Automakers Can't Give Up The Idea Of Turning Everyday Features Into Subscription Services With Fees

from the pay-more-for-the-same-product dept

At the same time car companies are fighting the right to repair movement (and the state and federal legislation popping up everywhere), they're continuing the quest to turn everyday features -- like heated seats -- into something users have to pay a recurring fee for.

In 2019, BMW had to abandon a plan to charge $80 per year for Apple CarPlay. The company, having learned nothing, began floating the idea of charging a subscription for features back in 2020, when it proposed making heated seats and heated steering wheels something you pay a permanent monthly fee for. Last December, Toyota proposed imposing a monthly fee for customers who wanted to be able to remotely start their vehicles.

Each and every time these proposals come forward the consumer response is swift and overwhelmingly negative. But with $20 billion in annual additional potential revenue on the table between now and 2030, the industry seems poised to ignore consumers:

"Still, automakers see dollar signs. Stellantis (formerly Fiat Chrysler), Ford, and GM each aim to generate at least $20 billion in annual revenue from software services by 2030. Over-the-air capabilities open up huge opportunities for carmakers to introduce new subscription or pay-per use features over time, Wakefield, of AlixPartners, said. Someday, you may be able to fork over extra to make your car more efficient, sportier, or — in an electric vehicle — unlock extra range for road trips."

Keep in mind these are decisions being made during a pandemic when most households continue to struggle.

This sort of nickel-and-diming works well in the telecom sector where captive subscribers often can't switch to a different competitor. But in the auto space, companies risk opening the door to competitors gaining inroads by... not being nickel-and-diming assholes. Many companies may also be overestimating their own product quality; one JD Power survey found that 58% of people who use an automaker's smartphone app wouldn't be willing to pay for it. At the same time, as with gaming microtransactions, if enough people are willing to pay to make it worth it, it may not matter what the majority of car consumers think.

Filed Under: automakers, features, fees, right to repair, subscriptions
Companies: ford, gm, toyota

Cable TV Customers Are Rightfully Pissed They're Still Paying For Cancelled Sports Programming

from the pay-a-lot,-get-a-little dept

For years, consumers have been bitching about the high cost of sports programming as it pertains to your monthly cable bill. Especially for those who don't watch sports, but are often forced to pay the sky high prices for sports programming as part of a bloated cable bundle anyway. One survey a few years ago found that 56% of consumers would ditch ESPN in a heartbeat if it meant saving the $8 per month subscribers pay for the channel. The "regional sports fees" tacked on to subscriber bills have also long been a point of contention because they're often used to help falsely advertise a lower rate.

This is the "norm" in more normal times. During a pandemic, sports have largely been cancelled, but consumers are still shelling out big bucks for sports programming that costs them an arm and a leg. That's resulted in a spike in complaints to NY Attorney General Letitia James, who this week announced she would be asking the nation's six biggest traditional cable providers to reduce or eliminate fees related to sports programming while there's, you know, no sports:

"At a time when so many New Yorkers have lost their jobs and are struggling, it is grossly unfair that cable and satellite television providers would continue to charge fees for services they are not even providing,” said Attorney General James. “These companies must step up and immediately propose plans to cut charges and provide much needed financial relief. This crisis has brought new economic anxiety for all New Yorkers, and I will continue to protect the wallets of working people at every turn.”

Many users pay upwards of $20 in monthly fees for sports programming that no longer exists. That's in addition to the $40 to $50 of each $100 cable bill sports programming is responsible for. But when users call to complain or ask for refunds, they're just ignored. Cable providers aren't exactly thrilled either, with Dish Network saying it wants a break from the $80 million to $100 million fees it pays ESPN for April sports broadcasts given there, well, aren't any. While many sports networks have adapted to the pandemic by airing a lot of reruns, they're not actually airing the content everybody pays an arm and a leg for.

And while cable providers may not like it, they can at least pass those costs along to the consumer, whom experts say is the real loser in the equation:

"One would think that sports network programmers would credit distributors for channels paid for when they can't deliver the content that was promised," LightShed says. Unfortunately, "distributors such as Comcast have to pay sports network programmers regardless if what content airs, and in turn, the consumer is the loser."

That said, charging for services you don't actually provide has long been the MO of the cable and broadcast sector.

Cable TV has, for more than a decade, been plagued by obnoxious feuds between broadcasters and cable providers that routinely end up with consumers losing access to content they pay for. Broadcasters repeatedly want more money for the same programming (often sports), then demand higher rates from cable providers. Cable providers balk, the two sides pout and black out content, and consumers repeatedly lose access to content they pay for. Almost never do you see refunds, and regulators usually treat these feuds as "boys will be boys" behavior between gentlemen, not worthy of intervention.

The problem is that unlike broadband, cable TV is becoming an increasingly competitive market thanks to the rise of streaming alternatives. For many, sports was one of the only reasons to still subscribe to traditional cable TV. With no sports, analysts expect the rate of cord cutting to increase. Traditional cable and broadcast executives already had an extreme allergy to competing on price and channel bundle flexibility, and without their ace in the hole and many consumers facing economic hardship, the sector is going to find charging an arm and a leg for bloated cable TV bundles a far more difficult proposition than ever.

