Every week, we bring you the top stories and analyses from the global Subscription Economy.
Netflix and the Economics of Bundling
Excerpts from an article by Michael D. Smith and Rahul Telang in Harvard Business Review.
How can Netflix be so successful while rejecting the most important part of the business: the theatrical release?
To answer that question, it’s important to understand why, for decades, Hollywood studios used an exclusive “windowing” model to release their films. And this starts with an important insight: consumers place radically different values on watching a movie. Some might value it at $15 (“I’ve got to see that new Star Wars movie today!”); others might value it at only $5 (“I wonder what I should rent tonight?”). Studios obviously want to extract as much value as they can from each group without cannibalizing sales to the other.
Netflix is not in the business of selling individual movies to many different customers. Instead, it’s in the business of selling many different movies to individual customers—in bundles. Bundled subscriptions allow Netflix to practice a different kind of price discrimination from the movie studios. The company doesn’t have to figure out how much a consumer values any individual movie on the service. The bundle does that for them—very profitably.
Read the full article in Harvard Business Review.
Renting Recreation Land In The Sharing Economy Age
Excerpts from an article on PYMNTS.
Digital platforms are connecting landowners with outdoor enthusiasts who want to use their land in the age of Airbnb. PrivateAcre is “a way for a new generation to access the outdoors,” said Erik Johnson, the company’s co-founder and presiden. With the sharing and gig economies, Johnson said, enabling outdoor access for the younger generation is not the same as it once was. Consumers, for instance, might not be sure how to get a taxi anymore if it’s not on Uber or Lyft.
At a time when sharing economy sites focus on houses and apartments, his site centers around what’s outside the four walls of a building. While some of the listings on the platform could have lodging, the site focuses on activities such as hunting and fishing. However, Johnson said that the company wants to cater to other outdoor trends as well. He has seen “incredible movement” in other activities. Kayaking, for one, has a following and drone flying is “new and very popular,” Johnson noted.
The platform works much like other sharing economy platforms: Consumers can browse properties on the site and see photos along with maps of some of the available activities. In addition, Johnson said the reservations process works much like the early days of Airbnb.
Read the full article in PYMNTS.
Subscription streaming channel PBS Living to premiere Thursday
Excerpts from an article on Current.
PBS Living, a new over-the-top streaming channel featuring lifestyle and how-to content, will launch Thursday on Prime Video Channels, an Amazon subscription service.
Subscribers will pay $2.99 a month in addition to their Amazon Prime membership to watch episodes of iconic series including This Old House, Antiques Roadshow and The French Chef, Downing said in the email to GMs. Newer programs available on the channel include the food show Milk Street and travelogue No Passport Required.
PBSd, a partnership between PBS and WGBH in Boston that handles digital and video sales, is also negotiating deals with other platforms for the PBS Living channel.
Read the full article in Current.
Bird Platform to Launch in New Zealand, Canada, and Latin America
Excerpts from a press release by Bird.
Bird has announced that it’s rolling out Bird Platform to providers in Canada, Latin America and New Zealand. “Thousands of entrepreneurs and local business owners have expressed interest in partnering with Bird and joining the movement to reduce car usage,” said Travis VanderZanden, founder and CEO of Bird. “Through Bird Platform we help empower independent entrepreneurs to bring environmentally-friendly transportation options to their community while investing in a sustainable future for everyone.”
Cities around the world are faced with tackling the reality of car congestion and carbon emissions and pollution that contributes to the climate crisis. The introduction of shared e-scooters 18 months ago sparked a transportation mode shift to cleaner, affordable vehicles in more than 100 cities. Shared e-scooters are already replacing millions of car trips and the pollution that comes with them, and both Bird and Bird Platform partners will continue to work with cities to help them redesign their transportation networks so that they are safer and cleaner for everyone in the community.
Read the full press release on Bird.
For more Subscription Economy resources and events, head to www.subscribed.com