apps include everyday things like horoscopes, QR readers, and emojis. Overall, these apps had 3.5 million downloads between them, and they all raked in a total of 4.6 million dollars.
Some users were charged for these apps for up to a year, but that doesn’t mean that they hadn’t been cleared from their phone. With iOS and Android, you must clear the subscription from your subscriptions menu in your respective app store, or you will continue to be charged. Apple has mentioned working on implementing a pop up that would remind you to cancel your subscription to an app when you delete it, but that has yet to be seen or reported.
AMC Theatres Might Be Going Bankrupt
AMC Theatres had a strong 2019, and that could be their last strong year. They outdid MoviePass with the movie subscription game and had a rise in profit and customers last year. Box offices have been booming with the resurgence of going to the movies, but the last couple of months, attendance has been down, and in most cases, shut down.
AMC Theatres is in talks to hire Weil Gotshal, a bankruptcy firm, to explore a potential Chapter 11 Bankruptcy filing. Market Watch reports that the firm has also worked with Sears and the Fairway supermarket chain. These talks are in their early stages, so it is not confirmed whether or not they are declaring bankruptcy.
The theatre chain closed its 630 US theatres due to the coronavirus pandemic, forcing them to furlough 25,000 employees. CEO Adam Aron has insisted that they will be up and running by mid-June, but coronavirus reports could mean the opposite. The New York Post reports that AMC has a debt load of $4.9 billion, and is at risk of breaching its debt covenants as it burns through cash amid the COVID-19 crisis.
Many are saying that things will open in the opposite order they were closed in, meaning malls will probably be one of the last things to open back up. AMC has most of their locations in malls, meaning they will likely be reintroduced at the same time malls are. Many movies that were in theatres while the pandemic started didn’t hit the numbers their producers had their eyes on, but they seem to be doing well in home releases.
While the bankruptcy rumors run amok, this does not necessarily mean that the movie business, or the company, will shut down. Chapter 11 bankruptcy would mean that the company could re-open their theatres. Like everything else, we’ll just have to wait and see.
Tubefilter: Most Watched YouTube Channels, April 6-12, 2020
Enough with the doom and gloom and onto a more fun story! Each week Tubefilter reports the top 50 most viewed YouTube channels worldwide. Here are some fun facts from last week’s top 10 YouTube channels:
- Cocomelon Nursery Rhymes – 834,258,881 views, a 5% decrease over the prior week
- T-Series – 610,562,518 views, a 21% decrease
- SET India – 578,256,528 views, a 3% increase
- Like Nastya – 575,760,989 views, a 6% decrease
- Kids Diana Show – 556,731,121, an 11% decrease
- Movieclips – 368,289,906, flat over prior week
- WWE – 318,927,682, a 6% decline
- Vlad and Nikita – 306,656,455, a 9% decrease
- El Reino Infantil – 303,708,955, 19% increase
- Little Baby Bum, Nursery Rhymes and Kids Songs – 280,850,360, a 7% increase
What videos are you watching right now?