illustration of the number five, representing the five subscription business topics for this column, Five-on-Friday

Five on Friday: News Orgs, Net Neutrality and Netflix

Featuring Congress, the FCC, YouTube and Ubisoft

We are in for quite a weekend with a full moon, Halloween, a time change and a presidential election. Before we get to all that fall “fun,” let’s take a look at this week’s Five on Friday features. There is conversation about whether Congress should bail out news organizations who are hurting because of the pandemic, the FCC has officially repealed net neutrality, and YouTube launches “Shorts,” a rival to TikTok. Also, Ubisoft rebrands its gaming subscription service and makes its games available on Amazon Luna and Google Stadia, and rumor has it that Netflix is testing an audio only mode. Interesting. Have a safe, happy Halloween!

Should Congress Bail Out News Organizations? Proposed Legislation Seems to Indicate “Yes!”

In a column earlier this week, “How Many Plans to Save Local Journalism Are Too Many,” Poynter’s Rick Edmonds questions the many proposed bills to save local journalism. It started this summer with legislative proposal HR 7640, the Local Journalism Sustainability Act, which was sponsored by Rep. Ann Kirkpatrick (D-Ariz.) and Rep. Dan Newhouse (R-Wash.) along with more than 70 co-sponsors from both parties.

If passed, the bill would provide the following:

  • A taxpayer credit of up to $250 per year for subscriptions to local news source, with an 80% tax credit based on the cost of a news subscription the first year and 50% in subsequent years
  • An employer payroll tax credit of 50% up to $12,500 per quarter for one year for journalists and 30% per quarter thereafter
  • Subsidize small business advertising of up to $5,000 the fist year and $2,500 in subsequent years for local TV stations, newspapers and nonprofit outlets

To qualify, newspapers are considered local if more than 50% of their subscribers are located in one state or area with a 200-mile radius. Local papers, including those owned by newspaper chains, would qualify but publications with a national reach like USA Today, The New York Times, the Wall Street Journal and the Washington Post would not.

Edmonds explains that not every newspaper or news organization would choose to take advantage of these tax breaks, but it seems like many of them would want to. It is an incentive for subscribers to sign up for their local newspaper (print and/or digital), knowing they’d get a tax credit that offsets most of the cost of a subscription in year 1 and half the cost in later years. For example, let’s say a subscription to The Seattle Times is $100 a year. In the first year, a subscriber would receive a tax credit of $80. In subsequent years, they are eligible for a tax credit of $50.

There are other bills being proposed including those supported by the News Media Alliance and PEN America. The fundamental question is should Congress bail out the news industry, and if so, what does that look like? Can the news industry be saved? Should the government have a hand in supporting a free press? If so, are there any strings attached?

“To my question in the headline of this piece of how many Congressional plans are too many, a number of people echoed Chavern — many are better than none at all — as had been the case as recently as two years ago. However, a best way forward needs to be sorted out,” Edmonds wrote.

“Each of the main bills on the table have strengths and weaknesses. Sponsoring congressional proponents have typically cast their lot with one or the other. At least a few who are very sympathetic to the plight of newspapers, I’m told, ‘haven’t decided yet which horse to back,’ added Edmonds.

Legislation is one way to support local news, but it will not solve all of journalism’s problems, nor will it save every newspaper. The news industry has been on the decline for more than a decade and, in many ways, it has failed to catch up to the digital business model. This is one opportunity to make a difference – but will it work?

The proposed Local Journalism Sustainability Act is one piece of legislation that has been introduced to support local journalism.
The proposed Local Journalism Sustainability Act is one piece of legislation that has been introduced to support local journalism. Image: Bigstock Photo

It’s Official – FCC Affirms Its Earlier Repeal of Net Neutrality

This week the Federal Communications Commission voted 3-2 to affirm its 2017 decision to repeal net neutrality rules instituted under the Obama administration. The decision had been reviewed by a federal appellate court who asked the FCC to reexamine the issue in terms of public safety, pole attachment regulations, and the inclusion of broadband as part of the Lifeline program. As expected, the FCC will not repeal net neutrality, a move many Republicans supported but which Democrats opposed.

The purpose of net neutrality, which went into effect in 2015, was to prevent broadband providers from blocking or throttling internet traffic and charging companies higher fees for prioritized delivery. FCC Chairman Ajit Pai commented on the agency’s decision to reaffirm the Restoring Internet Freedom Order.

“Fortunately, the fibs, fables, and farrago of fabrications didn’t carry the day,” said Pai. “Instead, Commissioner O’Rielly, Commissioner Carr and I focused on the facts and the law. And we did the right thing. Our decision has been increasingly vindicated over time. The internet economy in the United States is stronger than ever.”

“Today it is patently obvious to all but the most devoted members of the net-neutrality cult that the case against the Restoring Internet Freedom Order was a sham,” Pai added.

In a dissenting opinion, Commissioner Jessica Rosenworcei said, “I support net neutrality. I believe the Federal Communications Commission got it wrong when three years ago it gave the green light to our nation’s broadband providers to block websites, throttle services, and censor online content. I believe this decision put the agency on the wrong side of the public, the wrong side of history, and the wrong side of the law.”

