How Optus plans to extend SubHub features and apps
Finder's Optus SubHub interview reveals when new apps will launch, how Telstra's streaming TV services could work, new features and more.
On 18 August 2021, Optus SubHub was announced with the aim of beating subscription fatigue in Australia. The idea is to aggregate all your subscriptions into one place, with one bill, so you can manage exactly what your monthly spend is and which services to stick with or ditch. On top of that, it rewards customers with discounts and extended trials of services they don't already have.
It's in its infancy, but shows plenty of promise as Australia's subscription overload surges to over 5 per household.
Shortly after the launch announcement, I caught up with Clive Dickens, Optus vice president of TV, content and product development. He talked me through the future of the service and the roadmap for new features and app inclusions.
Optus SubHub Clive Dickens interview
Congratulations on the launch, I get the impression Optus is particularly proud that SubHub is an Australian invention.
Clive Dickens: Yes, absolutely. Look, the problem we're solving is a global problem. The subscription economy is growing very fast. People are getting subscription fatigue because they don't know what services they're paying for, what services they're using, and which ones to add next. So, this is a well-known global problem and we're particularly pleased that as an Australian invention we've been able to solve it first.
You say global problem, does that mean you have had conversations with other territories? Are overseas markets interested in your tech?
Clive Dickens: Yeah. So, Optus is a 100% owned part of Singtel. Singtel operates telcos all over Southeast Asia so if SubHub is successful, we're absolutely looking to take it into other markets inside the Singtel group. We're working with a technology provider called DoCoMo Digital that builds all the partner provisioning backend. They've built it in such a way that other telcos can take it back into other markets to scale it as a global solution.
It would seem like SubHub is a great way to bring new customers to Optus and earn you plenty of valuable data. Why gate it off to just current Optus customers?
Well, we have about 25 million Australians. Of those, we have about 10 million customers with Optus. So, I don't think gating it off to 10 million people is a particularly low bar. And obviously, in our business, it's really important that we have a differentiator at Optus. When people are searching for a telco they typically choose based on coverage, service and value. Is the coverage available where I live and work? In the event that I have problems with my product can I get someone to help me fix it? And how much does it cost?
They're the 3 big historical reasons that people choose a telco. And by adding services like the Optus Living Network, Optus Sport, and now Optus SubHub, these are incremental reasons around why people should come or stay with Optus. It's about making sure that we can drive lasting customer relationships. And obviously it's very, very easy for someone to become an Optus customer now. You can just download the My Optus app. You can buy yourself an eSIM and you get connected straight away. So, even in lockdown you can either have a second service from Optus or you can port your number over from other services that exist.
You spoke of upcoming features during the launch, which will help users integrate existing subscriptions. What's your timeline for those features releasing?
Clive Dickens: So, we have our launch partners and we're targeting getting new customers to those services. But as part of our coming soon list, partners will be onboarding existing and new subscribers. So that means that you'll be able to bring over your existing Netflix subscription, and over time, your existing Prime subscription. So, it's the middle of August now, and we expect to onboard most or all those services by the summer.
How aggressive are you being in getting new partners involved? Obviously, a few upcoming partners were announced today, but what's a successful number of partners for you by, say, the end of 2021?
Clive Dickens: We were doing a tally last night and we easily got to 50 services in the Australian market for customers to subscribe to. Now, 30 of those 50 are video subscriptions, and the average household has 5.5. So, we're only just starting with SubHub. I think we have 12 of them now or announced as coming soon, so we have a lot more to go.
As people subscribe to more services, this problem of subscription fatigue becomes bigger and bigger. And although the average household has between 5 and 6 today, we also say 17% of households have over 10 current services. And we think over half of Australian households will have over 10 current services in a few years' time.
So, as more services launch, more services will come into SubHub. More services into the SubHub means that we can help manage subscriptions easier and then users can bundle and save more. We can offer those discounts, which hopefully our customers can use to then subscribe to new services as they launch.
You don't have a target of say, getting 20 on board by the end of the year or anything like that?
Clive Dickens: I think all the partners we've referred to today we want to get done by the summer. There's a group of partners we're in the advanced stages of discussions with, that we didn't mention today, that we'll be updating the market on them soon. But there's no finite number. It's a bit like asking, before Google existed, how many websites were there? Before the app store existed, how many apps were there? The market, in the subscription market, isn't going to be defined by how many subscription services there are, it's about how easy is it to simplify them. What problem do they solve? What niche are they appealing to? And how much do they cost?
