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TK's MORNING BUZZ: It's No Wonder a Growing Number of Home Entertainment Providers are Eyeing the Subscription Model as the Way to Go

19 Mar, 2001 By: Thomas K. Arnold

The increasingly splintered home entertainment industry has found a new object of affection that seems to transcend genres or formats: The subcription model.

NetFlix, the Bay Area-based DVD rental operation, is turning heads with its subscription model, in which consumers pay a monthly fee ($19.95) and get to watch as many DVDs as they want, and keep them for as long as they want, three at a time.

Blockbuster has installed a similar subscription model at some of its video stores.

Music industry thinkers trying to convert the file-swapping free-for-all on the Internet into a commercial enterprise are finding a subscription model, based on popular songs, artists and genres (in that order), would appeal to many consumers who currently download their music for free.

And now comes word that Electronic Arts, the No. 1 independent video game publisher, has rolled out a $4.99-a-month online sports game subscription. According to Reuters, "EA's play-for-pay gambit is one of many strategies being used by the video game industry to extract more revenue from the mass market."

I think all these players are onto something. With consumers facing more and more entertainment options, it's increasingly difficult to keep track of a la carte transactions. On a Friday, Dad picks up a movie for the kids on the way home from work and then calls the cable company to pipe a sports game into his home Sunday afternoon; the next day Mom brings the movie and picks up two video games for the kids to play during their Saturday sleepover. By Sunday night, everyone's pooped. They had a lot of fun, but everything had to be picked up, ordered and brought back.

It's no wonder, then, that a growing number of home entertainment providers are eyeing the subscription model as the way to go. It's worked quite well for everything from magazines to HBO, and you can bet you're going to see it creep into more and more areas of our lives as time goes on.

Comments? Contact TK directly at:TKArnold@aol.com

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