Subscription e-book services have been a buzzworthy topic in recent years, but are they a good deal for authors and publishers? That was the topic of a standing room only panel, moderated by Smashwords founder Mark Coker who noted the promise of subscription models as well as the “legitimate challenges” they face—specifically, what he called the “Goldilocks principle,” ensuring that readers are getting enough value to continue subscribing; publishers are making enough money to justify their involvement; and, of course, the subscription service itself is financially viable.
The panelists represented the diversity of new services now emerging: Justo Hidalgo, from 24Symbols, which offers a Spanish-language service in Europe; Noelle Millholt, CEO of Speakaboos, a children’s service largely used by schools and educators; and Andrew Weinstein, v-p of content acquisition for Scribd, one of the most talked-about players in the field, with three of the big five publishers participating, offering readers more than a million e-book titles for $8.99 a month.
All of the panelists reported strong growth in their services, and offered some interesting numbers. Weinstein reported that that Scribd users access a number of titles, but average less than two qualified reads per month, for which they pay publishers their share of the full retail price, rather than a share of a revenue pool. And, 75% of the Scribd catalog has been accessed, he noted, with publishers able to view usage data.
Weinstein plugged the model as eliminating buyer’s remorse, as there is no buy button, enabling readers to browse until they find a book they want to read, at which point publishers get paid the same amount as they would from a retail sale. So why are publishers still reluctant to move ahead with more titles offered through subscription platforms—and what fears hold them back? Is the model sustainable?
“We’ve tried to eliminate the most common fear, which is that [publishers] will make less money,” Weinstein said, noting that the platform is a new channel for publishers that pays them the same as their other retail channels. “I think the fear is that it is too good to last forever,” he acknowledged, “but everything is too good to last forever. Ask publishers if they are being paid the same amount from their retailers as they were five years ago.”
Weinstein stressed that Scribd has invested in and built a new sales channel at a time when retail has flattened and become more concentrated. “It’s about a balance in the ecosystem, and I would argue that the ecosystem is way out of balance right now,” with a market leaning heavily toward one retailer with a lot of market concentration. “We’ve invested heavily in becoming a player to become meaningful to publishers for the long term.”