In this week’s edition of Five on Friday, PlayStation is working on combining two subscription services to compete with Xbox Game Pass, Grow Credit is working with students to help build their credit via subscription payments, and a possible mass exodus of subscriptions could be on the rise for 2022. We’re also talking about Jack Dorsey rebranding Square to Block, as well as the shift in Black Friday spending this year, and how the supply chain is affecting shopping trends.
PlayStation Planning New Subscription Service
PlayStation is not a stranger to subscription services. For years, they have had PlayStation Plus, as well as PlayStation Now. They are now working on a new subscription that will combine these two services. It looks like this new service hopes to take on Xbox Game Pass, which allows users to have all of the benefits of Xbox Live Gold, including access to over 100 games, as well as member deals and discounts.
PlayStation Plus was created in 2010 for the PlayStation 3. This allowed users to participate in online multiplayer games, as well as discounts in the PlayStation Network store, saving to the cloud, as well as free games monthly. As consoles have been brought into the new generation, users can access Playstation 4 and 5 games. PlayStation members with a PS5 can have access to the PS Plus Collection, which allows users to upgrade their physical PS4 games to be played on the newest console.
PlayStation Now is Sony’s foray into cloud gaming. They started to bring cloud gaming mainstream in 2014, and other major players in gaming started to follow suit. Currently, there are more than 800 PlayStation games from multiple console generations available to stream. The largest complaints about the service are game lag, lowered resolution, and a lack of newer titles in the library. Hopefully, reviving the service will be able to breathe some life into these new issues.
Kotaku reports that PlayStation’s current plan is to combine the two, and the new subscription will give users unlimited access to a library of both modern and classic PlayStation games. The project is code-named Spartacus, but the name will likely change. CNET reports that they will stick with the PlayStation Plus branding, but ultimately phase out PlayStation Now. The subscription will be offered on PlayStation 4 and 5 consoles, so those that have not successfully secured a PS5 shouldn’t stress.
Kotaku also reports that there will be a tiered option, depending on how much gamers are willing to spend. The lowest-cost tier will look a lot like the existing PlayStation Plus subscription, where users can access a free game monthly, as well as get access to exclusive deals. The middle tier’s offerings will feature PlayStation 4 as well as PlayStation 5 games. The highest cost tier will give subscribers access to games from all PlayStation libraries, including the portable model. This tier will offer extended demos and game streaming. Pricing details are unclear. PlayStation Plus and PlayStation now are currently $10 per month, or $60 per year.
Grow Credit Allows Students to Build Credit with Subscriptions
Good credit is hard to establish, particularly for younger generations, unless they frequently pay bills or have credit history from student loans. Grow Credit is looking to change that and is allowing students to start gaining traction with their credit score through their monthly subscription purchases.
In a news release, Grow Credit announced the rollout of its Credit Builder App for Students. It will be an Apple iOS exclusive for 60 days and rolled out on December 9. This is a partnership between Grow Credit and Blue Ridge Bank NA. This will allow student users to gain access to a $204 line of credit that will then be reported to credit bureaus, which will demonstrate positive repayment history to help build a good credit score.
On Grow Credit’s website, they list over 100 subscriptions that students will be able to grow their credit with, including popular subscriptions like Netflix, Hulu, PlayStation, HBO Max, and others. Students interested in the plan need to make a $17 deposit, which will be refunded after 12 months of on-time consecutive payments. There will also be a $17 monthly spending limit, which will keep students from overextending their budgets.
Grow Credit also offers other lines of credit to those interested in similar services. They offer a Build Free plan, a Build Secured plan, a Grow and Save plan, as well as an Accelerate Membership plan. These options come with different perks, but there will always be financial literacy education included with any membership – a perk that benefits any type of credit customer.
Streaming Services Could See 150M Cancellations as Subscription Churn Increases
Deloitte recently released their 2022 technology, media and telecom predictions, and it’s not looking good for those in streaming. Forbes reports that 82% of consumers subscribe to at least one paid video streaming service, but the average is four. However, with the looming Omicron COVID variant, and people tightening their spending, we could see a mass exodus of subscribers in the next year. Twenty-eight percent of consumers are planning to cut back on their entertainment subscriptions.
