September 2014 saw the UK launch of Amazon’s Kindle Unlimited (KU), a high profile subscription service offering unlimited access to a library of more than 650,000 ebooks for £7.99 per month [Dredge, 2014]. KU was initially released in the US in July 2014 and followed the development of comparable ebook subscription services, most notably 24 Symbols, which was launched in Spain in 2011, followed by Scribd and Oyster both launched in the US in 2013 [Bertoni, 2013; Coker, 2013; Hidalgo, 2014; Reid, 2013]. Whilst the subscription model in consumer publishing is nothing new (think public libraries and book clubs), it’s being recycled for the consumer ebook market and certainly seems to be working. Scribd already have 80 million active users globally, whilst 24Symbols are planning to internationalise their service by expanding into 10 countries (including the UK) by the end of this year [Hidalgo, 2014; Shaffi, 2014].
One of the big concerns for publishers however, is whether subscription services will have a detrimental impact on book sales (especially ebooks), but with the current ‘net sales’ model in place [Bookseller, 2014], authors and publishers shouldn’t lose out. As it stands, the subscription providers pay publishers the wholesale ebook rate (as though the ebook has been sold) once over 10% of a title is read [Bookseller, 2014]. Therefore, the more subscribers read, the less money providers make, as a greater proportion of income is paid to publishers and authors, but Scribd founder Trip Adler [cited by Anderson, 2014] has said that their model remains profitable because ‘binge readers’ make up a very small percentage of their market, with the average user reading less than one book per month.
Problems could arise if these subscription services become mainstream, particularly if one or two services becomes dominant market players. In this case, if publishers aren’t involved sales of their books could fall without being offset by ebook subscription fees, but if they are involved, dominant subscription providers could build greater customer bases and enough leverage to negotiate new licensing terms that don’t see publishers and authors making such favourable returns. It’s a tricky tightrope and once again involves publishers relying on intermediaries to reach their consumers, rather than establishing direct contact.
However, despite these concerns, subscription services could be a valuable additional revenue stream for publishers, who could limit their involvement to backlist titles so that their frontlist print and ebook markets remain buoyant. By allowing subscribers unlimited access to a huge library of backlist titles, subscription could aid the discovery of new books, authors and series by encouraging users to engage with titles they may not otherwise have purchased. This could help publishers reach new markets and customers and potentially boost sales of new releases.
Music and film subscription services such as Spotify and Netflix are already mainstream and the fact that Amazon have been so quick to react to emerging competition by trying to establish an early stake in the ebook subscription market, is perhaps an indication as to the prevalence with which consumer ebook subscription services are expected to take hold. It remains to be seen however whether the model will remain commercially viable for providers, whether it will actually become mainstream and whether it will in fact cannibalise the book market. Watch this space!
Word count: 544
References:
Anderson, P. (2014). #FutureChat: Can subscriptions pay off for all types of books?. The Bookseller. [online]. 25/07/2014. Available at: http://www.thebookseller.com/futurebook/futurechat-can-subscriptions-pay-all-kinds-books [accessed: 19/10/2014].
Bertoni, S. (2013). Oyster Launches Netflix For Books. Forbes. [online]. 05/09/2013. Available at: http://www.forbes.com/sites/stevenbertoni/2013/09/05/oyster-launches-netflix-for-books/ [accessed: 19/10/2014].
The Bookseller. (2014). Subscription rise prompts contract questions. The Bookseller. [online]. 25/07/2014. Available at: http://www.thebookseller.com/news/subscription-rise-prompts-contract-questions [accessed: 19/10/2014].
Coker, M. (2013). Examining the Business Model of Ebook Subscription Services. Smashwords. [online]. 29/10/2013. Available at: http://blog.smashwords.com/2013/10/examining-business-model-of-ebook.html [accessed: 19/10/2-14].
Dredge, S. (2014). Amazon launches Kindle Unlimited – a Netflix-for-books – in the UK. The Bookseller. [online]. 24/09/2014. Available at: http://www.theguardian.com/technology/2014/sep/24/amazon-kindle-unlimited-ebooks-uk?commentpage=1 [accessed: 19/10/2014].
Hidalgo, J. (2014). Publishers must make a decision over subscription services. The Bookseller. [online]. 29/07/2014. Available at: http://www.thebookseller.com/futurebook/publishers-must-make-decision-over-subscription-services [accessed: 19/10/2014].
Markou, H. (2014). Business Models & Digital Publishing. [Lecture to BA Publishing Media, Year 2]. U65025: Publishing in the digital age. Oxford Brookes University. 14/10/2014.
