Subscriptions won’t take over the game industry anytime soon - Protocol

Subscription platforms and the smaller cloud gaming services are just a tiny piece of the overall global games market.
Only games lag far behind in shifting away from traditional retail models and downloading toward subscription services and streaming.
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Video games aren’t experiencing a Netflix or Spotify moment after all. At least not at anywhere near the pace that other forms of media adopted subscriptions and streaming over the last decade.
While subscription gaming services have been on the rise for the past few years, thanks largely to the growth of Microsoft’s Xbox Game Pass platform, the shift in consumer spending and consumption hasn’t followed. Instead, subscription platforms and the smaller cloud gaming services often bolted onto them make up a tiny slice of the overall global games market.
It may take years or perhaps even decades, alongside major advances in internet speeds and coverage as well as streaming technology, before these distribution methods supplant the traditional retail model in gaming. And for many popular titles that are given away for free and monetize entirely through in-game purchases, these models may never mesh well.
“I don’t believe that subscriptions will become the dominant monetization of the game sector as it has done progressively within the video and music sectors,” said Ampere Analysis researcher Piers Harding-Rolls at the Game Developers Conference last month. “79% of the total market opportunity in 2021, in terms of consumer spending, was based on in-game monetization. That means I think it’s very unlikely that we’re going to see a wholesale shift to subscription monetization.”

Subscription and cloud gaming represents just 4% of North America and Europe game markets, or roughly $3.7 billion, according to a recent study Harding-Rolls published at Ampere. Of the available services, only 5% are streaming-only offerings, while a majority (60%) use Xbox Game Pass.
The study found that most Game Pass users download their games and do not stream them at all. Harding-Rolls said he expects the combined subscription and cloud gaming market to grow to about 8.4% of the U.S. and European game markets by 2027, a far cry from the adoption of subscription services and streaming in the music and video markets.
This tendency to compare games with music and video makes sense. Games are a relatively new form of media, compared with film and recorded music, and yet all three simultaneously underwent the same forms of disruption caused by widespread internet access, digital distribution and the advent of streaming.
Yet only games lag far behind in shifting away from traditional retail models and downloading toward subscription services and streaming. That’s largely because of the complex economics of how games are funded, sold and monetized and the variety of styles, file sizes and length in entertainment hours they provide.
The music industry, due to complex factors involving piracy, digital distribution and the technical sophistication of streaming music files, embraced Spotify and other subscription platforms at much more rapid clip than other forms of media. After all, most songs are around the same length, and streaming an MP3 is a much lighter lift than a video or an interactive video game stream.
About 83% of all U.S. music revenue now comes from streaming services, according to the Recording Industry Association of America, and industry leader Spotify has more than 400 million monthly users and a 31% market share of the more than 500 million paying subscribers worldwide.

TV lags behind much further, in part because of the tangled knot of economic relationships at the heart of TV production and distribution. Streaming platforms like Netflix and Hulu account for only 26% of time spent watching TV, according to a report last year from research firm Nielsen, while most of America (64%) still spends a majority of their time watching cable and network TV.
The film industry, which suffered severe drops in theater attendance due to the pandemic, has long since shifted to predominantly digital distribution, according to the Motion Picture Association of America’s 2021 report. But the share of viewing is evenly split among cable and satellite providers and subscription services, the report said.
Meanwhile, many of Hollywood’s most powerful incumbents are also incentivized to maintain the traditional theater model. When some media conglomerates tried releasing films they funded directly onto the streaming services they owned, a number of directors and theater chains aggressively pushed back, turning the trend into a short-lived experiment in trying to sidestep the economic impact of COVID restrictions.
Now, viewers are forced to either pony up if they want to see new films outside the theater or wait about 45 days for it to land on a streaming service. (Granted, 45 days is much shorter than the standard 75-, 90- or 120-day windows of the pre-pandemic years, and being able to pay even $20 or $30 for a film still running in theaters, as Amazon and Disney now allow, is a substantial shift in the film distribution market.)
And then there are video games, which only saw the scales tip in favor of buying digital in 2020, thanks to the pandemic. Prior to that, most consumers bought video games on Blu-ray discs from big-box stores like Best Buy, Walmart and GameStop and ecommerce retailers like Amazon.
Games are still overwhelmingly downloaded locally on devices like consoles and PCs, rather than streamed over the internet through a cloud service like Xbox Cloud Gaming or Google Stadia. The transition toward these new distribution formats for gaming is not accelerating at anywhere near the rate it is with film and TV, which is seeing record highs in subscription sign-ups and shifts in viewing behavior.

