The second quarter was a momentous one for Tronc (NASDAQ: TRNC), the owner of the Chicago Tribune, New York Daily News, Orlando Sentinel and other media properties. Among the second quarter highlights was a 3.9 percent increase in total revenue and 89 percent growth in digital-only subscribers, bringing total digital-only subscribers to 212,000 at the end of the second quarter.
Last week, Kaplan Test Prep and Cengage announced a new partnership, bringing free test prep and live academic support to Cengage Unlimited subscribers. At the outset of the partnership, the test prep offerings include GRE, GMAT, LSAT, MCAT, DAT and Praxis. In addition, Cengage Unlimited subscribers will get free access to Kaplan’s HelpSuite, giving them academic support for physics, chemistry and organic chemistry.
On the heels of a fresh round of financial reports, subscription companies are saturating the news headlines. In this week’s round-up, DC Entertainment is opening its streaming subscription for pre-orders on Google Play, YouTube offers cash to creators to use and promote new features, Unified Payments launches a subscription-based payment processing service, and Spotify tests unlimited, skippable audio ads.
This is a good time to be in the online dating business. Match Group (NASDAQ: MTCH) reported its second quarter financial results last week, including total revenue of $421 million, a 36 percent increase year-over-year. This increase was driven by 27 percent average subscriber growth and 8 percent growth in average revenue per user (ARPU). The company’s Tinder dating app along grew by 299,000 new subscribers to 3.8 million at the end of the second quarter.
Yesterday, MoviePass raised its rates from $9.95 to $14.95 per month per subscriber, just two weeks after running out of money and securing a $5 million emergency loan from a hedge fund. This is one of about a half dozen pricing changes – we’ve lost count – over the last year or so, causing concern that MoviePass doesn’t have a good handle on its business model. Running out of operating funds wasn’t MoviePass’s only recent mistake, however. The site experienced an outage the weekend Marvel’s Ant-man was released, frustrating moviegoing subscribers.
The wait is almost over. Nintendo of America announced last week that it will finally launch its much-awaited online subscription service in the second half of September. After the launch, a subscription will be needed to play multiplayer games like Splatoon 2, ARMS, Mario Tennis Aces and Mario Kart 8 Deluxe online, reports Newsweek. Single player and local multiplayer games will continue to operate as they do now. Nintendo has also revealed pricing for the new subscription service:
Meredith Corporation (NYSE: MDP) ended last week on a high note, releasing its fiscal 2018 full year and fourth quarter results on Friday. For the fourth quarter, Meredith reported total revenue from continuing operations of $788 million, a 77 percent increase year-over-year. Earnings from continuing operations were $17 million, down from $43 million for the same period last year. However, adjusted EBITDA was $160 million, a 76 percent increase year-over-year.
Another blockbuster merger is in trouble. On Thursday morning, Tribune Media Company (NYSE: TRCO) announced that it was backing out of a $3.9 billion deal with Sinclair Broadcast Group and filing suit against the company for breach of contract. In the lawsuit filed in a Chancery, Delaware court, Tribune seeks compensation for losses incurred as a result of material breaches in the merger agreement between the two companies, including Sinclair’s promise to obtain regulatory approval as soon as possible and divesting stations in specific markets to facilitate that approval.
In this week’s subscription headlines, The Verge reports that Amazon is working on a new Prime Video interface for mobile, Tableau’s transition to the subscription model is working, and Apple’s Tim Cook drops hints about Apple’s plans for video. Also this week, Warner Music acquires Uproxx, FX makes its ad-free FX+ platform available to all subscribers, and Rooster Teeth creates a $2.5 million development fund for animation creators.
The New York Times Company (NYSE: NYT) reports solid performance in the second quarter as its digital subscription business continues to grow. Financial highlights for Q2 2018 include total revenue of $414.6 million, a 1.8 percent increase year-over-year. Subscription revenue of $260.6 million grew 4.2 percent, other revenue of $34.7 million grew 40.0 percent and advertising revenues of $119.2 million decreased 9.9 percent in comparison to the same period last year.
The streaming video-on-demand world can be challenging for niche subscription services, and not all survive. CuriosityStream, a streaming subscription service launched by Discovery founder and executive chairman John Hendricks, has amassed nearly 1 million subscribers and hopes to keep growing. The service, which features documentaries and series featuring science, technology, history, health and more, originally launched in 2015 with a subscription-only model, but last week the service announced its transition to a hybrid business model that has both an ad-supported tier and a subscription tier.
Amidst allegations of sexual misconduct by CBS chairman and CEO Les Moonves, CBS Corporation (NYSE: CBS.A and CBS) reported $3.47 billion in revenue, a 6 percent increase year-over-year. The company also reported net earnings from continuing operations of $400 million, or $1.05 diluted earnings per share. In an August 2 news release, Moonves said streaming video services CBS All Access and Showtime OTT are exceeding the company’s expectations.
Multi-channel eCommerce platform Shopify (NYSE: SHOP)(TXS: SHOP)reported strong revenue growth of 62 percent in the second quarter of 2018 with total revenue of $245.0 million, driven by Subscription Solutions revenue of $110.7 million, a 55 percent increase year-over-year, and Merchant Solutions revenue of $134.2 million, a 68 percent increase. Subscription Solutions revenue was driven by growth in Monthly Recurring Revenue and an increase in the number of merchants using the Shopify platform for their online businesses. Merchant Solutions revenue was driven by Gross Merchandise Volume and growth in Shopify Capital and Shopify Shipping, each more than doubling revenue over Q2 2017.
Last week, Facebook announced that the company is expanding its commitment to news publishers, investing $3.5 million in a three-month Membership Accelerator pilot program to help news organizations maximize the their membership programs. In addition, Facebook will extend its Local News Subscription Accelerator pilot that launched earlier this year and contribute $1 million to the 2018 NewsMatch campaign which matches individual donations to more than 100 nonprofit newsrooms, said Campbell Brown, global head of news for Facebook in an August 2 blog post.
In this week’s subscription headlines, EA is ready to launch its Origin Access Premiere Subscription, Kroger is starting a delivery service in four cities to compete with Amazon and Walmart, and Red Hat is exploring blockchain options. Also this week, Verizon offers safe WiFi, PayPal has 244 million customers, and nasty spyware infects 11 million.