In this week’s edition of Five on Friday, Comcast agrees to delay data caps for its Northeast region customers until July 2021, and paid newsletter platform Substack openly welcomes competition from Facebook and Twitter. Also, a study by Parks Associates shows that 60% of pay-TV subscribers want to stream movies and TV as part of their subscription, the sale of TikTok to Oracle and Walmart is on hold while the Biden administration looks at the data security issue, and Word Press parent WPVIP buys content analytics platform Parse.ly. Have a Happy Valentine’s Day!
Comcast to Delay Data Caps in Northeast Until July 2021
Comcast customers in Comcast’s Northeast region will get a temporary reprieve from the company’s 1.2TB data cap which was to go into effect in March. Comcast agreed to postpone the data cap and waive early cancellation fees after the Pennsylvania attorney general complained, saying that the pandemic was not the right time to impose such rules, reported The Verge.
Customers who do not fall under one of Comcast’s unlimited data plans (Signature+ More, Super+More and Internet Essentials) will be charged if they exceed the 1.2TB data cap. The fee for going over the data cap will be $10 per block of 50GB exceeded, up to a $100-a-month maximum. Customers can track their usage through Comcast’s data usage meter, after logging into their accounts. Unused data will not be carried over to a future month.
The rules will now go into effect in July. If customers go over the data cap in June, they will receive a “one-time courtesy month credit” to waive overage charges which will be automatically applied. The soonest that customers will be charged for exceeding the data cap will now be August, based on July usage.
States and territories in the Northeast Region which will be subject to this temporary hold are Connecticut, Delaware, Massachusetts, Maryland, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Virginia, Vermont, West Virginia, and the District of Columbia, and parts of North Carolina and Ohio.
Comcast said that 95% of its customers don’t exceed its data caps normally. They offered the following guidelines on how much customers can do within the data cap each month:
- Streaming: 21,600 hours of non-stop music or 500 hours of video in HD
- Gaming: 34,000 hours of multi-player gaming
- Video chat: 3,500 hours of video chat (e.g., remote learning, Zoom meetings)
Why is Comcast doing this? They are likely trying to compensate for the loss of subscribers as cord cutters and cord nevers prefer streaming over live TV and pricey cable packages. However, those same streamers need a good internet connection, which they can get through Comcast, but it comes at a cost. Customers may prefer Netflix, Amazon Prime, Hulu, HBO Max and Disney+ to Comcast’s cable line-up, but Comcast intends to get its piece of the action.
[Editor’s note: We aren’t data experts, but the math doesn’t add up. In a 31-day month, there are 744 hours. Given Comcast’s data above, the only instance in which a household would exceed the data cap is in the video category, unless the company is assuming that multiple people in a household are streaming simultaneously. That said, in December, I – in a single member household – exceeded my data cap. To prevent this in the future, I upgraded to one of Comcast’s unlimited data plans. I haven’t come close to the data cap since, but now Comcast has me right where they want me.]
Substack Welcomes Competition from Facebook, Twitter and Forbes
In January, Twitter acquired Revue to start its own paid newsletter service, Facebook announced it would be offering newsletter tools for independent journalists and writers, and Forbes launched its own subscription newsletter platform. These services would compete with Substack which launched in 2017 to give newsletter writers an opportunity to monetize their work.
Substack’s Hamish McKenzie says, “bring it on.”
“I genuinely believe that Twitter and Facebook getting into paid newsletters is good for writers and a positive development for the media ecosystem. We need more initiatives that give power to writers and reduce the force of the attention economy,” said McKenzie in a February 4 blog post.
He explained that the founders of Substack created the platform out of concern for how the attention economy and social media addictions are hurting us. By creating “a calm space that encourages reflection,” subscribers can read the information they want from writers and journalists they respect without advertising or other distractions.
“There are no addiction-maximizing feeds, autoplaying videos, or retweetable quote-retweets to suck you into a psychological space you never asked to be in. You make decisions about which information to put into your brain based on how well certain writers reward your trust, not based on a dopamine hit gained by refreshing a feed packed with performative posturing,” McKenzie added.
Their business model appears to be both selfless and successful. There are now over 500,000 paid subscriptions available through the Substack platform, and their top 10 writers make a combined total of more than $15 million a year. Substack gets a take of that, of course, but they want to encourage intentional media consumption, and they aren’t threatened by others jumping on the paid newsletter bandwagon.
McKenzie even encouraged Facebook and Twitter to give more power to writers and readers, so they can develop their own relationships and put readers in control of what they see in their feeds.
“I sincerely hope that Facebook and Twitter take this approach and apply it to more than just newsletters, because the world’s information ecosystem is at a crisis point. People are losing trust in each other and losing faith in public institutions. Otherwise-intelligent human beings are being led to believe outlandish conspiracy theories instead of the truth. We need a global effort to unpoison the well,” he said.
However, Substack is not naïve. They know other players are entering the paid newsletter market to get their share of the paid newsletter pie. Substack isn’t scared though. They’ve earned the respect of millions, and they will continue to do their thing. They might even step up their game.
60% of Pay-TV Subscribers Want Streaming Movies and TV as Part of Subscription
In a new study, Parks Associates found that 60% of pay-TV subscribers – which represent about half of U.S. broadband households – want streaming movies and TV shows from a service like Netflix as part of their subscription.
