Amazon is King for Subscription Services

These days it seems that everyone has started offering subscription services. From CBS, to Apple, to Microsoft, companies are continuously looking for new ways to monetize, now turning to subscription services as the next step. Ad Age recently declared Amazon the top player in this space, having recently launched Kindle Unlimited, a book subscription service. This addition brings the number of subscription services Amazon offers to nine, proving that the organization knows the value of a customer tethered to a particular company. Amazon’s current subscription lineup includes FreeTime, Amazon Prime, Prime Instant Video, Prime Music, Amazon Mom, Cloud Drive, Audible Membership, Kindle Unlimited, and Subscribe & Save. 

Amazon brands each of its services differently to make consumers feel as though they are gaining added value from each of the subscriptions, and to allow consumers to interact with their company in a way they see most fit. Forrester recently launched a report urging companies not to jump on the bandwagon and offer subscription services unless they can answer these three questions affirmatively:

1. Does your customer need this frequently? – The best models exploit a behavior that’s already frequent.
2. Can the experience be made more emotionally engaging?  - Companies like Dollar Shave Club have seen initial success because they were able to engage consumers in a humorous and novel way.
3. Will your solution be more convenient than the alternatives? – Hulu Plus, for instance, struggled at first, because it was only available on a small number of devices and did not add enough value beyond their standard offering.

Read all about Amazon’s strategy and further details surrounding subscription services.

Calling all Adam Sandler Fans!

Are you an Adam Sandler fan? If you answered "yes" to that question - you're in major luck. Netflix, the world's largest subscription video service, recently announced that they would be producing four (that's right: FOUR) movies with comic actor Adam Sandler, in an effort to further expand into exclusive feature films. Happy Madison Productions, Adam's production company, will join forces with Netflix to develop the movies. Currently, Netflix operates in close to 50 countries, and the movies will premiere only to their customers. 

According to AdAge and Bloomberg News, Netflix endeavors to add motion pictures to its lineup, which includes "first-run series, newer and vintage movies and TV programs, as well as documentaries and shows for kids." Netflix also recently announced a collaboration with Weinstein and Co. to produce a sequel to "Crouching Tiger, Hidden Dragon." Theater owners nationwide are protesting Netflix's plan to release the feature film on IMAX screens on the same day that the film becomes available for online streaming. This, however, won't be a problem for the Adam Sandler movies, which will not be released in movie theaters. 

This move by Netflix to partner with Happy Madison Productions is most likely a very, very smart move. Sandler's movies do extremely well at the box office, and Netflix has said that his movies are among the most viewed by subscribers--not only in the United States but also worldwide. 

Netflix has found tremendous success in original content, including Orange is the New Black and House of Cards, so this move to feature films is perhaps not so surprising. Netflix is slow to release data on how many people watch their original content, so this takes some of the pressure off of Sandler. It will be exciting to see how this partnership will affect Netflix, Adam Sandler, and the entire streaming landscape. 

SOURCE: http://adage.com/article/media/netflix-making-movies-comic-adam-sandler/295260/

The music biz and the internet

http://www.nytimes.com/2009/05/28/technology/start-ups/28music.html?_r=1&scp=1&sq=music%20lables%20cut%20friendlier%20deals&st=cse



I wanted to post about an interesting article that just came out in the New York Times. It describes how major music recording labels are forgiving music-hosting sites like Imeem the considerable amount of debt they are owed as a result of licensing fees. This is yet another interesting development in the continuing saga of the transformation of the music business as a result of the internet.

Coming from a music background and as an owner of a Brooklyn recording studio, I am fascinated by how music will eventually be distributed and/or sold over the internet. While legal downloading has helped bring in some revenue, it has not nearly closed the gap that the music labels are facing with 20% year over year declines in CD sales. I believe the idea of music being sold on physical media such as CDs is over. It appears that the labels are finally starting to accept the fact that they have no future without internet companies like Imeem and Pandora to help advertise and distribute their product.

However, I wonder if the subscription business model being used by sites like Imeem and Rhapsody will be sustainable in the long run. My feeling is that in the end people feel very personal about the msuci that they love and they want to OWN IT, whether it is stored on a physical medium or not. The idea of paying for a subscription to get access to a large quantity of music isn't quite the same because there is always a 'gatekeeper' like these sites who have to give you permission to access it.While this deal make allow sites like Rhapsody to sustain themselves, in the long run people will want to be able to access their music at any place and time. Having to log on to a site in order to do so will not be possible in a car, in a plane or other places where consumers might want to listen to their iPods. While I also disagree with DRM (digital rights management, where songs sold on sites like Itunes can only be played on the host computer and not shared), I still think a new business model will have to emerge for the music business to once again find a value proposition that customers are willing to pay for...

-Doug