Apple’s Sneaky Plan To Snag Subscription Revenue; Cord Cutting On The Decline

The Poisoned Apple

Apple has been secretly buying app download ads on behalf of apps as a way to secure iOS subscription fees in perpetuity, according to a Forbes report. Google won’t delete the ads, though they’re placed without the knowledge or consent of the app developers, including Bumble, Tinder, HBO, Masterclass and Babbel, the language-learning app. Apple also never discloses that it’s behind the ad placements. Some developers may call it a good thing – free media and downloads. But Apple knows from its first-party App Store search and iOS usage data when someone is close to downloading an app or subscription. Some of those people would convert on the website, rather than the app – and that’s the developer’s preference, since it could collect the full subscription rather than ceding up to 30% to Apple. It’s likely many Safari users expected to be taken to the developer’s site only to be diverted to the App Store instead by Apple’s covert ads. Some users would no doubt assume the developer had an app-only subscription flow. It’s hard for Apple to profit directly from subscription and in-app revenue at 30%. But its campaigns have a different kind of ROI, since they cement dependence on Apple’s iOS as well as monthly commissions – potentially decades’ worth. The only charge Apple lost in its recent antitrust suit against Epic was the right for developers to refer in-app users to their site for alternate payment processing. The Forbes report is scant on details, but may mark a new low for Apple’s broken relationship with mobile developers. 

Not So Fast 

Everyone knows cord-cutting is accelerating … wait a sec [check notes]. Cord-cutting is slowing down? With most Q3 earnings reports done and dusted, it looks like the rate of cord-cutting was surprisingly slow last quarter, according to an investor’s note from Wells Fargo analyst Steven Cahall. Although total paid subs declined by just 105,000 in the third quarter – and Cahall predicts they’ll be down by 4.8% for the year – and streaming subs are increasing, the latter is not happening as fast as it had been or as fast as Wall Street was expecting, Broadcasting & Cable reports. Disney’s stock dropped last week on slower growth for its DTC services and Netflix exhibited minimal subscriber growth in the US and Canada. “Our net takeaway is that there’s less headroom for streaming services to grow than the potential decline in universe pay TV subs,” Cahall said. Guess linear lives another day.

The In-House Playbook

Albertsons, the grocery chain operator, is ditching longtime ad platform vendor Quotient as it takes more of its programmatic platform in-house, Insider reports. The wind-down will start in February. (Nobody wants to throw a wrench in the gears during the holiday shopping season.) The new group will be led by an old hand in the retail ad platform space: Kristi Argyilan, former head of Target’s programmatic media business, called Roundel, and most recently SVP of brand innovation at Bed Bath & Beyond. One priority for Argyilan out of the gate will be to hire product and sales teams, recruiting from the likes of media planning agencies or ad tech companies. Albertsons might also make a few acquisitions to fill out platform capabilities. Albertsons is following what’s become a well-trod trail for retail and grocery companies. We saw a similar vendor transition with Walmart and Triad – though Walmart does now have a strategic deal with The Trade Desk. 

But Wait, There’s More!   

Iceland – yes, the country – takes a swipe at Zuckerberg’s “Meta” announcement in tourism vid. [CNBC]

The clones continue: Reels adds text-to-speech and voice effects – like TikTok. [The Verge]

Speaking of, niche brands are finding success with niche communities on TikTok. [Digiday]

MoviePass co-founder Stacy Spikes plans to rebuild the beleaguered brand. [TechCrunch]

How will this AI critic – and new FTC hire – influence Biden’s policies? The clues are hiding in plain sight. [Protocol]

You’re Hired!

Dentsu names long-time exec Tim Andree as its first non-Japanese chairman. [MediaPost]

Katie Cerar joins mParticle as head of product strategy. [blog]

Aram Zucker-Scharff promoted to engineering lead for privacy and security compliance at WaPo. [tweet]

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