“If there was ever a time when entertainment service providers believed that OTT was a phase, they are now convinced of its permanence,” said Kristen Hanich, Senior Analyst, Parks Associates. “In late 2019, the market reached the crossover point where the same percentage of US broadband households subscribed to an OTT service as subscribed to a pay-TV service, and now OTT adoption outpaces pay TV by double digits.”
“The good news for providers is consumers often have both pay TV and OTT—79% of pay-TV households have both pay-TV and OTT subscriptions. Providers are in a spot where they must redouble their efforts to engage these subscribers by executing new innovations and business models, or risk accelerating customer losses,” Hanich added.
Of course, it comes as no surprise that the COVID-19 pandemic dramatically increased adoption of streaming video services, including subscription-based and ad-supported services. The average number of streaming services in a household is 3.8, while those who also have pay-TV services is 4.2.
Parks Associated share the following statistics:
- 43% of pay-TV households are interested in making video calls on their TVs
- 40% want to control smart home devices and security systems from their TVs
- 34% want to play video games on the TV through a cloud-based gaming service
“Pay-TV providers must keep offering their most valuable content, which includes live sporting and cultural events,” Hanich said. “Additionally, they must offer access to streaming, target new service to their interested customers, and perhaps be willing to take a hit on pricing until this chaotic market stabilizes.”
How many streaming services do you watch? How many do you access directly through your broadband provider?
TikTok Sale to Oracle and Walmart Put on Hold by Biden Administration
After a love-hate relationship with the Trump administration, the TikTok sale to Oracle and Walmart has been put on hold by the Biden administration, reports the Wall Street Journal. The administration wants time to review whether or not TikTok is a national security threat. Of specific interest is how the Chinese government could access data gathered by TikTok from American users of the popular social media platform. TikTok and parent company ByteDance did not oppose the delay.
“We plan to develop a comprehensive approach to securing U.S. data that addresses the full range of threats we face,” National Security Council spokeswoman Emily Horne said. “This includes the risk posed by Chinese apps and other software that operate in the U.S. In the coming months, we expect to review specific cases in light of a comprehensive understanding of the risks we face.”
The battle between the Trump administration, ByteDance and TikTok escalated last summer when then-President Trump issued executive orders intended to lead to the eventual ban of TikTok. Trump gave ByteDance 90 days to divest itself from its American assets and any data TikTok had gotten from American users.
After a conversation between Trump and Microsoft CEO Satya Nadella, Microsoft agreed to explore the purchase of TikTok’s operations in the U.S., Canada, Australia and New Zealand. That deal fell through, however, when Oracle and Walmart agreed to partner to buy the company’s interests instead.
TikTok further fought back against the Trump administration and a potential ban by filing a lawsuit in federal court, alleging they’d been denied due process, that the allegations against data security were invalid, and the federal government failed to act in good faith.
“The Executive Order issued by the Administration on August 6, 2020 has the potential to strip the rights of that community without any evidence to justify such an extreme action, and without any due process. We strongly disagree with the Administration’s position that TikTok is a national security threat and we have articulated these objections previously,” said TikTok in a blog post.
“Now is the time for us to act. We do not take suing the government lightly, however we feel we have no choice but to take action to protect our rights, and the rights of our community and employees,” said TikTok. “In our complaint we make clear that we believe the Administration ignored our extensive efforts to address its concerns, which we conducted fully and in good faith even as we disagreed with the concerns themselves.”
With the case pending, a federal court ruling blocked the government from shutting TikTok down. The Wall Street Journal reports that the most recent ruling on December 7 said that Trump overstepped his authority under the International Emergency Economic Powers Act. What comes next is in the hands of the Biden administration. Stay tuned.
WPVIP Buys Content Analytics Firm Parse.ly
WPVIP, parent company of WordPress, announced this week that they are acquiring Parse.ly, a content analytics firm. Together, the companies will provide enterprise clients like Slack, CNN, Spotify and The Atlantic with content analytics that help them determine the impact of their content. Financial terms of the deal were not disclosed.
“In recent years, WPVIP has expanded beyond our media and publishing roots to focus on empowering the world’s largest brands to build meaningful customer experiences through content. We believe content has this very unique power to drive enterprise growth,” wrote Nick Gernert, WPVIP CEO. “I’m so energized about the future of WPVIP and Parse.ly as combined forces.
Gernert said they chose Parse.ly for the depth of analytics their platform measures. They aren’t just looking at traditional metrics. They are providing useful real-time data and historical analyses that help clients make better business decisions and improve conversions.
Parse.ly founders Sachin Kamdar and Andrew Montalenti will join the WPVIP team, reports Media Post. Kamdar will oversee go-to-market strategy, and Montalenti will lead product. A few of Parse.ly’s current clients include Medium, Bloomberg, Sky, NBC, Gusto, Zapier, Wired and Gatehouse Media.
“We’ve always had a deep admiration for WPVIP as the gold standard for enterprise content teams, and we’re thrilled to join together. From the culture and people, to the product, market and vision, we’re in lockstep to create more value for our customers. This powerful combination of content and intelligence will push the industry forward at an accelerated pace,” said Kamdar, Parse.ly’s CEO.