While speculation about the possible launch of an Amazon.com digital library often compares the rumored service to NetFlix, Hulu, or Pandora, it may be more accurate to compare it to Safari Books Online. Founded in 2001 as a joint venture between O’Reilly Media and Pearson, Safari Books Online is a subscription service offering online access to a library of technology and business titles.
While the site is focused on a niche—IT professionals and business information—Andrew Savikas, CEO of Safari Books Online, told PW he believes the “all you can eat” content-access model will work just as well in the general trade book marketplace, both for new content and older works. According to Savikas, since its launch Safari Books Online has become O’Reilly Media’s “second largest revenue channel” behind only, well, Amazon.
Safari Books Online offers subscription access—monthly ($28) and annual ($300) access limited to 10 titles/month; and monthly ($43) and annual ($473) unlimited access—to a library of more than 17,000 books and videos. It has more than 45,000 individual subscribers, 800 academic and public libraries (serving about 15 million students, professors, and patrons) and more than 2,000 corporate and government accounts.
In a phone interview, Savikas said that subscription online libraries have much to offer publishers as well as authors. He speculated that Amazon may have an option in its self-publishing contracts that will allow it to offer these titles through a subscription service. “Some people will always want to own content, but there’s a strong general trend toward subscription services,” Savikas said. While he acknowledged that “publishers are concerned about Amazon getting even more leverage in the marketplace,” Savikas said he knows that “a lot of publishers are eager to be involved.”
Savikas said the model offers “the opportunity for an ongoing relationship with the consumer rather than a one-off sale; it offers wide selection and encourages consumers to sample content they may not know about, much like Netflix.” And he emphasized that “we have not seen Safari impact regular book sales. There has been no cannibalization. It’s been profitable.”
Most important, at a time when shelf space is shrinking at bricks-and-mortar stores, Safari’s subscription model “gives older content a chance to be used—it’s the longtail concept. The newest content is the most popular, but half our usage is for content over two years old—and even titles 10 years old show significant use,” Savikas said. And because it’s an online model, “you can do interesting things: recommendations, categorization, and customize discovery in ways a physical bookstore can’t do,” he said. Advertising is another possible revenue stream, although Safari Books Online has not pursued that.
Under subscription models, authors are paid on usage and, depending on their contracts, most authors are paid a percentage of the publisher’s net revenue, Savikas said. While royalties from Safari were small at the beginning, he said payments have grown substantially as the subscriber base increased. Citing the longtail, Savikas said that authors will find that subscription models pay more over time. “Royalty revenue decays slower and after many years our authors still receive substantial revenue,” Savikas reported.
“We pioneered the model and any trade book service wouldn’t look exactly like us,” Savikas said, “but there’s a general trend toward this kind of access in music and movies, and I think we’ll see multiple players in the book space.”
