Happy hump day.
Today’s word is: merchandising. It’s something entertainment providers historically have been terrible at, apart from the now-largely defunct brick-and-mortar record stores and video rental shops, which at least made an effort to tailor the presentation of their wares to different segments of the audience to maximize overall spending.
Outside of the brick-and-mortar setting, however, it has pretty much been take-it-or-leave it, all-you-can eat bundles, like pay-TV, and cookie-cutter music streaming services.
There have been exceptions. Netflix, which actually began as an online DVD rental store, learned how to tailor the presentation of its library to specific users to keep them subscribing, and carried that know-how over to the streaming business. Early virtual-MVPD efforts at “skinny bundles” tried to offer consumers more choice, at least until the networks’ essentially anti-competitive carriage terms caused bundle-bloat. But by and large, the approach has been one-size-fits-all.
With the low-hanging music-subscriber fruit starting to get thin on the branch, however, and cord-cutting ravaging the traditional pay-TV business, there have been some stirrings of interest in a subtler approach.
In the U.K. (for now), where the rate of growth in total spending on music streaming fell in 2019 compared to 2018, folks have been dusting off a report commissioned last year by the Entertainment Retailers Association, which suggested that the streaming market could double by 2023, but only if the industry took new steps to attract non-subscribers and found ways to up-sell current subscribers into spending more. \
Among the reports recommendations: market segmentation, price differentiation and tailored premium offers.
The report details how businesses in other sectors ranging from mobile phone operators to gyms and video subscription services like Netflix have driven growth by creating a range of services for customer groups with different needs who may also value features differently.
Who knew?
Amazon, for one. As a report in Music Business Worldwide this week noted:
Amazon has no less than five streaming pricing tiers in the market right now — from free (with no on-demand interactivity) all the way up to that $14.99 HD subscription. Perhaps the most controversial of these options is a $7.99-per-month offer for existing Amazon Prime members — delivering them all the catalog and perks that a $9.99-per-month Spotify or Apple Music subscription brings.
On the video side, Verizon in the U.S., which has roots in the wireless industry, this week began rolling out a new “Mix and Match” pricing strategy for its FiOS TV and internet bundles. Subscribers will now be able to create their own bundles of internet speed tiers and TV channel packages, as the telco tries to slow the bleeding from cord cutting.
Comcast, meanwhile, is widely expected to bundle in some tiers of its Peacock streaming service for free for certain of its broadband internet subscribers when it launches in April.
The question for both music and video service providers is how far rights owners will let them go in experimenting with different packaging.
Notable
Google puts a lid on the cookie jar
Ad-giant Google said this week it will begin restricting the number of advertising cookies on websites accessed by its Chrome browser and will phase out third-party cookies over the next two years. The move, a response to calls for greater privacy controls, could become a new flashpoint between Google and European publishers who rely on advertising. In September, Google responded to the EU’s new copyright directive by demanding publishers grant it a no-fee license to display snippets of news stories in search results or see their presence reduced to a mere headline and link, likely reducing their traffic.
Calling an Audible
Lawyers for e-book distributor Audible and seven major book publishers told a court on Monday that they had reached an agreement to settle their litigation over Audible’s Captions program. Terms of the agreement have not yet been released. The Captions program uses artificial intelligence to display text in sync with the audio in an e-book. Publishers called that infringement; Audible called it fair use.
Empty theaters
A survey by The Hollywood Reporter and Morning Consult finds that a plurality of adults, 48%, would prefer to watch new release movies via streaming. Only 37% would prefer to see them on the big screen. One big of good news for theater operators: younger viewers (18-29) are almost evenly split between preferring the silver screen and the couch, 45% to 46%.
Pet sounds
Speaking of surveys, Spotify says it surveyed its users and found that 71% of pet owners play music for their critters. So naturally, the music streamer has now created playlists tailored for animals. Not all creatures get equal treatment, however. Dogs, cats, hamsters, iguanas (?!) and birds are in; bunny rabbits, goats and pigs are out. Oink.