The announcement that Entitle is folding and that Scribd will remove a sizable portion of its romance and erotic fiction titles has been heralded by some industry watchers as the beginning of the end of e-book subscriptions. Questions abound from publishers, authors, and agents: why didn’t Scribd offer a tiered program? Why not cap the number of books a reader could read, either overall or within a genre? Aren’t the incentives for publishers, authors, readers, and the subscription services entirely out of alignment, regardless of the payment model? Is Entitle just the first domino to fall? Who ever thought reading and gym memberships were analogous anyway?
At INscribe Digital, we believe there are many ways that e-book subscription services can thrive, with careful calibration of categories, target consumers, and pricing. We agree with the findings of the 2014 Book Industry Study Group (BISG) on subscription models in “Digital Books and the New Subscription Economy.” Journalist Porter Anderson’s interview with publishing industry consultant and former BISG board member Ted Hill in FutureBook highlighted several important issues: the opportunity for subscription services to target niche readers, the challenges of excluding some readers, the aggregation of media options, and the need to understand the marketplace.
As a digital publishing services company, our view is informed by the work of our sister division INgrooves, a successful digital music distributor based in the Bay Area that has survived more than a decade of change. The main lesson from the music side has been that the models for consumers and content owners will inevitably evolve. Of the dozen or so music subscription services that exist today, only a few have been around for a decade or more. Pandora launched in 2000, while Apple just launched its service last month. As early innovators have gone out of business, new services have taken their place. We think that will happen in the book industry.
At INscribe, we’re taking the long view. Publishers, authors, and agents should be testing market alternatives to learn more about evolving consumer preferences for access to content versus ownership. Because the patterns of use are so different, not every lesson from the music industry applies to publishing, but we believe that publishers and authors need to offer their content via a wide range of formats and devices to ensure a variety of revenue streams in an uncertain ecosystem.
In the publishing industry, which has generally focused on getting all new releases and full catalogues distributed to retailers, the new ability to offer a subset of a house’s list to consumers is creating opportunities. Services like Safari find success by allowing publishers to offer a portion of their lists with prices that meet the needs of a specific market. Library services, long thought to be risky for publisher revenues, are also now accepted as critical links in the discovery chain for readers. Publishers such as HarperCollins and Penguin have re-evaluated their library pricing for e-books and found success with new models.
For authors, it can also be an especially confusing landscape—particularly for those who rely on consistent earnings from retailers such as Kindle Unlimited. Like most of Amazon’s endeavors, KU is very consumer friendly. Because Amazon controls the amount it is willing to spend on author payouts, it doesn’t need to risk an unprofitable program. However, the recent changes to KU’s pool payouts have left some authors concerned about their individual earnings in the program. The issue of whether KU pays by the page or by the loan is less relevant than the risk posed by its floating revenue pool combined with its demand for exclusive distribution. Authors can determine which model works best for their businesses, but KU’s exclusivity and circumscribed pool significantly separates it from the more author-friendly revenue models based on payment for each read as though it were a sale, which Scribd and Oyster are trying.
Our guidance to our clients all along has been that they should explore and test the subscription market, and support services that make the most sense for their business models. By testing and learning, they can evolve with the services themselves.
Anne Kubek is the EVP/general manager of INscribe Digital, a publishing services company that focuses on distribution and marketing for publishers, authors, and agents.