Filed Under: cable tv, covid-19, fees, laticia james, pandemic, sports, subscriptions

The Death Of Ownership: Educational Publishing Giant Pearson To Do Away With Print Textbooks (That Can Be Resold)

from the you-don't-own-anything dept

It sometimes is difficult to get people to understand just how >utterly insane the college textbook market is. You have a captive audience who has no choice but to purchase what the professor requires (which is why it's doubly lame when professors require their own books). But even people who went to college a few decades ago may not be aware of just how much textbook prices have kept rising. A study from 2015 showed that college textbook prices had risen over 1000% since 1977. 1,000%.

Another BLS study from 2016 showed that, in the education space, the price of textbooks had gone up even faster than the cost of tuition (which is also skyrocketing).

In short: college textbooks are crazy, crazy expensive. And one way that people have dealt with this over the years is (1) by buying used textbooks, or (2) by selling back the textbooks at the end of the semester (or in some cases, both). However, that's the one factor that's acted as competition to the textbook market.

And the publishers want to do away with it.

The largest educational textbook publisher, Pearson, has now announced that it's going to phase out print textbooks and move solely to electronic textbooks. If you actually want a physical textbook, you'll only be able to "rent" it:

Pearson said students would only be able to rent physical textbooks from now on, and they would be updated much less frequently.

The British firm hopes the move will make more students buy its e-textbooks which are updated continually.

There's an argument that ebooks have certain advantages -- and can be updated much more quickly. Also carrying around a ton of textbooks can be a pain. But, we're once again left in a world where the concept of "ownership" is left open. I still have a bunch of college textbooks that I sometimes even refer back to. But under this system, if you stop paying your "subscription" fees, those can go away.

And, yes, there's value in embracing a more digital future -- but it's difficult to believe that Pearson is truly doing this to improve the value for students, rather than just upending the older market order, and taking away the ability for people to own and to resell textbooks.

Filed Under: captive markets, copyright, monopoly pricing, ownership, rentals, subscriptions, textbooks
Companies: pearson

If You Think The Reason Internet Companies Snarf Up Your Data Is Because Their Services Are Free, Allow Me To Introduce You To The Telcos

from the free-is-not-the-problem dept

It's been a few years since this kind of argument has come up, but it's one that we've had to swat down a few times in the past: it's the argument that somehow if a company offers a service for free, it means that they'll absolutely snarf up all your data, and that requiring services be paid for directly by users somehow would fix that. This is easy to debunk in multiple directions and yet it still pops up here and there.

The latest is from the technology columnist for the Wall Street Journal, Christopher Mims (whose work I usually enjoy). His latest (possibly paywalled) piece is called, Why Free Is Too High a Price for Facebook and Google with the subhead reading: "Most of the ills traced to these companies are a direct consequence of their no-cost business models." Here's the crux of the argument:

In fact, most of the ills traced to these companies are a direct consequence of their “free” business models, which compel them to suck up our personal data and prioritize user growth over the health and privacy of individuals and society, all so they can sell more advertisements. They make money from the attention and in some cases the hard work—all those status updates, videos and likes are also a kind of uncompensated labor, if you think about it—of their most devoted users.

Of course, it seems rather easy to point out why that's wrong with two examples. First we pay for other services such as our broadband and mobile data providers and they are so much worse on the privacy front, it's not even remotely comparable. It's not as if magically paying for the service has stopped AT&T or Verizon from being horrific on the privacy front. The snarfing up of data doesn't go away if you pay for services.

Second, there are businesses that have been built on giving away free tools without having to snarf up your data. Indeed, that's actually how Google succeeded for much of its early history. It didn't need to know everything about you. It just needed to know what you were searching for. And that was massively successful. It's true that, over time, Google has moved away from that, but others (like DuckDuckGo) have stepped into that space as well. DuckDuckGo is free, and I don't see Christopher Mims concerned that they are magically "compelled to suck up our personal data."

As the saying goes, correlation is not causation. Just because Google and Facebook offer both free services and collect a lot of data, does not in any way mean that one automatically leads to the other (or that removing the "free" part lessens the data sucking).

Much of the rest of the piece is quite a thoughtful look at questions around big tech and antitrust -- which I appreciate -- but then it jumps back into these inevitable claims about "free" including the positively bizarre suggestion that free services undermine democracy. Seriously:

When an online service must be paid for solely through advertising, the company’s overriding incentive is to increase engagement with it: Users see and click on more ads. This drives all sorts of unexpected outcomes. Owing to its engagement-maximizing algorithms, Facebook appears to bear, by its own admission, some responsibility for a genocide in Myanmar.

Other well-documented ills that may have been exacerbated by Facebook include the erosion of global democracy, the resurgence of preventable childhood diseases and what the company itself acknowledges may be wide-ranging deleterious effects on the mental health of millions.

On YouTube, Google’s engagement-maximizing algorithm has been recommending material that denies the Holocaust, Sandy Hook and other tragedies, as well as white-supremacist content and other forms of hate speech, a policy the company on Wednesday pledged to redress. Over the years, YouTube has been criticized for other practices, from driving viewers to the internet’s darkest corners to pushing questionable content on children. Meanwhile, the globally dominant Google search engine has had a hard time avoiding accusations of bias in its results.

Except, once again, this seems like a correlation/causation error. Indeed, there's a strong argument that these "wide-ranging deleterious effects" on mental health or democracy are the kinds of things that would create long term problems for these companies (which does, indeed, appear to be the case). Any company that takes a longer term view of things would recognize that if the platforms optimize in a manner that creates serious problems for the world, that can't be good for long term business, and they can and should correct. Indeed, that's exactly what these companies have been struggling to do over the last couple of years. And it's got nothing to do with their services being "free."