Harding-Rolls found that less than 10% of Xbox Game Pass’ more than 25 million subscribers only stream games. This suggests that subscription services may play a larger role in helping bridge the gap between consoles and PCs and the markets in which gamers are mainly using mobile phones.
“Streaming distribution will gradually become more important to the games content subscription market over the next five years,” Harding-Rolls said. “While console users represent the core of Microsoft’s service for example, its future growth will increasingly rely on converting non-console users through its streaming functionality.”
Sony made arguably the most public rejection of a subscription-first future for the game industry when it rolled out an understated refresh of its PlayStation Plus platform. Instead of trying to compete directly with Microsoft’s Game Pass, Sony said it was uncertain about the long-term viability of releasing big-budget games onto a Netflix-style subscription platform that cost much less per month than the cost of a single game.
Sony’s new PlayStation Plus, coming later this year, now includes two more costly tiers that offer a mix of classic games and newer first-party games that had been on the market for at least a year or more, in addition to a cloud streaming component borrowed from the company’s PlayStation Now service for the priciest plan. Missing from any of the three tiers are first-party games the day they release to retail channels, as Microsoft does with Game Pass.
“It’s not a road that we’re going to go down with this new service,” PlayStation CEO Jim Ryan told Gamesindustry.biz last month, referring to releasing major first-party games like Horizon Forbidden West into its higher-ter subscription offerings. “We feel if we were to do that with the games that we make at PlayStation Studios, that virtuous cycle will be broken. The level of investment that we need to make in our studios would not be possible, and we think the knock-on effect on the quality of the games that we make would not be something that gamers want.”

“Subscription has certainly grown in importance over the course of the last few years,” Ryan added. “But the medium of gaming is so very different to music and to linear entertainment, that I don’t think we’ll see it go to the levels that we see with Spotify and Netflix.”
“It’s very hard to launch a $120 million game on a subscription service charging $9.99 a month,” Shawn Layden, a former PlayStation exec in charge of its internal studios, said last year. “You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment. That’s why right now you need to take a loss-leading position to try to grow that base. But still, if you have only 250 million consoles out there, you’re not going to get to half a billion subscribers. So how do you circle that square? Nobody has figured that out yet.”
Even Microsoft has gone out of its way in recent months to reassure developers that subscription gaming isn’t the one business model to rule them all, and that it does in fact believe in having a variety of different approaches to game distribution. That could be in part because Game Pass, while still growing, has failed to scale as fast as the company expected, adding just 7 million users from January 2021 to January 2022.
“For us at Xbox, there’s not one business model that we think is going to win. I often get asked by developers, ‘If I’m not in [Game Pass], am I just not viable on Xbox anymore?’ And it’s absolutely not true,” Microsoft Gaming CEO Phil Spencer said in an interview with Xbox executive Sarah Bond at GDC 2022.
“It’s really about the diversity of business models, and this is where I sometimes contrast against other forms of media we get compared to whether it’s music, whether it’s video. Where, the models have really condensed down to maybe one or two business models that are working,” Spencer added. “I fundamentally believe a strength for us in the video game business is the diversity of business models and the strength of those.”

Indeed, having a diversity of business models, with a variety of price points, is one reason why the gaming industry has ballooned into a much larger economic force than Hollywood and the music industry.
But it’s those same factors that make it difficult for new forms of distribution to catch on, at least not without significant investment from some of the most cash-flush companies in the tech and gaming space. Microsoft, thanks to its Office, Windows and Azure businesses, can afford it. Many other companies, including Nintendo and Sony, cannot, and we see that play out with how hesitant Microsoft’s competitors are to jump into the deep end of subscription gaming.
For now, however, it looks like the “Netflix for games” moniker may be applicable only to Game Pass, based on the scope of Microsoft’s ambitions. And it may take a very long time until we know just how early Xbox has been to gaming’s next big distribution shift.

Monday, April 25
Robinhood and Coinbase have a fix for volatile trading revenues
Cloud spending is hard to control. Cloud providers only do so much to help.
The FTC is going after dark patterns. That’s bad news for Amazon Prime.
How sharing cars can make cities more livable
Tuesday, April 26
Truebill turned canceling subscriptions into the ultimate recurring-revenue business
Most consumers don’t appreciate subscriptions. Productivity nerds do.
Subscriptions won’t take over the game industry anytime soon
It’s possible to save money on cloud computing, but it will cost you
Wednesday, April 27
Voter engagement as a service: Votus plans a personal touch for politicians

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Nick Statt is Protocol’s video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
As the climate changes and weather becomes more unstable, people are turning to personalized weather service subscriptions.
Subscription weather services can help shine a light on the increasingly erratic weather.
Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).
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In the beginning, there was the local weatherman providing the day’s forecast with the morning news. Then came the Weather Channel and its local on the 8s. More recently, free or low-cost apps have proliferated on smartphones.
But as the climate changes and the weather becomes more apocalyptic, relying on a few weather dispatches throughout the day via the local news or even the Apple weather app isn’t enough for some. A growing number of people are subscribing to hyperlocalized and activity-specific apps and websites to keep ahead of the ever-changing weather.
Eric Holthaus, meteorologist, writer and founder of the service Currently, said people are increasingly interested in weather information that is specific to their needs and location, and not just to the city they live in.
“Weather has always had a very personal relationship between people and the environment, and we’re trying to build a weather service that reflects that,” he said.

