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Consumers Facing Subscription Service Overload Will Only Get More Choices

Filed by KOSU News in US News.
May 9, 2013

YouTube is expected to announce in the coming days that it will launch paid subscription channels, a first for the online video platform that’s been around since 2005. But, with the growing number of subscription services available for entertainment, shopping and news, some consumers say they’re reaching digital subscription overload.

Mary Gaughan and her husband get near that point when they think about what movie or TV show they want to watch on free evenings at home. “Where do we get it? We’ve already paid for these services. Is it [streaming free] or should we get the DVD? It’s just like become a headache to me,” Gaughan said.

For entertainment, the Gaughan’s subscribe to Neflix, Amazon Prime and cable TV. For music, they have a Spotify account and occasionally use Pandora and listen to radio. “It’s just way too complicated and I feel like I need a strategy for managing my media consumption,” said Gaughan.

When she thinks about all the little fees on her credit card she just laughs.

Gaughan is 48, married and has two kids. So she concedes her aversion to all these online subscriptions could be generational. But, 27 year-old Michael Weinberger feels the same way. He maintains subscriptions for Hulu, Netflix, Spotify, and a variety of other services. He got rid of cable because of the price, and decided against Amazon Prime because he didn’t want additional dings on his credit card.

“I felt that to sign up for another program which would have ultimately been a fee and probably would have been redundant, I kind of hit a saturation point,” said Weinberger.

Forrester Media Analyst James McQuivey says a lot of professional producers aren’t happy with only ad dollars, leading to YouTube’s move toward paid subscriptions.

“Youtube is in a revenue problem,” says McQuivey. “They are doing a good job getting advertising from the content that is appropriate for advertisers, but its not enough money for the companies making all of the videos on Youtube, spending what is now millions of dollars.”

While McQuivey agrees that YouTube is entering an increasingly crowded market of entertainment subscription services, he says it’s actually still early days for consumer subscription choices.

“There is so much new content coming out and so many new ways to watch it that I think consumers are in a relatively extended honeymoon period with the idea of subscription,” says McQuivey.

The proof may be in the numbers. Paid subscribers to Hulu doubled in 2012 and hit 4 million last quarter. Netflix is inching up to 30 million paying subscribers. Since launching in the US about 18 months ago, the music service Spotify has picked up more than a million paying customers.

As the number of separate services increases it’s likely to open the door to a new business — new tools or services that help consumers organize all those subscriptions and make it easier to find what they want. [Copyright 2013 NPR]

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