There are plenty of reasonable questions to ask about the power and position of Google and Facebook. And there are reasonable debates to be had about antitrust and the impact of these services on the globe. But tying "free" into the equation without any evidence that that's the problem (and, in fact, with tons of evidence to suggest "free" has nothing to do with any of it) doesn't seem particularly productive.

Filed Under: business models, data, free, privacy, subscriptions

Adobe Warns Users Someone Else Might Sue Them For Using Old Versions Of Photoshop

from the you-don't-own-what-you-buy dept

For years we've noted repeatedly how in the modern era you no longer truly own the things you buy. From game consoles that magically lose important functionality post purchase, to digital purchases that just up and disappear, we now live in an era where a quick firmware update can erode functionality and overlong EULAs can strip away all of your rights in an instant, leaving you with a hole in your pocket and a glorified paperweight.

The latest case in point: Adobe this week began warning users of its Creative Cloud software applications that they are no longer authorized to use older versions of the company's software platforms (Lightroom Classic, Photoshop, Premiere, Animate, and Media Director). In the letter, Adobe rather cryptically implied that users could risk copyright infringement claims by mysterious third parties if they continued using older versions of these platforms and refused to update them. End users, not surprisingly, were equal parts confused and annoyed:

When I pressed Adobe for more detail on why users might risk being sued for using something they thought they owned, they weren't willing to say much more than what was already in the letters:

"Adobe recently discontinued certain older versions of Creative Cloud applications. Customers using those versions have been notified that they are no longer licensed to use them and were provided guidance on how to upgrade to the latest authorized versions. Unfortunately, customers who continue to use or deploy older, unauthorized versions of Creative Cloud may face potential claims of infringement by third parties."

While Adobe couldn't be bothered to clarify this fact, the company was apparently making a vague reference to its ongoing legal dispute with Dolby Labs. Dolby sued Adobe last year (pdf) for copyright violations after it wasn't happy with the new revenue sharing arrangement crafted in the wake of Adobe's 2013 shift toward its controversial cloud-based "software as a subscription" model. There's really no indication that Dolby would actually sue Adobe customers, and it seems more than likely that Adobe was just interested in throwing some shade at Dolby -- without making it entirely clear that's what they were doing.

Regardless, copyright experts were quick to point out that given the overbroad nature of modern EULAs, users are completely out of luck when it comes to having any real legal recourse:

"Dylan Gilbert, a copyright expert with consumer group Public Knowledge, said in this instance users aren’t likely to have much in the way of legal recourse to the sudden shift. “Unless Adobe has violated the terms of its licensing agreement by this sudden discontinuance of support for an earlier software version, which is unlikely, these impacted users have to just grin and bear it,” Gilbert said.

There's plenty of legitimate reasons users may not want to update to the latest versions. Artists and creators often don't like updating to new versions in the middle of a project lest some unexpected bugs cause problems. But again, in the modern era you not only don't own what you buy, but any recourse to the ground shifting beneath your feet is stripped away by overlong EULAs that leave you powerless to actually do much of anything about it. Outside of refusing to buy products from companies that engage in unnecessary scare mongering and routinely undermine your rights, that is.

Filed Under: animate, copyright, creative cloud, lightroom, media director, ownership, photoshop, premiere, subscriptions
Companies: adobe, dolby labs

Misleading Subscription Practices At The Financial Times

from the come-on,-eileen dept

We've spent years highlighting how ISPs especially tend to really screw customers over with things like hidden fees or (a personal least favorite) "low introductory prices" that hide the price jump you'll face at the end of the term. Broadband providers can often get away with those practices thanks to absentee overseers at the FCC/FTC and importantly, the lack of competition. But it's absolutely insane to see those in competitive or struggling organizations pulling the same kinds of stunts. Right now there's all this concern out there about media business models, and lots of publications are pushing people to sign up for their subscription plans. There are lots to choose from, and playing stupid games is not a good idea. That's why I was a bit flabbergasted by the following story, which comes from Hersh Reddy, who co-hosts the Techdirt Podcast. He shared with me this following chat he had with the Financial Times.

You can read the whole insane thing below, in which it appears that FT's policies are designed to trick people (i.e., it's not at all the fault of the poor woman he's speaking to). Specifically, it appears that FT has two "cheap" offers to try to get people: one that is $1 for the first 4 weeks, and another that says a full subscription is $144/year. Here's how it looks on the site:

Notice that on the trial part it says: "Not sure which package to choose? Try full access for 4 weeks." That certainly implies that at the end of the 4 weeks (or within an hour of signing up as you'll see below), you should then be able to "choose" another "package" from this page. But that's not what happened with Hersh, as you'll see:

Eileen (9:17:19 AM): How may I help you?

Eileen (9:17:27 AM): Hi. My name is Eileen. It's a pleasure meeting you on chat. How may I assist you?

Me (9:17:51 AM): I just started a trial subscription and the billing page says the subscription rate is $60+ once it goes onto the regular rate.

Me (9:18:15 AM): But when I look on the subscription page there seems to be cheaper options for pure digital.

Eileen (9:18:28 AM): I would be glad to check your query.

Me (9:18:33 AM): Why does the trial convert at such an expensive rate?

Eileen (9:19:03 AM): Trial offer is available for the premium level of access.