Currently is fairly new on the scene, having launched in June 2021. It provides daily, local weather newsletters written by meteorologists and other weather experts who live where they’re writing about. For power users, the service also offers on-demand text communication with those meteorologists, who answer such varied questions as “what was that weird cloud?” or “how heavy of a jacket should I wear to the baseball game tonight?”
The service tends to see subscriptions surge in the days leading up to a major weather event or crisis; the January blizzard in Boston was Currently’s biggest day for picking up subscribers so far, per Holthaus. It operates in 17 cities across the U.S., the Caribbean and Europe, with New York and the Dominican Republic as the two most-subscribed newsletters.
There are other services that serve a very specific audience, such as Surfline. The surf forecasting company has existed since 1985 — early users received surf reports via fax machine — that has evolved into a mobile subscription service that reaches 5.1 million people each month and conducts roughly 250 billion calculations on ocean and weather conditions daily.
“We like to think of ourselves as the most advanced ocean forecasting platform and global subscription business,” said Kyle Laughlin, the company’s CEO. “People use the platform as frequently as they check their email.”
Climate change has added urgency to the forecast. Carbon pollution is now making nearly every heat wave more intense or likely. It’s also contributed to an uptick in heavy downpours and explosive wildfires and helped sear in a megadrought across the West. Currently, in particular, tries to make that connection clear in its local forecasts, in part to encourage both personal and political action.
“People have their attention focused on the weather during those high-impact events, and that’s also when they realize that systems need to change around climate,” Holthaus said. “So we provide those messages of the climate science behind weather events as they’re happening for that reason.”
The climate crisis has also changed Surfline’s work. Rising sea levels are affecting beaches and surf breaks around the world, while tropical cyclones are likely growing more intense. In the Atlantic, hurricanes and tropical storms have become more common in recent decades and a growing number have appeared outside of traditional hurricane season, which runs from June to November.

Kurt Korte, director of Atlantic Forecasting for Surfline, said the surf season is beginning earlier on the East Coast as a result. Whereas surfers may once have been able to time their trips to the shore to a predictable season, forecasting has become an increasingly complex enterprise in recent decades, which Surfline parses for its growing base of subscribers.
“We’ve had the ability to see those changes and adjust to them, and apply those changes going forward,” said Korte, in reference to shifting meteorological events. “And if you have a change in sea level, that can impact where the waves break, the shape of the waves and how big they are.”
And there is opportunity for these services to expand beyond individual plans, especially as climate change continues to make weather more violent; demand has emerged from both the public and private sector for hyperspecific weather and wave data that can allow companies to plan for extreme events that could do everything from disrupt the supply chain to cancel events.
Currently is starting a B2B weather service, providing the same sorts of interactive information to weather-sensitive clients like wedding venues, flood restoration companies and outdoor sporting sites and events.
And Surfline’s models, which incorporate 37 years of meteorological and wave data as well as its extensive webcam network, are not used purely for surfers looking to catch the perfect wave. State and municipal agencies have turned to Surfline for the seabed and coastal erosion data that the company’s fleet of cameras and other monitoring devices have been providing for years. The company has a partnership that provides California State Parks with data to create an erosion strategy for San Onofre, where a decommissioned nuclear power plant abuts the shoreline.
“What we’ve found is that people who work in municipalities and governments and educational agencies that are studying these challenges happen to be surfers, and they understand from a consumer perspective the value of those cameras and what we’ve been able to provide,” Laughlin said.

Surfline also announced an agreement with Fox Weather in January, giving Fox exclusive broadcast rights to its 500 cameras set up at breaks worldwide; Laughlin cited “tremendous demand” for those feeds when major storms hit the coast.
Subscription weather services can help shine a light on the increasingly erratic weather. “As a forecaster, observation is our goal,” said Korte. “If you have the ability to know what the atmosphere is doing at any particular time, it makes your ability to forecast what’s going to happen so much easier. Otherwise, you’re kind of just taking a stab in the dark.”

