Finding a Market for Ebook Subscriptions
Or, Is Oyster Just a Gym Membership?
Often any discussions on ebooks and all the nitty-gritty hiccups that follow — like digital rights management — inevitably lead to an analogy between how the music or film industry tackles issues of copyright and illegal downloading. Unfortunately, when it comes to accessing information online, if you look hard enough, you’ll be able to find what you want for free. The fact is that we live in a society with the mentality of “free culture.”
Despite the prevailing thought that a discounted book boosts its sales by reaching a wider audience via “trending” status, research on online pricing finds that those sales decrease once the discount is over. So how can the ebook industry solve or abate these alternatives of illegal downloading and lower prices? If we look to film, one solution or “trend” is to offer subscription services like Netflix, but can this subscription model work for ebooks? Can subscription sites such as Oyster and Scribd rival the success of Netflix by offering easy accessibility (and suggested reads) to a wide choice of books for a low price? Perhaps this is enough to dissuade readers from the hassle of finding the free downloads. Jane Tappuni discusses the subscription model in relation to the consumer’s perspective and asks if there is even a market for this service.
While it’s clear that consumers quickly recuperate the yearly price of a Netflix subscription, Tappuni examines Oyster — their monthly rates and title selection — to gauge whether readers get their money’s worth for the all-you-can-read buffet. The average American falls under the category of “light reader,” consuming 1-5 books annually. “Medium readers” hover between 6-10 and “heavy readers” read a minimum of 11 books a year. Although these heavy readers account for 28% of the American population, not all of those 11+ books are read in electronic format. So even a heavy reader, the one who would benefit the most from available titles in an Oyster subscription, is on average only reading 20% of their books in eformat (20% of 11 books = 2.2 books). An annual Oyster subscription will rack up a bill of $119.88 ($9.99/month) as opposed to the cost of 2.2 ebooks — a max price of $30. Not many readers will recuperate their costs with an Oyster subscription.
(Of course, if all those 11 books were read online, the reader would break even on the subscription, but what about the available selection? This is a concern of a later post.)
Oyster does suggest that their services are most valuable to those heavy readers. Consider those voracious genre readers devouring their mystery, romance, and thriller paperbacks and already taking advantage of the accessibility of the eformat. This is a demographic which would benefit most from an Oyster subscription. But perhaps Oyster is targeting readers who would be willing to pay full price for content. Is this then a loss for someone along the publishing value chain? Eretailers, perhaps?
Some might subscribe with the intention of reading more — the gym membership rationale. And some might be encouraged to read more by the easy accessibility and wide range of the books. However, anyone who’s experienced Netflix’s delay in adding newer blockbusters will encounter the same problem with Oyster’s catalogue of primarily backlist titles (those over a year old). Unfortunately, those books with buzz that will tempt a light or nonreader are unavailable. Can Oyster offer people the books they really want?
In his discussion of predictions for the next decade of the book industry, Mike Shatzkin questions the endurance of “immersive long-form reading” and the book demand for this activity. Rather cynically, he believes that our shorter and shorter attention spans will make this activity extinct. Subscriptions like Netflix work because consuming video content takes significantly less time than reading a book (two hours versus upwards of a week). Alternatively, Shatzkin highlights a paradox: long-form reading, yes, is threatened by the acceleration of everyday life, but the existence of these busy lifestyles does on occasion encourage the escapism that one finds in long-form reading. He believes we will see the novel take on a different shape given “an increasing societal tendency toward short attention spans.”
Tappuni is optimistic about the ingenuity of publishers and content providers and their capability to hone the subscription model. One service, Audible, provides the consumer with access to a catalogue of audio books for a fee, a cost effective service given the high price of audio books. Tappuni notes that Byliner answers the consumer demand for shorter content forms. Instead of the massive selection and high subscription fee, Byliner offers readers a curated list of short form content: 3-5 articles for $0.99 weekly, recognizing the changes in reading patterns. Alternatively, the consumer can choose to upgrade to unlimited access for $5.99/month if they wish (a mere increase of $0.97).
Like Tappuni, I see the value in ebook subscription services in encouraging reading and perhaps even sales of their print versions. While 2014 has been touted as the year of the ebook subscription service, I think that by the end of the year we will see many changes take place in pricing and content management, and hopefully, these developments will provide a more sustainable and conducive environment for both authors and book publishers as they negotiate their respective relationship with readers.