"Subscription has arrived in a really big way for media," noted Len Vlahos, BISG executive director, in his opening remarks to the 2014 Making Information Pay conference at BEA. And for those who question whether the subscription model is coming to the publishing business, Ted Hill, president of THA Consulting, had an answer: "It's here now."
In his opening talk, Hill shared some insights from a project he recently undertook for BISG on e-books and subscription; the report, "Digital Books and the New Subscription Economy: A BISG Research Study," publishes June 16. Among the highpoints: 80% of industry stakeholders agree that e-book subscription businesses are inevitable in the digital book environment; 84% see it having a positive impact on their business in the next five years; 86% of scholarly publishers are now working to get their e-books into aggregated collections; 65% of professional publishers are currently seeing subscription revenue; and 33% of textbook publishers say they see significant revenue from subscriptions, compared to only 7% of trade publishers.
For trade publishers, however, subscription services are catching on. The tricky part for publishers, of course, is figuring out the financial impact of offering subscription access, Hill acknowledged. "All publishers today know that their readers are getting some of their digital media through subscription platforms, and it is a channel they like," Hill said. "And if publishers want to reach those people they are going to have to provide a similar experience."
Nielsen's Jonathan Stolper provided information from the latest Nielsen research into what the growth of the music, TV, and other media services means for books. The rise of streaming services has had a number of impacts, he noted. For one, it has had a significant impact on reducing piracy—those who stream media are less likely to download content illegally, Stolper declared. And while households that stream other media spend slightly less on buying or renting content (CDs, DVDS, etc.), those using subscription services for books, which Nielsen has been measuring for about four to six months, are spending more—although, he cautioned, "it is early days."
In one of the most interesting findings, Stolper noted a familiar company dominating among those who have reported subscribing to a digital book service—Amazon. Of the 6,000-plus readers surveyed, 9% reported subscribing to a book service in the past six months, and Amazon, through its Prime offering and the Kindle Owners Lending Library, led the pack at 79%. "It's a little deceiving," Stolper said, "because we don't think of Amazon as a true subscription service," like Oyster or Safari. When Amazon was removed, and the same question asked again, the number of readers who said they had signed up for a subscription book service dropped from 9% to 5%.
"Again, it's early days," Stolper cautioned.