Monday, April 25
Robinhood and Coinbase have a fix for volatile trading revenues
Cloud spending is hard to control. Cloud providers only do so much to help.
The FTC is going after dark patterns. That’s bad news for Amazon Prime.
How sharing cars can make cities more livable
Tuesday, April 26
Truebill turned canceling subscriptions into the ultimate recurring-revenue business
Most consumers don’t appreciate subscriptions. Productivity nerds do.
Subscriptions won’t take over the game industry anytime soon
It’s possible to save money on cloud computing, but it will cost you
Wednesday, April 27
Voter engagement as a service: Votus plans a personal touch for politicians
Auto-renewing subscriptions are irritating. Some states are cracking down.
Thursday, April 28
Netflix & churn: Streaming services struggle with subscribers jumping ship
Weather subscription services are increasingly essential on an overheating Earth

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).
Trusted Future is a non-profit organization dedicated to the belief that we need smarter, better-informed efforts to enhance trust in today’s digital ecosystem in order to expand opportunities for tomorrow.

Co-Chair, Trusted Future

The most important element for building trust in the digital ecosystem is to have producers of products and services dedicate themselves to infusing trust into the lifecycle of their products and services. Only with trust can we maintain a global information infrastructure and obtain the full benefits of technology into the future. From software and hardware development, to supply chain, to product security and incident response, to threat modeling, to certification, to vulnerability management, to treatment of customer data, to corporate governance, to relations with governments globally, to security information sharing with others in the ecosystem, and through employing a systems engineering approach to trust management — employing this holistic approach to trust is the cornerstone of trust going forward.

To get there, we are creating the first holistic Trust Framework that existing and emerging technology producers and users can use to instantiate trust and answer the simple question — should I trust this product or service in my infrastructure, or with my data? As producers adopt and users demand this Trust Framework — the trust needle will move.
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Co-Chair, Trusted Future

For those that are designing, developing or deploying cutting-edge technologies, trust has now emerged as a central factor in determining whether and how fast transformative new technologies will be adopted in the marketplace. We’ve all seen how technologies have transformed the way we work, live and learn. And just over the horizon a new set of breakthroughs offers even more potential.
Innovators across the country are unlocking new technological frontiers using AI, 5G, IoT and the cloud to create opportunities never before possible that fundamentally expand our ability to solve important problems —technologies that can improve health outcomes, cut greenhouse gasses and make factories more competitive. But we risk squandering or even delaying these opportunities when people lack the foundational trust necessary to take full advantage of their potential. For example, a small factory owner may not adopt smart manufacturing technologies to improve business if they don’t trust it to protect them from factory-idling ransomware or a consumer privacy data breach. It is more important than ever that we infuse strong privacy, robust security and inclusive design into our technologies from the start so that we can trust that the technologies of tomorrow will be even better than today.
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Chair of DLA Piper’s U.S. Regulatory and Government Affairs Practice

Trust, by its nature, is a function of human expectations about the reliability of another party (or parties) in the context of some relationship. For our purposes, building trust in the digital ecosystem requires consideration of the existing relationships that parties in that ecosystem have with each other.
In the United States, the trust relationships between many public and private institutions that are prominent participants in the digital ecosystem (from government agencies to tech and telecom companies) and communities of color are notoriously weak.
These relationships are frequently stained by deep-seated and historically reinforced suspicion, trauma and fear of exploitation or persecution. For example, survey data shows that many in communities of color harbor particularly strong distrust of the government when it comes to their personal information. This data also shows stark differences in community perceptions of how much control individuals have over personal data, privacy risks and concerns about information disclosure.
In order to foster greater trust in the digital ecosystem, we must approach our task from a culturally and historically informed perspective. This approach is essential to effectively communicate to all consumers how holders of data are managing the security and privacy of their data, to best develop and implement policy and to understand the efficacy of those policies.
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3Com Founders Principal Research Scientist at the MIT Computer Science and Artificial Intelligence Lab, Founding Director of the MIT Internet Policy Research Initiative and an adviser to Trusted Future

Trust depends on knowing that those who hold data about us are managing the security and privacy of that data. Yet, you can’t manage what you don’t measure. We’ve made real progress on digital privacy and security — we know more about how to build more-secure systems, many organizations have chief privacy officers and chief security officers and there are new laws like the GDPR that demand companies pay more attention to privacy.
But we’re still in the Stone Age when it comes to our ability to actually verify that systems are worthy of public (or regulatory) trust.
We’re measuring all the wrong things. For example, in cybersecurity, we count the number of threats detected and averted, number of systems with up-to-date software and how many potential vulnerabilities are visible to adversaries. But that only tells us how much effort we are putting in, not whether the billions of dollars we spend on cybersecurity are pointed in the right direction. What we really should care about is which potential risks are likely to cause actual losses. The only way to do this is to also collect data about actual losses from among the billions of otherwise harmless attacks. It’s understandable the firms don’t want to share sensitive (and embarrassing) information but without it we are flying blind. In my research group at MIT, we’re closing this gap with a tool called SCRAM that allows us to collect data on security losses privately and then analyze what specific failures are the cause of those losses. That will allow firms to make better investment decisions, and regulators to craft more sensible, efficient cybersecurity rules. The result will be systems that we can all trust.