Me (9:19:33 AM): So if I use the trial I can't access the other subscription rates?

Eileen (9:19:48 AM): After 4 weeks, the subscription will automatically renewe in to premium, unless you make changes or stop the auto renewal within 4 weeks.

Me (9:20:20 AM): Is it possible to set my desired subscription after the trial period now, or do I have to wait till after the trial period?

Eileen (9:22:27 AM): We can make changes now, and the change will take effect after the trial period.

Eileen (9:22:33 AM): I will need to ask you a couple of questions in order to locate your account and assist you, is that okay?

Me (9:22:59 AM): ok

Eileen (9:23:03 AM): Thank you, can I start by getting your name, email address and phone number?

Me (9:23:13 AM): Hersh Reddy

Me (9:23:18 AM): REDACTED

Me (9:23:22 AM): REDACTED

Eileen (9:23:26 AM): And lastly, I want to make sure that I am looking at the right account, may I have the payment instrument you use for the FT subscription?

Me (9:23:36 AM): A visa credit card

Eileen (9:24:19 AM): Thank you Hersh. Let me pull up your account now.

Eileen (9:25:24 AM): I can see that your trial subscription ends on Aug 7th.

Eileen (9:25:34 AM): This will renew automatically on that day.

Eileen (9:25:48 AM): We have a digital subscription which is USD 36.00 a month.

Eileen (9:26:08 AM): Digital subscription allows you to have access to online articles and app, except for premium content like lex, epaper, em squared and ft confidential research.

Me (9:26:18 AM): I see that there is a Digital subscription on the FT page that is $2.77/week

Eileen (9:27:13 AM): That will be the equivalent weekly cost of digital annually.

Me (9:27:35 AM): Ok, I would like that.

Eileen (9:27:49 AM): USD 335.40 orUSD 6.45.

Eileen (9:27:57 AM): USD 6.45 per week.

Me (9:28:10 AM): It says 2.77/week on the web page

Me (9:28:47 AM): I'm looking at this web page https://www.ft.com/products

Eileen (9:28:49 AM): How much is the annual cost on line?

Eileen (9:29:10 AM): Let me check the link Hersh.

Me (9:29:50 AM): $144 is the annual cost

Eileen (9:30:56 AM): Can you forward the email to me?

Eileen (9:31:13 AM): I mean can you screenshot the page and email that to me.

Eileen (9:31:33 AM): Can I send you an email instead, and please reply with the screenshot?

Me (9:32:20 AM): ok

Eileen (9:33:21 AM): Thank you.

Eileen (9:33:23 AM): Done.

Me (9:34:08 AM): sent it

Me (9:35:25 AM): I also sent a screenshot of the link I clicked on the subscription page

Eileen (9:35:39 AM): Thank you.

Eileen (9:35:46 AM): Allow me to check these further.

Eileen (9:36:08 AM): Right.

Me (9:36:30 AM): You can click through the subscription to the billing page yourself

Eileen (9:36:40 AM): I can go ahead and apply the USD 144.00 rate to your subscription for Digital access after the trial period ends.

Me (9:36:55 AM): Thanks, I appreaciate your help.

Me (9:37:18 AM): Can you send me an email to confirm that you will do that, so I have it for my records.

Eileen (9:37:36 AM): Sorry, when did you see the offer?

Me (9:37:44 AM): Its on the page right now

Eileen (9:37:44 AM): The USD144.00 offer?

Me (9:37:52 AM): I'm looking at it right now

Eileen (9:38:01 AM): Can you also send me the front page withe the date?

Me (9:38:05 AM): yes

Me (9:38:27 AM): There's no date on the front page

Me (9:38:48 AM): FT.com doesn't have a date.

Me (9:39:16 AM): Also, you can verify the rate yourself by just going to FT.com and clicking the subscription page and then clicking the subscription options.

Eileen (9:39:20 AM): That's what I am doing right now.

Eileen (9:39:28 AM): Please hold on for a few minutes.

Me (9:41:36 AM): If you need help, its this page: https://www.ft.com/products

Me (9:41:50 AM): That gives the list of subscription types

Me (9:42:11 AM): Then if you click the second product it will take you to the subscription billing page. At the bottom of the page is the annual rate.

Eileen (9:42:20 AM): Let me access this now.

Me (9:42:40 AM): If you have a problem try clearing your cache and loading the page again.

Eileen (9:43:32 AM): Hersh, what I will do is to verify the offer first with our marketing team.

Eileen (9:43:42 AM): Can I email you back once it is confirmed?

Eileen (9:43:49 AM): Apologies for the delays.

Me (9:43:52 AM): Sure. But don't you see it there on the web page?

Eileen (9:44:27 AM): No.

Eileen (9:44:42 AM): That is the reason I need to confirm the offer with our marketing team.

Me (9:44:46 AM): Did you click the link I sent you?

Me (9:44:48 AM): https://www.ft.com/products

Me (9:45:17 AM): If you have your own subscription it won't show you the subscription page.

Me (9:45:36 AM): You have to use a browser where you are not logged in with your own account to FT.com

Eileen (9:46:04 AM): i know how to do that, Hersh.

Eileen (9:46:23 AM): The thing is, we do not see the USD 144.00 offer on our website.

Me (9:46:40 AM): look I'm sending you another screenshot

Eileen (9:46:41 AM): That is why we need help of our relevant team.

Eileen (9:46:51 AM): Sure,.