The Hollywood Reporter estimates more than 150 million people will cancel one of their paid streaming subscriptions in 2022. The global churn rate for subscriptions is about 30%, with the US having a 38% rate. However, there is potential for more subscriptions to be added than taken away. Like we saw with the release of Squid Game, many users subscribed to Netflix just to watch it, so they could understand the SNL sketch about it. However, is that enough to make people want to stay on the platform, or will they stay just long enough to watch a particular show and then cancel?
It’s not that the streaming services are running out of content. It could be that there is too much content and having too many choices can be overwhelming for some viewers. Disney’s spending budget for content for 2022 more than doubled Netflix’s target for spending, reports Television Business International. The House of Mouse estimated that they would produce around 60 unscripted series, as well as 55 scripted series. Over 100 new series is sure to overwhelm anyone.
When interviewed, Jane Arbanas, the leader of the US telecom, media and technology sector for Deloitte, said, “It is certainly possible that people have a couple of subscriptions that they have serially because of the content that they are accessing; however, I think that there is a continual revisiting about what they are getting out of your service, and a willingness to cancel services or pick up services to customize what they are looking for from a content perspective. The idea of picking up a subscription or a couple of subscriptions and keeping them for years and years is falling by the wayside in favor of this hyper-focused management of these subscriptions.”
People are going over the content they are consuming with a fine-tooth comb and cancelling something they may not have used in over a month. That $9.99 could have been better spent elsewhere. Gen Z currently makes up the majority of the churn-and-return customers because they are learning how to be wiser with their money. Are you planning to make plans to your stable of streaming services next year?
Jack Dorsey Rebrands Square as ‘Block’
We’ve all been to a business that uses Square for payment processing at one point or another – small, independent businesses; farmer’s markets; etc. In a move to show they offer more than just point of sale services, Jack Dorsey has changed Square’s name to Block.
Earlier this year, Square bought a majority stake in Tidal in a $297 million cash and stock deal. The Verge reports that this was a move to develop new ways for artists to support their work. With what they were able to do for individuals with CashApp, they were excited to see how they could support artists with a wider-scale operation. In 2020, Tidal was still behind on payments to rights holders, so this is something Square could have helped with. The investment was a breath of life into the streaming audio company.
Square, now Block, announced in a press release that the name change acknowledges the company’s growth into something beyond the financial sector. Under their belt, Square also owns CashApp, a money sharing service where users can invest in stocks and Bitcoin, as well as TBD, which is focused on building an open developer platform to make it easy to create non-custodial, permissionless, and decentralized financial services. Square, CashApp, Tidal and TBD will all maintain their respective brands. Square Crypto will change its name to Spiral.
The Verge reports that the name change will legally go into effect December 10, but the ticker symbol will not change at this time. There will be no organizational changes. Jack Dorsey said, “Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to build tools to help increase access to the economy.”
Online Spending on Black Friday Sees Decrease
Black Friday, the day that is seen as the official marker for the holiday shopping season, took a slight tumble this year. The Verge reports that the dip went from $9 billion last year to $8.9 billion this year – so a slight dip, but possibly a sign that spending is leveling off. The forecast for revenue this year was slightly lower than predicted as well. A prediction of $111 billion in revenue was made, and the actual numbers have fallen about $2 billion less than that. This is, however, still a $20 billion increase from last year. This might indicate why, in Amazon’s most recent Black Friday-Cyber Monday report, they said the holiday shopping weekend was “record-breaking” but they didn’t share revenue data as they have in past years.
Adobe released a holiday shopping report that breaks down when consumers are spending the most, as well as a breakdown of when consumers started their shopping. Trends from Adobe indicate that retailers more prominently featured deals in the categories of toys, electronics, and computers earlier in November vs at the tail end. Even so, consumers spent more on Cyber Monday than Black Friday. In total, consumers spent more than $10 billion on Cyber Monday.
The Verge also reported that part of the reason consumers started shopping early was due to the global supply chain issues. Out of stock messages have increased by 124% since January of 2020, which makes it harder for people to get what they want.
Amazon is making their own containers to bypass supply chain costs, driving more users to be tempted by Prime Shipping. Many delivery companies are suffering from labor shortages, and U.S. postal mail is having to go across the country by truck rather than by plane. Walmart, Home Depot and IKEA have had to charter their own private cargo vessels in order to get things on time, NBC News reported. The earlier people buy things, the more likely it is that it’ll actually get here close to Christmas. Is this a temporary trend or something that will see more of in 2022?