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Chair, Baker Botts’ Global Antitrust and Competition Practice
Strong privacy protections that safeguard consumers’ personal information are essential to building trust so that consumers may feel confident enjoying the many benefits of innovative products offered in today’s dynamic marketplace. Consumers need to be able to trust that their sensitive personal information, such as health and financial information, real-time precise geo-location information, Social Security numbers and children’s information, will not be used or disclosed in ways that could result in harm. It’s also vital that businesses honor the privacy commitments they make to the public. A false promise to provide certain privacy or data security protections undermines consumer choice about whether to use a product or service, and erodes consumers’ trust in the ability of businesses to protect their information. Without this trust, many consumers may be less willing to share their data or participate in the benefits of the Internet economy.
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A small upswing in churn has been really bad news for Netflix. The company is not alone with this problem.
Churn has been somewhat steady over the past few years, but there are signs it may be taking a turn for the worse.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
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For subscription video services, signing up new customers is only half the battle. Keeping existing subscribers engaged, and making sure they don’t cancel, is just as important. Just ask Netflix, which saw its share price slide 35% last week after disclosing that it had lost 200,000 subscribers in the last quarter.
Turns out Netflix may not be alone struggling with churn: 37% of U.S. consumers canceled a paid streaming video service over the past six months, according to Deloitte’s 16th annual Digital Media Trends report. And as the number of services increases, so do opportunities for subscription-hopping: 33% of U.S. consumers said they had both added and canceled a subscription over the same timeframe.
“That is a relatively large number, when you think about the amount of money that streaming companies are putting into the content that they’re developing in order to acquire these customers,” cautioned Deloitte Vice Chair Jana Arbanas, who leads the company’s Telecom, Media & Entertainment practice in the U.S.

Churn has been somewhat steady over the past few years, but there are signs it may be taking a turn for the worse. Netflix, for instance, has had one of the lowest churn rates of the industry, with Antenna Analytics estimating in early 2021 that the company’s monthly churn rate was just 2.4% — far below the 7% other premium subscription services were seeing at the time.
By the end of March, that rate had gone up to 3.3%, with subscribers abandoning the service at a significantly higher rate following Netflix’s price increase in January, according to Antenna’s estimates. CFO Spencer Neumann denied a connection to the price increase during last week’s earnings call, but he did acknowledge that cancellations had gone up a bit. “We’re talking 2-3 tenths of a percentage point,” he said.
Still, even small fractions can have a big impact if you’re dealing with hundreds of millions of subscribers, as the company admitted in a 2019 earnings report: “Very small movements in churn can have a meaningful impact on paid net adds.”
And it doesn’t look like things are going to get better for Netflix and its competitors: Both Gen Z and millennials had churn rates of over 50% over the past six months, according to Deloitte’s survey, compared to 40% for Gen Xers and just 17% for baby boomers.
A common refrain among media pundits is that younger people are stingy, and that these customers are bound to change their ways when they grow older and settle into better-paying jobs. Arbanas isn’t buying that, at least not when it comes to churn. Instead, she believes this behavior has a lot more to do with knowing your way around a service’s interface, and the ability to customize your own content bundle.
“As this generation gets older, even though they may have more disposable income, they will still feel quite comfortable navigating those processes,” she said, pointing to the fact that millennials have just as high of a churn rate as Gen Zers. “People predicted that with millennials, and that’s not necessarily the case.”

One reason churn matters so much to subscription services is that the economics of these businesses become more favorable the longer a subscriber stays with them. Mobile phone operators, for instance, have traditionally spent around $340 on the acquisition of a single new customer, which can include buying out existing contracts, or free devices with a long-term plan. After that initial investment is amortized, the profit margin per subscriber dollar increases significantly.
The economics of a streaming company are somewhat different, but keeping churn rates under control can still make all the difference, especially when your business matures beyond the early days of rapid growth.
The good news for the streaming industry is that there are some ways to minimize churn. That’s especially true for the churn-and-return crowd — people who cancel a service when they’re done with the latest season of their favorite show, and then resubscribe when the next season is available.
For years, Hulu has been offering these kinds of subscribers the option to pause their subscription for up to 12 weeks. Arbanas thinks that price cuts could also help tie people over, and hold on to their plan. “We think that there’s a play around greater optionality from a pricing perspective,” she said. This also includes offering ad-supported plans, as Netflix is looking to do now.
In the end, it’s about finding the right plan for the right consumer. “You’ll always have consumers that are really cost-conscious and then a set of consumers that are willing to pay more,” Arbanas said. And it’s not just about the price tag alone: Giving consumers a discount if they prepay for a year, or buy a subscription as part of a bundle, also helps to retain them for longer periods of time. “I’m going to think twice about [canceling] something that’s bundled versus a standalone service,” she said.
However, streaming executives also have to be clear-eyed about the limitations of these measures. Churn rates that increase or decrease by a fraction of a percent may make a big difference to services like Netflix, but chances are that’s as far as the needle moves either way.