Me (9:47:35 AM): Where are you located? Is it possible you get a different page than what I get in the USA?

Me (9:48:00 AM): This is rather extraordianry

Eileen (9:48:03 AM): It has to be USA.

Me (9:48:17 AM): I am in the USA ... are you abroad?

Eileen (9:48:50 AM): FT is global company Hersh.

Eileen (9:49:22 AM): I am not in the USA but I can access the subscription page and we should be aware if there is ongoing offer.

Me (9:49:23 AM): I know. Is the webpage different in different countries? I mean do you have different subscription offer pages based on location?

Eileen (9:49:28 AM): No.

Me (9:49:44 AM): How is it you can't see the same subscription page as me?

Me (9:49:55 AM): Can you use a proxy to browse from the USA?

Eileen (9:50:10 AM): We need confirmation by our relevant team.

Eileen (9:50:29 AM): If you can hold the line that would be better, is that okay Hersh?

Me (9:50:37 AM): yeah, I will hold

Eileen (9:51:27 AM): Thank you very much Hersh.

Eileen (9:51:46 AM): I am consulting them right now.

Eileen (9:55:23 AM): Almost done, Hersh.

Eileen (9:55:27 AM): Please hold on.

Me (9:55:31 AM): yep

Eileen (9:56:14 AM): Thank you for holding.

Eileen (9:56:26 AM): I got a confirmation from the marketing team.

Eileen (9:56:45 AM): The $144.00 annual digital rate is available for new subscribers in the US.

Me (9:56:45 AM): How come you were getting a different web page than me?

Eileen (9:57:41 AM): What I can do is to switch youu subscription to digital and give you a 25% discounted rate.

Me (9:58:13 AM): So you can't do the trial and then the $144 subscription?

Me (9:58:44 AM): do you mean a 25% discount on the $144 rate?

Me (9:58:58 AM): or on the $360 rate?

Eileen (9:59:11 AM): 25% discounted rate is USD 249.08.

Me (9:59:40 AM): I thought you just said the rate was confirmed as $144?

Me (9:59:57 AM): I'm a new subscriber in the USA

Me (10:00:05 AM): I literally just tried to sign up today

Me (10:00:29 AM): In fact, I signed up right before I initiated this chat with you

Eileen (10:00:35 AM): I am sorry, however, you already have a trial subscription.

Me (10:00:41 AM): HAHAHAHAHAHA

Me (10:00:51 AM): Okay, okay

Me (10:00:54 AM): understood

Eileen (10:01:35 AM): If you wish, I can still get an approval if we could apply any discounted rate to your digital subscription that is closest to USD 144.00.

Me (10:01:36 AM): So, Iet me get this. I clicked the link for the trial at $1 for 4 weeks. As a result of this I'm not a new subscriber. So I can't get the $144/year.

Me (10:01:54 AM): Even though ... I JUST signed up

Eileen (10:01:55 AM): That is correct.

Me (10:02:15 AM): Is it possible to cancel my trial membership right now and redo it as the year subscription?

Eileen (10:02:30 AM): Even if you click the link yourself online, it won't allow you to subscribe to it because you already have a trial subscription right now.

Eileen (10:02:39 AM): Technically, you are a subscriber to the FT.

Me (10:03:06 AM): Technically, I get it. But I mean, non-technically, can we cancel my current trial and just put me on the annual subscription.

Eileen (10:03:15 AM): Yes.

Me (10:03:28 AM): At the $144 rate?

Eileen (10:03:42 AM): You can cancel your trial subscription online via my account or click this link https://myaccount.ft.com/

Me (10:04:00 AM): And then redo it at the $144 rate?

Eileen (10:04:19 AM): Closest to $144 rate, but I will ask approval first and I will get back to you on that.

Me (10:05:23 AM): You need to get approval to cancel the trial membership I signed up for just prior to this chat, to convert it to the current annual subscription rate advertised on your newspaper web page?

Eileen (10:05:54 AM): I need to get an approval if I can honour the discounted rate to your subscription.

Me (10:05:57 AM): https://www.youtube.com/watch?v=oc-P8oDuS0Q

Me (10:06:07 AM): COME ON EILEEN, IM BEGGIN YOU PLEASE

Me (10:06:13 AM): hahaha

Eileen (10:06:29 AM): However, it won't be USD 144.00, but I can check if there is a discounted rate closest to USD 144.00.

Me (10:06:47 AM): Come on ... that is ridiculous

Me (10:07:23 AM): So because I clicked the link that said get 4 weeks for $1/week, now I can't get the annual subscription at $144?

Eileen (10:07:33 AM): That is correct.

Me (10:08:14 AM): Ok, take care. At the very least I'll get some karma on Reddit.

Me (10:08:28 AM): You don't need to ask your manager. I'll just do the subscription through the website.

Me (10:08:29 AM): Cheers.

Eileen (10:08:53 AM): Are you sure you do not need me to get an approval for this Hersh?

Me (10:09:42 AM): I'm sure. Because I don't want to subscribe at a rate more than $144/year, just on principle. I'll just do WSJ for this year.

Me (10:09:57 AM): Take care

Eileen (10:10:21 AM): Well, if you will see that USD 144.00 rate on the subscription page of the FT.com, you should also see, I believe that is written on the website, that this is available for new subscribers that is why it is on the subscription landing page.

Eileen (10:10:33 AM): Thank you, too Hersh.

