#7 Microsoft wants to be the Netflix for Gaming. Why Nike is growing like a tech stock. Apple's product announcement is a SaaS pricing chart. Travel and consumer subscriptions become a megatrend.

October 1, 2020

Why this newsletter. Link

Archive of previous issues. Link

Manually curated by @luigimallardo

I wrote two new posts that I wanted to share.

SaaSification and not Subscription ->

Why the key of the winning businesses of the future is SaaSification and not Subscription. I listened the last earnings call of Nike a few days ago and they are starting to talk and act like a SaaS business. Starbucks has had a similar path in the last few years. With or without paid subscriptions the next 5-10 years are going to be the era of the SaaSification of all sort of industries. Link.

How VCs should deal with the fear of write-off ->

Venture Capital firms always invest in future "Cinderellas" but then they realize in most cases they may have chosen a "Stepsister", in 12-36 months after series A. What is the plan then? If the SaaS scaleup is not ready to accelerate revenue, why keep on making the same mistakes knowing that it most likely means to burn further value and kill the possibilities of regeneration? Link.

News on SaaSed-up companies 🗞

Microsoft announced the acquisition of ZeniMax Media for $7.5 billion, that will give it ownership of several best-selling franchises. Gamers’ long-awaited fantasy about a “Netflix for gaming” took a step closer to reality. The service has 15 million subscribers. “We are really seeing a pivot in the gaming industry from a device-centric industry to a player-centric industry”. Link.

News on SaaSing-up companies 📈

Growth over 70% since early 2019... A tech stock? No, it's Nike transitioning from a conventional consumer brand to becoming a brand that's built around memberships and digital technology. We are starting to see why they hired the new CEO from a SaaS company. Link.

Pret A Manger launched a subscription model in UK in fight for survival. The subscription model will also allow to gain valuable data and spending habit patterning from their consumers, as the programme is facilitated through the firms App. Link.

Apple One steals the show. Apple’s big 2020 product announcement looks like a SaaS pricing chart. Welcome to the world of cross-selling and up-selling through the use of strategic pricing and packaging! The biggest issue with Apple One, however, is that it’s aimed at the extras, and not the main event: the hardware. Why do I only get to subscribe to music, shows and games? Why can’t I just subscribe to Apple? Link.

Launching Subscriptions has become cool. Swiss brand On Running has launched this month the eco-friendly Cyclon sneaker subscription. Welcome to the era of Shoe-scritpion. Link.

Rising Stars

The Athletic, a subscription-based sports website that provides ad-free coverage, says it hits 1 million subscribers after surviving sports shutdown. While other media companies have seen advertising revenue dip 20% to 40% this year, Athletic founders credit their subscription-only business model with keeping the company afloat. Link.

Interesting reads 📖

Skift cited the subscription model as one of the megatrends to watch in travel this year. Several travel companies have added subscription products and services in recent years, reporting encouraging early results. But only a couple of companies, most prominently Inspirato and BeRightBack, have gone “all in” on subscriptions and held up better-than-expected during the pandemic. Link.

Consumer subscriptions. Research by Paysafe has found 27% of consumers expect to see their subscription payments to increase into the next year. This indicates a growing reliance on subscription services by consumers for news, nourishment, education and other services. These include consumers in the US (36%), Italy (25%), Canada (23%) and the UK (21%). All giving subscription providers further reason for optimism. Link to more data and insights.

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