“I don’t think that churn will ever be at zero percent,” Arbanas said. “A fair amount of it will be the cost of doing business.”

Monday, April 25
Robinhood and Coinbase have a fix for volatile trading revenues
Cloud spending is hard to control. Cloud providers only do so much to help.
The FTC is going after dark patterns. That’s bad news for Amazon Prime.
How sharing cars can make cities more livable
Tuesday, April 26
Truebill turned canceling subscriptions into the ultimate recurring-revenue business
Most consumers don’t appreciate subscriptions. Productivity nerds do.
Subscriptions won’t take over the game industry anytime soon
It’s possible to save money on cloud computing, but it will cost you
Wednesday, April 27
Voter engagement as a service: Votus plans a personal touch for politicians
Auto-renewing subscriptions are irritating. Some states are cracking down.
Thursday, April 28
Netflix & churn: Streaming services struggle with subscribers jumping ship
Weather subscription services are increasingly essential on an overheating Earth

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
At least 20 states have laws on the books regulating predatory subscription models. Is federal regulation on the way?
National Consumers League executive director Sally Greenberg developed a list of best practices for subscription models.
Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol, covering breaking news. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.
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Everyone knows the feeling of checking a credit card statement to see random charges from subscriptions you forgot you signed up for last year, last month or even last week. You rack your brain: Was it really that expensive? And why didn’t you get a warning before the charge?
Auto-renewing subscriptions can sneak up on you without warning. Sometimes you just don’t expect the fee to hit at a specific time — setting a reminder for future you is helpful in those instances — but companies have also been known to renew contracts on an irregular basis or after lengthy periods of time. Others might increase the cost of a subscription over time without asking you whether you want to opt out.
At least 20 states, as well as the District of Columbia, have some type of law on the books that regulates auto-renewing subscriptions, many of them spurred by legislators’ own experiences. Some of the laws are narrow and focus on only one type of subscription, like online subscriptions or those related to gyms (perhaps the most annoying of all). But at least five bills passed since 2018 force companies to offer advance notice and ease of cancellation for subscriptions in most circumstances, with enforcement measures in place to hold companies accountable should they not comply.

Colorado state Rep. Cathy Kipp championed such a law regulating subscriptions in Colorado after a friend couldn’t get out of a dating app subscription.
“They said, ‘No, you’re not getting your money back,’” she said. “We were like, ‘Well, that’s just not OK.’”
As state laws race (or rather, crawl) to catch up with our increasingly subscription-oriented lives, a lot of subscription regulation comes from Apple and Google. Sneaky app subscriptions have been known to surprise users with surprisingly high new rates, lure customers into free trials that only last a few days or less or mislead people into thinking they’ve signed up for shorter subscriptions than they intended.
Currently, app developers don’t have to ask iPhone or Android users whether they’re OK with being charged for a recurring subscription upon renewal. Developers do have to ask users to opt in to price increases with a push notification, and users have to actually tap “I agree” to continue. But Apple is piloting a change to that policy, starting with Disney+. The test alerts subscribers that the price is increasing, but instead of opting in, they have to opt out.
Colorado’s subscription law went into effect Jan. 1, 2022, and applies to all industries, whereas a previous Colorado law only regulated health club subscriptions. It requires upfront disclosure of subscription terms, simple methods of cancellation and renewal notices. Companies that violate the rules are subject to civil penalties up to $20,000 per violation, or $50,000 per violation in cases where the customer was over 60 years old.
Many of the laws regulate predatory cancellation processes, which are deliberately opaque to make it difficult for a consumer to get out of a subscription. These include processes which require customers to show up in person, wait endlessly on the phone to speak to someone or pay for additional months or years before they can get out of a contract. Colorado’s law, for example, requires that cancellation mechanisms be “readily accessible” and that companies in violation refund overpaid subscription fees.