Me (10:10:39 AM): Of course. Not your fault. FT's fault.

Eileen (10:10:55 AM): Apologies for the confusion.

Eileen (10:11:24 AM): Hersh, I will still make a request for approval and I will send you an email for the progress within 24 hours.

Eileen (10:11:35 AM): I will keep the case open.

Eileen (10:11:35 AM): May I know if there will be any more assistance I can offer today?

Me (10:11:50 AM): That's it

Eileen (10:12:04 AM): Thank you for contacting Financial Times Customer Services. Have a great day! Goodbye now, Hersh.

As a post script, Eileen did eventually call him and say that she got approval to offer him a rate of $149 -- which is still $5 more than it should be. Also, as a clarification, while she claims in the story that the signup page for the $144 price says it's for new customers only that is not true. It's too big to stick in the post, but you can see it here if you'd like.

This is the kind of shady bait-and-switch practices that broadband companies try to get away with. It's pretty shameful to see FT trying it as well. Especially in a time where newspapers are desperate for subscribers. It certainly seems like a damn good reason not to give any money to the FT. Their reporting may be good, but these practices are sketchy.

Filed Under: customer service, deals, journalism, paywalls, subscriptions
Companies: financial times

The Cable TV & Broadband Sector Has A Nasty Billing Fraud Problem

from the sleazy-surcharges dept

As we've well discussed, the broadband and TV sector not only has some of the worst satisfaction scores in modern history. A lack of real competition has long allowed the industry to double down on all manner of bad behavior, whether that's net neutrality and privacy violations, or just unprecedentedly-awful customer service. But in recent years the industry has developed another nasty habit: billing fraud involving everything from falsely signing customers up for services they never ordered to entirely bogus fees designed to let companies falsely advertise lower rates.

T-Mobile was accused last year of signing users up for services they neither wanted nor ordered. Centurylink has similarly found itself in hot water for the same thing on a larger scale, the company now facing lawsuits in more than a dozen states for the practice. Washington State also recently sued Comcast, noting that the company not only routinely signs its customers up for a "Service Protection Plan" they never ordered, but consistently misrepresents what the plan actually does. You may or may not notice a pattern here.

Now Cox Communications, the nation's third-largest cable provider, is being accused of the same thing. A company whistleblower has accused company employees of repeatedly... you guessed it... fraudulently signing customers up for services they never ordered to nab bonuses they didn't actually earn:

Speaking only to the I-Team, two whistleblowers are convinced some Cox Communications sales reps in Northern Virginia are cashing in by signing up customers for services they didn't authorize. Why? To reach monthly bonuses of $12,000 or more.

"How far they're going for a commission payout, to affect thousands of people, it's a heinous, greedy act," said former Cox Communications employee Anna Wilkinson.

Wilkinson, a former sales rep, claims to have notified her bosses at Cox but says nothing changed.

That last bit, where the employee informs management and nothing changes, is par for the course in such stories. In the CenturyLink example above, a whistleblower states she brought the fraudulent behavior to company leadership and was promptly fired for it. The company then launched an investigation into itself and found, miraculously, that it had done absolutely nothing wrong. Lawsuits in numerous states, however, continue.

Also a recurring theme: complaints are routinely made to the FTC but pretty rarely result in action, especially if the company in question is a larger, deeper-pocketed or politically-powerful potential litigant. That is, you'll recall, the same FTC that's supposed to protect us all from net neutrality violations in the wake of the neutering of federal net neutrality law and FCC authority over such companies by the Trump administration.

Of course ripping off customers via erroneous subscriptions to never-ordered services is just part of the problem. The TV and telecom sector also has a nasty habit of imposing all manner of bogus fees to customer bills. Fees that are completely made up and buried below the line for one misleading purpose: to falsely advertise a lower rate at the point of sale, then jack up your monthly bill once you've already had services installed. And again, you'd be pretty hard pressed to find a regulator or lawmaker from either party willing to do much about it.

On the TV side of the equation, this is likely only to result in greater cord cutting as users flock to cheaper, less dysfunctional streaming competitors. But given the rise of regulatory capture and waning competition in the broadband sector, it's a problem that's pretty clearly not going away anytime soon.

Filed Under: billing fraud, broadband, competition, ftc, subscriptions, tv
Companies: centurylink, comcast, cox, t-mobile

The Media's Paywall Obsession Will End In Disaster For Most

from the you're-just-not-worth-it dept

We've written about paywalls for many, many years -- often in fairly critical terms. It's not that we think that paywalls are somehow "bad," but that (1) for most publications, they won't actually work and (2) they are quite frequently counterproductive. In addition, we believe that there are both societal and business advantages to having certain information be available for free. Paywalls are (once again) getting attention, and there it's worth discussing this latest round of interest and why it's misguided. First, the general opinion from media folks on paywalls is pretty nicely summarized by Megan McArdle's recent story (possibly paywalled...) entitled "Farewell to Free Journalism." The key thesis is that the online ad market has basically disappeared, and thus, paywalls are the only option. The first part of the argument is correct: the online ad market has almost entirely disappeared. Non-publishers don't quite understand how massively online advertising rates have declined -- whether it's due to greater and greater supply or Google and Facebook (the usual targets) sucking up all the ad revenue with their superior targeting.

But, just as a data point: ad revenue here at Techdirt is now on the order of about 5% of what it was six or seven years ago. Not down 5%. Down 95%. That... makes it impossible to survive if you're just supported by ads. Thankfully we're not tied solely to that revenue, though the decline certainly hurts (speaking of which: feel free to support us directly). At this point, we barely even consider ad revenue when we look at how the company makes money.