Reid, C. (2013). Scribd Launches E-book Subscription Service. Publishers Weekly. [online]. 01/10/2013. Available at: http://www.publishersweekly.com/pw/by-topic/digital/devices/article/59324-scribd-launches-e-book-subscription-service.html [accessed: 19/10/2014].
Shaffi, S. (2014).Harlequin makes 15,000 titles available on Scribd. The Bookseller. [online]. 03/10/2014.Available at: http://www.thebookseller.com/news/harlequin-makes-15000-titles-available-scribd [accessed:19/10/2014].
One of the big concerns for publishers however, is whether subscription services will have a detrimental impact on book sales (especially ebooks), but with the current ‘net sales’ model in place [Bookseller, 2014], authors and publishers shouldn’t lose out. As it stands, the subscription providers pay publishers the wholesale ebook rate (as though the ebook has been sold) once over 10% of a title is read [Bookseller, 2014]. Therefore, the more subscribers read, the less money providers make, as a greater proportion of income is paid to publishers and authors, but Scribd founder Trip Adler [cited by Anderson, 2014] has said that their model remains profitable because ‘binge readers’ make up a very small percentage of their market, with the average user reading less than one book per month.
Problems could arise if these subscription services become mainstream, particularly if one or two services becomes dominant market players. In this case, if publishers aren’t involved sales of their books could fall without being offset by ebook subscription fees, but if they are involved, dominant subscription providers could build greater customer bases and enough leverage to negotiate new licensing terms that don’t see publishers and authors making such favourable returns. It’s a tricky tightrope and once again involves publishers relying on intermediaries to reach their consumers, rather than establishing direct contact.
However, despite these concerns, subscription services could be a valuable additional revenue stream for publishers, who could limit their involvement to backlist titles so that their frontlist print and ebook markets remain buoyant. By allowing subscribers unlimited access to a huge library of backlist titles, subscription could aid the discovery of new books, authors and series by encouraging users to engage with titles they may not otherwise have purchased. This could help publishers reach new markets and customers and potentially boost sales of new releases.
Music and film subscription services such as Spotify and Netflix are already mainstream and the fact that Amazon have been so quick to react to emerging competition by trying to establish an early stake in the ebook subscription market, is perhaps an indication as to the prevalence with which consumer ebook subscription services are expected to take hold. It remains to be seen however whether the model will remain commercially viable for providers, whether it will actually become mainstream and whether it will in fact cannibalise the book market. Watch this space!
Word count: 544
References:
Anderson, P. (2014). #FutureChat: Can subscriptions pay off for all types of books?. The Bookseller. [online]. 25/07/2014. Available at: http://www.thebookseller.com/futurebook/futurechat-can-subscriptions-pay-all-kinds-books [accessed: 19/10/2014].
Bertoni, S. (2013). Oyster Launches Netflix For Books. Forbes. [online]. 05/09/2013. Available at: http://www.forbes.com/sites/stevenbertoni/2013/09/05/oyster-launches-netflix-for-books/ [accessed: 19/10/2014].
The Bookseller. (2014). Subscription rise prompts contract questions. The Bookseller. [online]. 25/07/2014. Available at: http://www.thebookseller.com/news/subscription-rise-prompts-contract-questions [accessed: 19/10/2014].
Coker, M. (2013). Examining the Business Model of Ebook Subscription Services. Smashwords. [online]. 29/10/2013. Available at: http://blog.smashwords.com/2013/10/examining-business-model-of-ebook.html [accessed: 19/10/2-14].
Dredge, S. (2014). Amazon launches Kindle Unlimited – a Netflix-for-books – in the UK. The Bookseller. [online]. 24/09/2014. Available at: http://www.theguardian.com/technology/2014/sep/24/amazon-kindle-unlimited-ebooks-uk?commentpage=1 [accessed: 19/10/2014].
Hidalgo, J. (2014). Publishers must make a decision over subscription services. The Bookseller. [online]. 29/07/2014. Available at: http://www.thebookseller.com/futurebook/publishers-must-make-decision-over-subscription-services [accessed: 19/10/2014].
Markou, H. (2014). Business Models & Digital Publishing. [Lecture to BA Publishing Media, Year 2]. U65025: Publishing in the digital age. Oxford Brookes University. 14/10/2014.
Reid, C. (2013). Scribd Launches E-book Subscription Service. Publishers Weekly. [online]. 01/10/2013. Available at: http://www.publishersweekly.com/pw/by-topic/digital/devices/article/59324-scribd-launches-e-book-subscription-service.html [accessed: 19/10/2014].
Shaffi, S. (2014).Harlequin makes 15,000 titles available on Scribd. The Bookseller. [online]. 03/10/2014.Available at: http://www.thebookseller.com/news/harlequin-makes-15000-titles-available-scribd [accessed:19/10/2014].