Companies resort to these tactics because it makes them money. And that’s not always a bad thing for consumers who might not want to confirm they still want something every week, month or year. Regardless, it’s likely in a company’s best interest to avoid annoying customers, which is inevitable when it auto-renews subscriptions just to squeeze out some extra cash.
National Consumers League executive director Sally Greenberg has developed a list of best practices for subscription models informed by her work advocating for stricter regulations. She said a good subscription model gives customers full disclosure of the terms when they enroll, notifies customers in advance of each time they’re charged, explains any price increases and lists cancellation procedures in clear, conspicuous font somewhere they will definitely see them.
Laws that regulate subscription models, she said, should also require that companies will give customers a full refund with an added penalty should they not comply with the law.
“There has to be financial risk,” she said.
State laws that comply with all of Greenberg’s guidelines (especially that last one) are hard to come by. But laws in California, Delaware, Idaho, Delaware, Colorado, New York and Washington, D.C., all require customers to be notified before charges, and require companies make it at least somewhat easy to cancel.
Where these laws differ most widely is in enforcement. In New York, companies that violate auto-renewal laws not only receive fines and a possible injunction in the state, but also must allow customers to keep whatever they received as part of the subscription as a “free gift.” Idaho’s law, on the other hand, doesn’t outline any specific penalties.
“We try to be business-friendly and don’t want to put businesses in a corner,” said Idaho state Sen. Jim Patrick, who is also chair of the committee which sponsored the bill. Patrick said the state is hesitant to pass any new regulations on businesses at all — perhaps a testament to how important the state saw this particular bill.

Even with state laws on the books, most attorneys general don’t have the resources to chase after bad subscription providers. In an emailed interview with Protocol, Colorado Attorney General Phil Weiser said that enforcement has required extensive outreach to customers, ostensibly to inform them of their rights, and companies throughout the state. Kipp said that she had personally called several news companies that charged her for an auto-renewing subscription without notice only to find out they weren’t aware they were in violation of Colorado’s barely 4-month-old law. And Patrick pointed out that companies outside of the state are often too much effort to pursue.
“For us to go find somebody in California — well, it just isn’t going to work,” he said.
Momentum has gathered behind a federal law that would more tightly regulate predatory subscription models. Weiser pointed to the 2010 Restore Online Shoppers’ Confidence Act, or ROSCA, as a model for the Colorado bill, as it includes requirements for companies to provide “simple” cancellation mechanisms. However, its definition of “simple” is vague, and some companies have used it as an excuse to not offer online cancellation options or to require customers to call a customer service line during a narrow time window.
The FTC also reviewed its rulebooks last summer to see whether it had any power to curb predatory subscription practices. The agency found it could use some rules put in place nearly five decades ago, in 1973, to bring cases against a children’s education company, DirecTV and a few others. The regulations prohibit companies from interpreting a customer’s silence as consent to charge them, but are loose and out of date. Greenberg said that it’s important customers report predatory practices to the FTC, especially while they work on updating their processes.
But federal legislation could change things. The Unsubscribe Act would make it so customers can cancel subscriptions in the same manner they signed up — i.e., if they only had to click a single “subscribe” button to be enrolled, cancellation should be a one-click process, too. It also requires that companies be explicit about contract terms before enrollment, ask for additional consent to charge a customer when they transition from a free trial to a paid subscription and remind customers about the plan on at least a quarterly basis.

The bill has died before in the House, but as the COVID-19 pandemic turned us all into online shoppers, lawmakers became more aware of irritating subscription practices. The bill has been championed for years by California Democrat Mark Takano, who reintroduced it last summer. Sens. Brian Schatz, John Thune, Raphael Warnock and John Kennedy sponsored companion legislation in the Senate.
Simultaneously, Sens. Chris Van Hollen and Yvette Clarke are pushing for even more aggressive regulation in the form of the Consumer Opt-In Act. This bill would require companies to obtain affirmative consent from customers to charge their credit card any time a long-term subscription is renewed, at least once a year in the case of short-term auto-renewing contracts and in any case where a customer has not used a subscription product for at least six months.
It’s possible neither law will pass this session — between a war in Ukraine, ongoing supply-chain and COVID-19 crises and the coming midterms, Congress has higher priorities. But it’s hard to deny momentum for federal regulation is mounting.
“There’s a lot of interest among senators, and that’s something new,” Greenberg said. “There’s no [state] bill which includes all the requirements we would like to see, but there’s certainly an effort to curb abuses.”