So, if you believe that there are only two revenue models for media: advertising or subscription, it's not hard to see how many publications are jumping over to the paywall (subscription) model. The problem is that just because one business model doesn't work, it doesn't mean that the other will.

The latest big name site to go behind a paywall is Bloomberg. It's unfortunate because they actually do pretty good reporting over there, and as Jay Rosen noted, Bloomberg has a tremendously successful "other" business model in providing its terminals and information to lots of businesses that rely on it. And Bloomberg, somewhat amazingly, has decided to aim high with its paywall, asking for $35/month, which seems significantly higher than most other paywalls. It's so high that Felix Salmon has argued that you should spend that money elsewhere, on smaller sites that need it more -- especially those not subsidized by things like terminals. Furthermore, he points out that Bloomberg is losing money elsewhere on its silly TV station, leading him to argue that this is really about subsidizing the flopped TV station by trying to set up a paywall on the internet side:

...the Bloomberg paywall feels much less justifiable than just about any other paywall. You’re not paying for the news you’re reading; instead, you’re paying for the television content you’re almost certainly not watching. Bloomberg LP might have some strategic interest in the television station, or it might serve some vanity purpose for Mike Bloomberg personally. But it feels wrong to ask for the TV station’s losses to be borne by readers of the website, very few of whom have any interest in its content, and all of whom have much less ability to pay for those losses than Mike Bloomberg does.

Besides, for anyone other than Mike Bloomberg, money is a zero-sum game: If you spend it one place, that means you have less of it to spend somewhere else. If you’re going to spend $420 a year on news, there are much more deserving places to spend it than Bloomberg. Paywalls are here to stay, and that’s almost certainly a good thing for the economics of the news industry as a whole. But a good paywall should pay for the journalism that its subscribers are reading, not for a broadcast folly that almost nobody watches.

Om Malik hits back that Salmon is wrong, and that plenty of people will subscribe to the Bloomberg paywall (often using business accounts), but then goes through a spot-on explanation for why paywalls won't work for most sites, including (importantly) the fact that most sites vastly overestimate (1) how large their audience really is and (2) how much people actually value their content.

And yet, I think the paywall craze which is sweeping the media herd will be a big reality check for the news and magazine publishers. So many of them are drinking their own spiked kool -aid. They will soon realize the size of their “real audience” and will soon realize that they don’t pass the “value for money” threshold. There are very few publications that have a feeling of must-reads and must-haves.

This is an important point, and one we've tried to make a few times in the past, highlighting that all of the metrics you hear about concerning audience side are complete bullshit, but everyone in the ecosystem has strong incentives to keep up the charade. At least they do while they're pitching advertisers. When the actual hard subscription numbers come down, it can be a real wake up call. I'm reminded, of course, of the newspaper Newsday that implemented a paywall with great fanfare... and three months later had a grand total of 35 subscribers. Thirty. Five.

And they were hardly the only one. We've written time after time after time after time of paywalls failing for newspapers, and actually doing a lot more overall harm in terms of reducing both audience and influence.

So the idea that paywalls are somehow inevitable seems foolish. That's not to say that advertising is the answer -- because clearly, it is not. But we do need to start considering more carefully thought out business models for news that go beyond merely putting up paywalls are hoping the advertising market comes back. Again: a paywall can work in certain unique circumstances. But it tends to be highly differentiated news publications with strong, loyal audiences. But, of course, most sites have spent the past decade or so pissing off loyal audiences with ever more intrusive ads, blocking adblockers and watering down the journalism. It's hard to see how those kinds of publications have any realistic path to remaining solvent.

All of that, of course, is just focusing on the media side of the equation. But as many in the media are fond of reminding everyone, having a strong free press is often critical to having a knowledgeable and educated democracy. Indeed, that's quite frequently the argument people make to try to guilt you into paying for news. Without it, the argument goes, democracy itself is weakened. But... if we take that argument to be true, then there's a similar argument that paywalls are similarly bad for democracy, as Buzzfeed's Jonah Peretti argued last year. Indeed, Heather Bryant recently made a similar point on Twitter, noting, in effect, that by putting up paywalls, we continue to feed information to a wealthy elite, while leaving everyone else out.

We talked about this a bit in our recent podcast responding to people who have been arguing that free social media is somehow "bad" by pointing out that it's fairly incredible that anyone could look at the wealth of information, knowledge and connectivity created by the internet and argue that it's somehow bad that people can access so much, so easily. It feels extraordinarily elitist to say "well, just pay for it," when a large number of people literally cannot -- or even if they could, could only pay for one or maybe two source of news (which, inevitably will default to some of the most well known players).

There's no doubt that there are all sorts of problems in the journalism world these days. Unfortunately, it doesn't feel like rushing to a paywall is a serious attempt to solve any of them.

Filed Under: advertising, journalism, paywalls, subscriptions

Competition In The Music Space Is Great: Fragmentation In The Music Space Is Dangerous

from the don't-screw-this-up dept

As you may have heard, Jay-Z bought himself a music streaming service, called Tidal, which is now being relaunched with lots of high profile musicians onboard -- in fact as partial equity owners:

The plan was unveiled on Monday at a brief but highly choreographed news conference in Manhattan, where Jay Z stood alongside more than a dozen musicians identified as Tidal’s owners. They included Rihanna, Kanye West, Madonna, Nicki Minaj, Jack White, Alicia Keys, the country singer Jason Aldean, the French dance duo Daft Punk (in signature robot costumes), members of Arcade Fire, and Beyonce, Jay Z’s wife.