We also talked this morning about branching into additional pillars. So we've started with entertainment, reading and wellbeing, but we see other opportunities around digital content, educational subscriptions and gaming as well. So, there's a significant multi-year opportunity here as the subscription economy grows. And that subscription economy today is worth about $2 billion to the Australian economy, and according to PWC that's growing at 20% per annum. So, it'll be $4 billion within a few years.
Do you expect to get the Telstra aligned apps like BINGE and Kayo Sports integrated? But what would be the benefit to them to being a part of SubHub?
Clive Dickens: Look, we're talking to all subscription partners. Obviously, there are apps that are owned by competitors. So, the benefit is always around getting scale and getting access to the Optus customer base. But of course, we're working with the partners that we've announced today first.
Announced today in the press release was Discovery+ and a lot of our readers have wondered when it will come to Australia. Do you have an ETA on when that might land?
Clive Dickens: No, we don't have any update on that.
You're encouraging your users to service hop, which is very consumer focused, but potentially not great for the partners. How did you argue that feature with them?
Clive Dickens: I don't know how many subscription services you have, but you can obviously pause or stop your subscription right now. So, all we're actually doing is allowing you to do what you can do now, but we're making it easier for the customers to manage. It's never been difficult, it's just been difficult to do it all at one time in one place, and that's what we solve with SubHub.
Are the current partnerships, or the ones that you're actually going to have soon, annually renegotiated?
Clive Dickens: The contracts we have are multi-year relationships.
So, the current trial offers, which are really compelling, they're not going to disappear?
Clive Dickens: Obviously, we won't be able to afford to give away 12 months of Amazon Prime membership to every customer forever. That's an $84 benefit to new customers and it's a compelling offer. So, it really depends on how popular the service is as we have a certain commitment to the service. We've got quite a lot of customers that can benefit from that trial [before it ends]. But depending on the take up, those offers are in the market for the time being.
A lot of people want to connect to SubHub through their phone. Would there be a specific SubHub app or are you going to keep it in a browser?
Clive Dickens: There are 2 places to access SubHub; on the SubHub website as a part of optus.com.au or within the already very popular My Optus app. So, the My Optus app is the super app for all things from Optus. You can log service inquiries in there, or add on Optus Living Network features. You can sign up to Optus Sports, etc. And you can obviously put support tickets as well. So, from today, SubHub is already integrated into the My Optus app, and there'll be more advanced features available in the My Optus app over time.
Last question, is there one big fish service that if you land it, it'll be a major win? Like maybe an Adobe or someone like that?
Clive Dickens: Obviously Netflix is the market leader. So, to have Netflix confirmed as a coming soon partner and have its involvement in the briefings today was really important. But if you think about the opportunity, Netflix has already got a large number of Australian households. So, the real opportunity is in amazing new services that people haven't discovered. The recent launch last week of Paramount Plus, for example – that's a fantastic new service today that has a very small number of subscribers, but could have a very large one by the end of the year.
So, it's not about a single tent pole. We also announced today the integration of the Netflix of China, which is iQIY, and that's really important for Chinese Australians as well.
I understand your question around tent pole apps, but actually the way this is really going to work is finding niches or passion points. Take Calm, a meditation app. The big services like Amazon and Netflix are very important. New services like Paramount Plus are very exciting, but then actually the stuff that I think our customers will be very interested in will be in the services that they haven't heard of. During lockdown we're all looking for new things to learn, to do, to watch, and hopefully SubHub can be part of that. I just signed up for Kindle Unlimited through SubHub a few moments ago, for example.
A lot of people though will have workflow apps, like Adobe and Zero, which they'd love to see a saving on. Is that something that you guys are looking at?
Clive Dickens: So, this is very much focused at the moment on entertainment, reading and wellbeing. We haven't built it as a business-to-business tool or software-to-software tool, but there potentially could be future use cases for that. But at the moment, we're focusing on entertainment, wellbeing or reading. Great software services like Adobe are not currently in our plans.
With Amazon Prime, Netflix and Paramount Plus all expected to be integrated with Optus SubHub by the end of 2021, now could be a good time to compare these streaming apps with others on the market.