Monday, April 25
Robinhood and Coinbase have a fix for volatile trading revenues
Cloud spending is hard to control. Cloud providers only do so much to help.
The FTC is going after dark patterns. That’s bad news for Amazon Prime.
How sharing cars can make cities more livable
Tuesday, April 26
Truebill turned canceling subscriptions into the ultimate recurring-revenue business
Most consumers don’t appreciate subscriptions. Productivity nerds do.
Subscriptions won’t take over the game industry anytime soon

It’s possible to save money on cloud computing, but it will cost you
Wednesday, April 27
Voter engagement as a service: Votus plans a personal touch for politicians
Auto-renewing subscriptions are irritating. Some states are cracking down.
Thursday, April 28
Netflix & churn: Streaming services struggle with subscribers jumping ship
Weather subscription services are increasingly essential on an overheating Earth

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol, covering breaking news. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.
Google Cloud’s president and the No. 2 executive under CEO Thomas Kurian is out.
Robert Enslin is leaving Google Cloud to be co-CEO of UiPath.
Rob Enslin, Google Cloud’s president and top executive in charge of global sales under CEO Thomas Kurian, is leaving the cloud computing provider, according to an internal email seen by Protocol.
Enslin will become co-CEO of UiPath, the robotic-process automation company, it announced in a release after this story was published.
Google Cloud is using Enslin’s departure to streamline its sales and customer success organization, which also will see the departure of John Jester, the vice president of Customer Experience, who led professional services, enterprise support, customer success and executive engagement globally for the last three years. The idea is to consolidate points of contact for customers, based on feedback from them and Google Cloud’s Partner Advantage program members, according to the source.
A 27-year SAP veteran, Enslin joined Google Cloud in April 2019, four months after Kurian officially took the reins of the No. 3 cloud vendor. Enslin oversaw a tripling in size of Google Cloud’s customer-facing organization.

Enslin is credited with building Google Cloud’s international sales force through regional and industry leaders, tapping talent from enterprise tech companies including Oracle, Salesforce and SAP. As much as 40% of Google Cloud’s organization is now outside the United States. Enslin also was responsible, in large part, for the uptick in Google Cloud’s SAP business.
Enslin and Jester will leave Google Cloud effective May 1, according to an email Kurian sent to Googlers this morning that was viewed by Protocol. Their roles will not be refilled. Kevin Ichhpurani — who in January added channel chief duties to his role as corporate vice president of Google Cloud’s global ecosystem and channels, and had reported to Enslin — now will report directly to Kurian.
“Over the last three years, Rob and John have led our go-to-market organization and helped us build a solid foundation for the future, and I want to thank them for everything they’ve done,” Kurian wrote in the email. “I have personally learned a lot from working closely with them, I respect them both immensely, and I know we all wish them the very best in their next endeavors.”
Google Cloud confirmed the executives’ resignations and the realignment of its sales and customer success teams.
The announcements come a day after parent company Alphabet reported $5.8 billion in Google Cloud sales – which includes Google Cloud Platform and Google Workspace — for the first quarter that ended March 31, a 44% increase from the same period last year. While still unprofitable, Google Cloud trimmed its operating loss to $930 million from $974 million.
Google Cloud’s planned changes include unifying its sales, technical account management, professional services and customer success personnel under two teams: one covering the Americas and the other covering Google Cloud’s other international territories.
“These changes will put our resources closer to customers and partners, and will accelerate our ability to help them digitally transform,” Kurian wrote in the email to Googlers.
Kirsten Kliphouse, currently a Google Cloud president leading its North America customer-facing organization that works with enterprises and other commercial customers, will lead the new Americas region encompassing the United States, Canada and Latin America. Kliphouse joined Google Cloud in June 2019 from Red Hat and spent 25 years at Microsoft. Eduardo Lopez, Google Cloud’s vice president of Sales for Latin America, will report to Kliphouse.

Adaire Fox-Martin, an SAP veteran who’s been president of Google Cloud’s sales organization in Europe, the Middle East and Africa (EMEA) since last July, will lead the new international region, which also will include Japan and Asia-Pacific. Tomoyuki Hirate, vice president of Sales for Japan, and Karan Bajwa, vice president of Asia-Pacific sales, will report to Fox-Martin.
Lee Moore, the Americas vice president of Cloud Customer Experience, also will report to Kliphouse, while Dana Eaton, EMEA vice president of Cloud Customer Experience, will report to Fox-Martin. Both previously reported to Jester.
“This team will continue its very important mission of helping organizations innovate and drive change to business processes, culture and customer experiences with our products and services,” Kurian wrote in the email.
Bhanumurthy Ballapuram, who has been serving as vice president of Customer Experience for Japan and Asia-Pacific, will take on a new role leading global delivery. His replacement will report to Fox-Martin.
Vice president Atul Nanda will continue leading Google Cloud’s customer support team, which Kurian wrote is a “critical strategic differentiator for the company as we help customers solve their most difficult problems and drive their digital transformations.”
“Beyond these top-level reporting shifts, we are intentionally minimizing changes to ensure our teams stay focused on serving our customers and partners and to continue our strong growth during 2022,” Kurian wrote.
This story was updated to include the announcement that Enslin is going to UiPath.

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