Is subscription the future model for eBook retail?

Let's quickly answer the question - yes it is. Now I'll explain why I believe this.

In both personal and professional environments, coming from online retail at Borders and now working in publishing, people always ask me what I think the future of ebooks is going to be like. It's a big question and most of the time, professionally at least, I think they are asking what I believe the future commercial models for ebooks will be like. My opinion has veered from one point to the next as I’m sure it has with most of you, but we could be building towards a stake in the ground moment. Maybe the fear eminating from publishers towards the library sector is actually a huge insight into what is going to drive the future of the eBook market. And maybe we can learn about the success of new ebooks models from the movie industry.

As other blogs have discussed, publishers apparently have much to fear from libraries. Why would you buy an eBook when you can perform an identical process with a library - potentially with less steps - and get it for free, even if the SUPA model applies and you have to wait a little? The paradox is that publisher’s instinct is to support libraries and thus literacy and reading. But in this case, dig a bit deeper and we could be sleeping with the enemy?

Consider the film industry. This is an industry, like music, that is slightly ahead of books in its own digital revolution but unlike music, the issues it faces are in fact much more similar to publishing and bookselling. Let’s look at the product. Movies - like books - take a reasonable amount of time to engage with and although you may re-watch a movie or re-read a book, for the most part, unless it becomes a favourite you’ll never go back. Music - unlike books and movies - takes less time to interact with, gets replayed over and over again, can be engaged with while walking or performing other tasks, has fewer delivery challenges (filesize / bandwidth etc) and format-wise is pretty much universal. And a large proportion of books - again like movies - are proving to be disposable items that people just don’t want cluttering up their lives (note – I love printed books and could name 100 examples of books I want to continue to possess but things are changing and I can easily kiss goodbye to those embarrassing Lee Child books or even TGWTDT).

Acknowledging some of the similarities, what can we learn from any success or any of the changing models that movies have adopted? For me a big part of eBooks future lies in subscription models and this is where the library debate erupts because it's essentially this but free.

Even when DVD was popular, people didn’t feel the need to own most of the films they watched and most people nowadays resent that stack of unwatched DVDs they have in their living rooms. Subscription-based DVD, although relatively short-lived as an industry, was really successful and arguably has extended the lifespan of the DVD and Blu Ray by a couple of years until the internet becomes the prevalent distribution method. People were (and in some cases still are) willing to pay a monthly subscription to access the content they wanted at decent quality, legally and were even ok with not always getting the item they really wanted (that means you Lovefilm).

So roll forward to the present day. Netflix is booming as is subscription TV. Amazon Prime are testing the water with unlimited access to selected books, music and movies, Skoobe.de has just gone live and where are we as publishers? Scared of a few dusty old libraries... Libraries aren't going to change the future but the model they work on - with the addition of a commercial element - could.

So what about ownership of ebooks? As long as people know they can always go back and get that book they loved, in terms of self-purchasing, many people will not feel that they need to own the file and most people, despite the claims, don’t even go back and read the books they love. Instead they recommend those books to friends and take equal pleasure in their friend’s reading experience affirming their love of that book. It’s as good as going back youself, right? So the subscription model is perfect for ebooks. The question is ROI. Will publishers and authors lose out?

Possibly not. People will still make one off purchases, I’m not for a second suggesting that people will not transact against single books in the future, although I think the transaction process will be extremely simplified. I’m also not about to do a complex financial model to prove the viability of this concept (hopefully Amazon, 24 Symbols and Skoobe have done this) but here are some ideas that could form the basis of a workable subscription model, that unlike Kindle lending, doesn't terrify most publishers.

  • Retailers agree to pay publishers a ‘lending rate’ per view, different to standard discount terms.
  • As Amazon is doing, allocate a proportion of the overall subscription revenue and apportion it on the basis of the selling price of the products and the amount of times they get loaned. Restrict the number of concurrent loans any user can have based on the subscription rate paid so that the people borrowing more books contribute more to the pot of revenue.
  • Reciprocal contra (seriously) - publishers can pay to invest in featuring titles (as normal) but retailers can also pay a higher rate of return on those titles – fortune favouring those publishers brave enough to invest in promotion. Publishers supporting retailers and vice versa.

And the benefits?

  • Less risk for the consumer choosing to test out a new author or genre (rather than buying what they know as is the current trend)
  • A steady increasable and renewable revenue stream from committed readers for publishers and retailers
  • Limitless pre-orders
  • Growth of WOM in ebook marketing
  • Opportunities for resourceful publishers to increase readerships and revenue by garnering audience and not necessarily forcing a sale
  • A more level playing field for retailers 

The list goes on. Of course there are negatives and this is by no means straightforward. The model needs to demonstrate that income isn’t cannibalised. But potentially for the book reader, the retailer, and the publisher, the rewards do exist and movies (and libraries) could be showing us the way… As a committed book reader, I'd subscribe. Would you?

Comments

Thanks for the feedback

NickAtkinson7's picture

As with my first post on questions about digital nobody is asking (btw - I didn't mean it literally), this post has generated loads of chatter, new LinkedIn connections and lots of great email exchanges with interesting people across the world. It seems like many of you share my enthusiasm for the subscription model where ebooks are concerned... Thanks for the great feedback and keep it coming.

It's playtime!

NickAtkinson7's picture

Its worth noting that the launch of Google Play could herald the introduction of not only another credible large scale ebook retailer but also it isn't hard to imagine that at some point a Prime style offer with unlimited access to their library of cloud-based content could become a reality. Watch this space.

It sounds like we're in

NickAtkinson7's picture

It sounds like we're in agreement. Delivering a lower barrier to new and emerging talent is a good thing. Itwould be really exciting if reading became more trend driven and dynamic - factors that rely on pace. The publishing process in print can be glacial at times and often the zeitgeist at the point of "responsive" commissioning has very much shifted by the point of release, so ebooks (via subscription) seems the perfect vehicle to ignite underground publishing, let passionate indies succeed and let WOM rule again. We've seen a shift towards people paying peanuts for single ebooks and downloading a lot of trash because it's cheap. That isn't good for anyone. Subscription models present a completely level playing field which you'd hope over time would allow quality to shine and the cream to rise to the top. Good luck with ExpressReads - not sure you've got a winning brand name there but I applaud your approach.

Subscription model for ebooks

The precedent for consumer demand for subscription access to digital content has been clearly demonstrated in film (Netflix and LoveFilm) and music (Spotify etc). Who among us who are committed readers wouldn’t answer with a resounding yes to the offer of such a service? At ExpressReads we have been championing the benefits of ebook subscription and rental for both consumers and publishers (and authors), believing that it will increase overall consumption of ereading by encouraging wide ranging sampling, with particular benefit to backlist, and thereby even potentially increased sales. Certainly my own consumption of music ,for example, has increased with Spotify, for both new untried artists and many older ones who I would not otherwise go back and purchase. And we have developed what we believe is a commercially sensible model for publishers, giving them attractive returns on every download. We certainly believe that it is only a matter of time before subscription becomes an established channel alongside and complementary to ebook sales.

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