May 23, 2019

Axios Login

By Ina Fried
Ina Fried

Not much new in the sports world; lots new in tech. (See below.)

1 big thing: Streaming's cancel culture problem

Illustration: Lazaro Gamio/Axios

HBO's "Game of Thrones" may be over, but for lots of streaming media companies, winter is coming, Axios' Sara Fischer reports.

The big picture: Data shows that consumers across all ages are more than 30% likely to cancel a subscription streaming service after the show or series they are watching has ended. This creates big headaches for streaming companies over how to keep consumers from leaving, especially as the streaming space grows increasingly competitive.

Driving the news: Most critics and analysts believe that the end of HBO's fantasy hit "Game of Thrones" will not be the total end of live, appointment television, although the decline of that viewing mode is quickly intensifying. But the conclusion of the series does offer the media industry a case study.

  • A new Axios/Harris poll conducted after the "Game of Thrones" finale aired found that that 16% of HBO subscribers say they planned to cancel their subscriptions now that the show is over.

By the numbers: Most people only plan to hang onto subscription services for less than 6 months upon initially signing up, according to a recent Video Entertainment Survey from media research firm Frank A. Magid and Associates.

  • That number dips lower for older age groups.
  • Half of the Gen Z respondents from the survey said they intend to cancel their account after watching a specific or exclusive video at signup.
  • For millennials that number goes down to 45%, for Gen X it's 36%, and for boomers it's only 32%.

Be smart: "Churn," or the industry term for consumers dipping in and out of subscription services, is much less likely to occur with traditional cable subscriptions, because leaving your cable company is hard.

  • Most cable companies require the return of a piece of hardware, like a cable box, and the customer service at those types of legacy companies tends to be inefficient.
  • Streaming services, on the other hand, give consumers the flexibility to sign up easily online and download and install all the necessary software without ever having to talk to a customer service agent. But it also means that they can cancel their subscriptions at any time with virtually no penalty.

What's next: Streaming services are becoming more sophisticated in leveraging marketing deals to reduce user churn.

  • Many are adding free memberships to cable and music subscriptions — subscriptions that people tend to renew annually. Hulu, for example, gives users free access with their Spotify Premium subscriptions.
  • Others are investing more in marketing shows so that they remain relevant longer. Michael Benson, the head of marketing for Amazon Studios, explained how Amazon created a real-life pop-up deli, modeled after the one featured in Amazon's hit show "The Marvelous Mrs. Maisel."
  • "You use pieces of [intellectual property] to create big social cultural events. People like to join in on those types of things," he told Axios at the Collision Conference in Toronto yesterday.
2. FTC's Qualcomm ruling leaves much unsettled

Just 6 weeks ago, it seemed like Qualcomm might finally be able to turn back to business, having settled a long, bitter dispute with Apple. Apple agreed to both a multiyear licensing deal and to buy chips.

Yes, but: A federal judge's ruling adds uncertainty to that arrangement — and all of Qualcomm's other licensing deals. Judge Lucy Koh sided with the Federal Trade Commission on almost all its contentions, saying that Qualcomm's business practices were anticompetitive and ordering the chipmaker to renegotiate its deals with partners.

For the record: Apple declined to comment on whether it would seek any changes to its deal or whether its arrangement with Qualcomm provided for any changes in the event the judge sided with the FTC.

  • But, given Apple's dependence on Qualcomm's chips to ship 5G phones, many observers expect the deal will remain largely intact.

What's next: Qualcomm plans to seek a stay of Koh's order, along with an expedited appeal to the 9th Circuit Court of Appeals.

Meanwhile, Koh’s ruling, in addition to excoriating Qualcomm, spills lots of details on Qualcomm’s dealings with all the major phone makers. So much so, in fact, that Samsung filed a motion hoping to seal its contract with Qualcomm, made public as part of the ruling, according to the Financial Times.

  • Per FT, Samsung maintains that exposure of the details of its deal could inspire rivals to renegotiate.
  • Among the details it's looking to seal is that Qualcomm agreed to pay Samsung $100 million as part of its settlement, with Samsung agreeing to forego any further antitrust claims.
  • Since all this is already public information, it's hard to see what a court seal will accomplish now.
3. Exclusive: Code for America founder to step down

Photo: Steve Rogers Photography/Getty Images for SXSW

Code for America executive director Jennifer Pahlka, who has led the group since its inception, plans to step down from that post once a new leader is found.

In an interview, Pahlka said that she wants to find the equivalent of a "growth CEO" to help the organization increase the scale of its efforts. She likened it to when Mitchell Baker hired John Lilly to run Mozilla. (Her analogy was intentional — Lilly is chair of Code for America's board.)

Under Pahlka's leadership the group has undertaken a number of projects, the most recent of which has been working with counties to help automatically expunge the records of people convicted of marijuana offenses.

What's next: Code for America has hired a search firm to find its next executive director. Pahlka said she plans to keep working on Code for America and related efforts and is not looking for another job in the business or nonprofit sector.

  • “That is not going to happen," she said. "I have a very, very full plate.”
  • As for politics, Pahlka said she wants to remain focused on helping whoever is in government rather than working on a partisan side.
  • "I want to help the people who get elected succeed in actually governing," she said. "That is where I think I provide unique value."
4. Toca Boca raises bar on inclusive character creation

Courtesy of Toca Boca

In adding a character creator tool to its flagship app, game maker Toca Boca wanted to make sure that it represented a wide range of kids and wasn't reinforcing stereotypes.

What's new: The result is a new feature in Toca Life that lets characters choose any skin tone or clothes and offers all clothing and hair options to all characters, rather than asking characters to pick a gender and narrowing the options.

  • "It was our top priority to ensure the UI is as inclusive as possible. Kids should be able to easily create anyone they want: themselves, their families, members of their communities, or anyone else," Toca Boca president Caroline Ingeborn tells Axios."There's no 'default' gender, skin or hair color, age, and prosthetics are easily includable."

My thought bubble: It would be great to see this become the default in the industry, for kids and adults alike.

5. Take Note

On Tap

Trading Places

  • David Mandelbrot is stepping down as CEO of Indiegogo, to be replaced by former 500px CEO and Reddit executive Andy Yang. Mandelbrot cited personal reasons, but his departure comes amid layoffs at the crowdfunding site.

ICYMI

  • The fallout of a U.S. ban continues for Huawei. Several carriers in Europe and Japan delayed launches of Huawei devices amid concerns over whether the devices could be fully sported. Meanwhile, ARM is cutting ties with Huawei, casting doubt on the future of Huawei's homegrown Kirin processors, which are based on an ARM design. (The Verge/BBC)
  • The gadget world went gaga for Playdate, a portable game console with a black-and-white screen and a hand-crank controller. (The Verge)
  • Apple sent invites to the media for the June 3 keynote at its developer conference. Don't worry: I got one and will be there to cover the news. (CNET)
6. After you Login

The Washington Post's Dave Jorgenson interviewed 21 kids of Post employees on Take Your Kid to Work Day and asked them what their parents did. It was pretty great.

Ina Fried