Can the ebook subscription model be applied worldwide?

Which player will become the Netflix or Spotify of the ebook world? This question is often raised in articles about publishing, particularly because of the titles offered by many companies that have based their business model on unlimited access to books, sometimes for a subscription fee. Publishers who are part of this service are then compensated on a pay-for-performance basis, whereby total subscription fees collected from readers are paid out on a prorated basis according to the number of pages viewed.

One example is Safari Books, whose subscription forms enable access to an ebook catalogue specializing primarily in technology titles. The company has posted steady growth since the service was launched in 2001. Its president, Andrew Savikas, recently gave a Webinar titled “Why the ebook subscription model may be right for your content”, which was part of the O’Reilly TOC series I attended.

A model that’s part of the current climate

Savikas believes that two phenomena have now made this model potentially viable for the publishing industry:
– the general public’s familiarity with e-reading, coupled with the growing number of digital devices available
– the public’s inclination to accept temporary access to content rather than make a straight acquisition (this concept is already popular for accessing music and movies).

Why does he believe that the subscription model can work to the publisher’s advantage?

– Readers’ concerns about content protection technology (DRM) are eliminated, since they access the content directly online in a protected environment—which also means that they can read the work on more than one device. The emphasis is on reading comfort and convenience.
– Publishers receive compensation every time a page in one of their books is viewed—on an aggregate basis, these page views often produce worthwhile returns. Readers will look at multiple pages in many books, since the cost is included in the subscription fee.
– This subscription model opens up new markets—such as libraries and government organizations—for publishers. These clients can then take out a subscription and thereby make major changes to the content they offer their users, while also controlling costs.

More views, increased revenues

Savikas went on to say that the subscription model also gives Safari Books’ publishers an opportunity to increase the revenues generated through their digital offerings. For one thing, the popularity of mobile devices (cell phones, tablets, etc.) has helped maintain the volume of page views throughout the week.

Users were previously only accessing content from their desktop computers on weekdays. They are now doing so on weekends as well, using their mobile devices, so publishers have “scored” two additional days’ worth of page views.

The site is also attracting more institutional subscribers whose users or members access titles more extensively.

Obviously, the subscription model is not necessarily suitable for all types of ebooks—novels and biographies are two categories that come to mind. Also, as pointed out by Jeremy Greenfield, Editorial Director at F+W, readers are not necessarily willing to pay for all titles on offer; in these cases, topic-based modular subscription models could be made available.

A model that could be applied worldwide?

This model would seem to be of interest to both readers and publishers. Extending it beyond the U.S., however, would probably be difficult, although some French companies such as Cyberlibris and Youboox have already launched ebook subscription offers.

In the U.S., publishers and authors sign contracts that set royalty payouts for the latter based on the price received for book sales, without necessarily considering the title’s suggested sales price. Under the Safari model, authors are compensated by publishers based on the revenues their books generate.

On the other hand, contracts that follow the European tradition—which encompasses Quebec, the U.K. and France—stipulate author compensation based on the suggested sales price for a complete work. The subscription model would therefore be harder to implement in these jurisdictions, since publishers must be sure to secure the requisite authorizations from the authors (i.e., the contracts they sign with their authors must allocate royalties based on the price received, rather than on the single copy price) before any titles are sent to various subscription services.

The future looks promising for the subscription or pay-for-performance model, although many players in the book trade will need to adapt further to market demands.

Also see Stéphane Labbé’s conclusions in this post on the ANEL blog (in French).

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