So, we have all of these artists, taking on Dr. Dre and Trent Reznor who were the keys to Beats Music, which Apple is getting set to relaunch. Jay-Z is positioning Tidal as more friendly to artists -- though that was also the marketing claim behind Beats, and then it failed to attract too many users, in large part because there was no free, ad-supported tier. Of course, it's one thing if you're one of those megastars listed above, who get some equity stake in Tidal, but what about every other musician? Is it really going to be that good of a deal for them? Jay-Z and crew insist they'll be paying better rates than competitors, but considering competitors still can't get anywhere near profitability, it seems reasonable to question if Tidal can actually make any money at all. It's one thing to say you're going to pay artists more. It's another to defy basic economics.

Tidal also has no free, ad-supported tier, but does have a more expensive $20 tier for higher quality sound, which may attract random audiophiles, but not much more than that. Indeed, the recording industry (and many artists) have been pushing back against the free tiers that already exist. Universal Music has been demanding Spotify cut back on its free tier. And Universal's CEO Lucian Grange has been using every opportunity to complain about "freemium" music plans. Now owned by Apple, Beats wanted to offer service cheaper than the standard $10/month and the record labels said no.

And, of course, now Jay-Z is bashing free music tiers as well:

“The challenge is to get everyone to respect music again, to recognize its value,” said Jay Z, whose real name is Shawn Carter. “Water is free. Music is $6 but no one wants to pay for music. You should drink free water from the tap — it’s a beautiful thing. And if you want to hear the most beautiful song, then support the artist.”

That's kind of nonsensical in a variety of ways. Every time we've heard people talking about getting people to "respect music again" or "recognize its value," the projects have failed (often miserably), because they're not at all focused on what music fans actually want. Rather they're focused on trying to change the behavior of music fans and that's really, really, really difficult -- especially when you're not really offering that much that's different.

But Jay-Z has a plan to get around that: exclusive deals.

Over the weekend, the Swedish blog Breakit reported — citing sources close to the deal — that Tidal’s plan of attack will be to ink first-window deals with the artists, where Tidal would get first releases of tracks from big-name artists ahead of any other digital streaming services. This would be exclusive, but only for a period: Spotify, Deezer and others would eventually also get these tracks, but only later.

At least they'll go up on other services later, but this seems like a dangerous path to go down. Again, rather than focusing on providing more value the focus seems to be on taking away value from other services: ending free streaming deals and doing exclusives to fragment the market and make it harder for fans to actually listen to what they want, when they want it and how they want it.

That's the wrong lesson to get at this stage of the game. We've gone through nearly two decades of the recording industry fighting the internet at every turn, and now that we're finally starting to see some services that actually cater to what people want, the old industry players are jumping in and trying to kill the golden goose yet again. Any time any service shows that it can attract a lot of users, the recording industry tries to figure out a way to bleed it dry as quickly as possible, rather than helping it grow and building out more value for users.

More competition in the online music space is a great thing. But the trend towards locking stuff up, and taking away the value to music fans, while similarly jacking up the prices, doesn't seem like a productive path. It seems like one that is just going to annoy fans and push them back towards unauthorized alternatives.

Filed Under: copyright, exclusives, freemium, jay-z, lucian grange, music, music streaming, recording industry, subscriptions, tiers
Companies: apple, beats music, spotify, tidal

YouTube Once Again Building A Paywall On Which Old Media Can Hang Itself

from the haven't-we-done-this-before dept

People seem really good at forgetting history. While most people realize that Google bought YouTube early on in that company's existence, they tend to forget that this was, in part, because YouTube was beating the pants off of Google's own online service called Google Video. The big difference? Google Video's launch focused very much on selling videos and using annoying DRM that had to check in with a server any time you wanted to watch. It was a complete and total failure, which probably cost an even larger amount when you realize it made Google more desperate to buy YouTube.

A few years later, Google tried again, playing up the ability to pay for videos... and once again it flopped pitifully. A 10 day test brought in just a little bit over $10,000 -- which is hardly worth the effort involved.

Perhaps the third time's the charm? People are reporting that YouTube is getting ready to launch a paywall feature, which may have 50 "channels" locked up behind the wall. The idea is to be more of a Hulu or Netflix-type competitor, though rather than a flat fee for access to all locked up content, YouTube thinks people will pay $1.99/month per channel. That seems... pretty high. Perhaps they're hoping that times have changed and what failed in the past is now okay because people are accustomed to paying for this kind of thing. However, I still have trouble seeing how this succeeds. If anything, this just seems like a tool with which Hollywood can hang itself. It may jump on this thinking that it's a great new way to build an online revenue stream, without realizing all the potential hazards.

Cable and satellite channels, which traditionally rely on a dual revenue stream model, are eyeing YouTube’s subscription service to generate revenue from older shows and new programming, according to another person familiar with the project.

I'm sure plenty of old school execs are thrilled about this idea... until they see the actual numbers. This isn't about helping the old industry adapt, but giving them the tools to see how unlikely they are to succeed with a paywall.

Filed Under: overhype, paywall, subscriptions, videos, youtube
Companies: google