“What the public understood – and the FCC did not – is that this openness is revolutionary. It means you can go where you want and do what you want online without your broadband provider getting in the way or making choices for you,” Rosenworcei added. “It means every one of us can create without permission, build community beyond geography, organize without physical constraints, consume content we want when and where we want it, and share ideas not just around the corner but across the globe. I believe it is essential that we honor this history and sustain this openness in the future – and that is why I support net neutrality.”

Sen. Ed Markey (D-Mass.) has been a proponent of net neutrality for years. Markey said, “Without net neutrality protections, it’s just a matter of time before big broadband providers start raising prices, slowing down internet speeds, and making it harder for families, small business, and students to access the opportunities to recover and rebuild from this pandemic.”

On Tuesday, the FCC reaffirmed its 2017 repeal of net neutrality.
On Tuesday, the FCC reaffirmed its 2017 repeal of net neutrality. Image: Bigstock Photo

YouTube Launches ‘Shorts’ to Compete with TikTok

While TikTok’s future hangs in the balance, YouTube has come up with its own version of short-form video – “Shorts.” The service is currently in beta, starting with a launch in India last month. India banned TikTok in June, along with other apps from China. YouTube has not specified when Shorts will be available in other regions of the world yet.

YouTube made the beta test announcement on its blog:

“Shorts is a new short-form video experience for creators and artists who want to shoot short, catchy videos using nothing but their mobile phones,” said Chris Jaffe, vice president of product management. “There’s much more to come, and over the next few weeks and months, we’ll continue to roll out more creation tools and easier ways to watch short videos on YouTube as we listen to your feedback.”

Shorts, which need to be 15 seconds or less, allows users to create videos by shooting video, stringing multiple videos together, and adding music. With speed controls, a timer and countdown, creators can make their own Shorts. Discoverability is another feature for Shorts, allowing YouTube’s 2 million monthly viewers the opportunity to find Shorts they love.

In August, Facebook launched its own answer to TikTok – Instagram Reels. At launch, Reels was available in more than 50 countries including the U.S., U.K., Japan and Australia.

“Reels gives people new ways to express themselves, discover more of what they love on Instagram, and help anyone with the ambition of becoming a creator take center stage,” Instagram said in the August 5 announcement.

With TikTok faced with an unknown future, it is not a surprise that competitors want to get in on the action. They see an opportunity to participate in the popularity of short form video on existing platforms to gain market share and to keep social media users on their platforms as long as possible. Will Apple be next?

YouTube launches Shorts in India, their answer to TikTok.
YouTube launches Shorts, their answer to TikTok. Image courtesy of YouTube.

Ubisoft Rebrands Subscription Service, Now Available on Luna and Later Stadia

Game creator Ubisoft is rebranding its UPLAY+ subscription service to become Ubisoft+. Also, starting November 10, the company is launching the subscription service across platforms, available in beta now on Amazon Luna and then on Google Stadia by the end of the year.

For those playing on a PC, gamers will get unlimited access to Ubisoft’s current library of more than 100 games for $14.99 a month and new, premium releases including Watch Dogs: Legion, Assassin’s Creed Valhalla and Immortals Fenyx Rising. Unisoft+ subscribers can request an invitation to Amazon Luna and link their accounts. At that point, they can play Unisoft games on Luna for no additional fee during the beta test.

Regardless of what platform a player is on, their Ubisoft subscription will work on each of the three platforms (PC, Luna and Stadia). Their game progress saved as they move from one platform to the next. At this time, Ubisoft does not have a similar agreement with Microsoft’s Xbox or Sony PlayStation.

The rebranding makes sense, because Ubisoft retains the brand recognition Ubisoft has for its popular games. And we’ve all seen the + used to indicate a service is now a premium, paid service (e.g., Disney+, ESPN+, AppleTV+, Walmart+, etc.) It is not original, but people know what the + means which is, of course, a plus.

Ubisoft has rebranded its UPLAY+ game subscription as Ubisoft+
Ubisoft has rebranded its UPLAY+ game subscription as Ubisoft+. Source: Ubisoft

Netflix Tests Audio-Only Mode to Compete with Audio Entertainment

Rumor has it that Netflix is testing an audio-only mode for Android, reports Protocol. With audio-only, Netflix subscribers could listen to the audio track of their favorite shows or movies. This would help Netflix compete with other audio-only types of entertainment like podcasts and audiobooks. XDA Developers first reported the test and said that the audio-only mode will also help users save data. Netflix has not publicly commented on the test or indicated if this is something that would be available worldwide, in certain regions or the world, or not at all.

When we first heard about this, it didn’t seem to us like an idea that would gain popularity, but it is really no different than listening to radio programs, podcast series or audiobooks. It is just another way to access Netflix content. We don’t know if it would be widely popular, but if it doesn’t cost Netflix or subscribers anything extra to offer it, maybe it is worth a try.

Netflix is testing an audio-only version. Image: Bigstock Photo

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