In this week’s subscription news, Microsoft takes away perpetual licensing for Office 2019 for home use, Bloomingdale’s launches a subscription rental service, and MoviePass has been accused of changing the passwords of power subscribers to limit usage. Also, this week, the Pacific Standard lost its financial backing, HBO Max sets a goal of 50 million subscribers in five years, and The Boston Globe’s union is planning a walkout due to contentious negotiations.
Loot Crate is out of loot. The popular subscription box service, who sells subscription boxes to gamers, nerds and pop culture fans, has agreed to be acquired by Loot Crate Acquisition LLC. Loot Crate will voluntarily file for chapter 11 bankruptcy in Wilmington, Delaware this week. The sale and subsequent reorganization will go through bankruptcy court. Bankruptcy code requires that other companies be allowed to submit competing bids for the company’s assets. Loot Crate hopes for the sale to be completed in 45 days.
Last week, CBS reported total revenue of $3.81 billion for the second quarter, a 10% increase over Q2 2018’s revenue of $3.47 billion. The company saw growth across all revenue streams, including 13% growth in affiliate and subscription fees, 12% growth in content licensing and distribution revenue, and 7% growth in advertising revenue. The company’s direct-to-consumer OTT services, CBS All Access and Showtime, contributed to the revenue growth in the affiliate and subscription fee category. CBS has a goal of 25 million direct-to-consumer subscribers by 2022.
If you’ve ever been a parent, you know how quickly kids grow and how hard they can be on clothes and shoes. So does Nike, who hopes to ease that burden in the form of a kids’ shoe subscription service. Nike Adventure Club serves the parents of kids two to 10 who wear sizes 4C to 7Y. Launched just in time for back-to-school shopping, the subscription has three tiers: monthly for $20, bimonthly for $30, or quarterly deliveries for $50. Kids can get four, six or 12 pairs a year, depending on the subscription tier.
The New York Times Company added 197,000 net new digital-only subscribers in the second quarter, a positive step toward its goal of 10 million total subscribers by 2025. The company has 4.7 million total subscribers as of the end of Q2. The company now has 3.78 million paid digital-only subscribers, a 30.7% increase year-over-year. Of the 197,000 new additions, 131,000 came from digital news, and the balance came from NYT Cooking and Crossword.
Maven, a digital publishing, advertising and distribution platform, has completed its acquisition of Jim Cramer’s TheStreet, Inc. (NASDAQ: TST), a financial news and investor information outlet, for $16.5 million in an all-cash deal. The deal is being fully funded through debt financing from Maven subsidiary B. Riley Financial, Inc. Cramer, co-founder of TheStreet and host of CNBC's "Mad Money," his team of financial experts and senior management will remain with the company. The combined companies anticipate revenue of more than $50 million in revenue over the next four quarters, not including a newly announced deal with Sports Illustrated.
This week’s subscription headlines offer everything from password management and TV chat devices to relaunch postponements and consolidation: Disney wants to bring ESPN+ streaming service to cable TV, Facebook wants to work with Netflix and Disney on TV chat devices, and Cengage adds free password management as a benefit to its subscription service. Also this week, Gawker postpones its relaunch and lays off its entire staff, Twitter users can now send and receive tips, and a new warning has been issued over Google Chrome’s ad-blocking plans.
On the heels of Regal Cinemas’ new movie subscription service, AMC Theatres reports a stellar second quarter with revenue of $1.51 billion, a 4.4% increase year-over-year. The company also reported net earnings of $49.4 million, an increase of 122.5% year-over-year, and record ticket sales of 97 million, a quarterly high for the company. In addition, the company now has over 900,000 subscribers to its AMC Stubs A-List subscription program, launched in June 2018, exceeding the company’s expectations.
On Monday, New Media Investment Group (NYSE: NEWM), who owns GateHouse Media, agreed to buy Gannett (NYSE: GCI) in a cash and stock deal valued at $1.4 billion. Gannett is the owner of USA TODAY, the Detroit Free Press, the Arizona Republic and more than 100 other publications across the country. GateHouse Media owns 154 daily newspapers in 39 states. Together, the merged company will operate 263 daily media organizations across 47 states and Guam with a combined audience of over 145 million unique monthly visitors. The merged company will use the Gannett name.
Google is testing Google Play Pass, a new subscription that gives users access to a curated collection of hundreds of premium apps and games for $4.99 a month. The subscription is ad-free and it helps subscribers avoid in-app purchases and download fees, says Variety. The subscription comes with a 10-day free trial and is commitment-free. Subscribers can cancel at any time. Android Police said Google Play Pass will have a family plan, but pricing is not known.
On July 31, streaming music provider Spotify reported it had reached 108 million premium subscribers at the end of the second quarter. This represents an increase of 8 million paying subscribers over the prior quarter and a 31% increase year-over-year. The total fell well within Spotify’s guidance of 107 million to 110 million. Monthly churn decreased to a record low 4.6%, but student subscriptions were lower than targeted. Spotify said it missed the target due to poor execution, not due to a soft market.
Last week, food delivery start-up DoorDash agreed to buy competitor Caviar from Square for $410 million in cash and DoorDash stock. The acquisition will expand the number of premium restaurants that DoorDash currently works with and deepen the company’s relationship with Square, who powers in-person and online transactions between restaurants and DoorDash customers. The deal is expected to close this year, following regulatory approval.
This week our subscription headlines feature Alphabet’s quarterly ad budget, selling photo archives for big bucks, and testing audio ads on Alexa Music. Also, Regal Cinemas launches its unlimited movie ticket subscription plan, a Disney+ exec talks about Marvel shows and creating a place that brings families together, and RingCentral’s stock soars to a new high after beating earnings estimates and raising its financial guidance.
In less than five years, Sifted, a corporate catering and data-driven lunch provider, has achieved a major milestone – hitting $10 million in annual recurring revenue (ARR) in less than five years. Available in six U.S. cities (Atlanta, Austin, Denver & Boulder, Nashville, Phoenix and Seattle), Sifted provides chef-crated, catered meals to companies including Twitter, SugarCRM, Samsara and theChive. To date, the company has catered over 1 million meals.
Eager to get its slice of the direct-to-consumer streaming action, NBCUniversal is planning to launch its own ad-supported streaming video service in April 2020, says Variety. NBCUniversal CEO Steve Burke shared a few additional details about the streaming service during Comcast’s second quarter earnings call last week. For example, a team of more than 500 people is working on the service to get it ready for launch. “At NBCUniversal, we're making great progress on the direct-to-consumer streaming service that we announced earlier this year..."