John F. Baker -- 11/13/00
Subrights.com, the online rights-trading operation that was activated at the London Book Fair this spring (News, Mar. 13), is shutting down, with its executives explaining that most publishers and agents are "not ready to solve their subsidiary rights problems in a way that will create a sustainable, real-world business" for those offering an online trading option.
CEO J l Fishman told PW that "customer acquisition costs were enormous in relation to the potential for revenue, and getting to critical mass was just going to take too long." Sales and marketing manager Jacqueline LeDonne added, "We can't wait for the publishing world to catch up to history. We had a brilliant service, but not enough people were using it or paying for what they did use. You can't just bleed and bleed."
In a joint statement, the two said that although they were convinced that online rights trading could benefit the "cumbersome and laborious process" in use at present, the question was whether these changes could be executed in the context of a sustainable business model. "Recently, our investors and we came to the conclusion that this cannot be done any time soon." They added, "We know that our competitors will keep trying in this market, and may even succeed by their own measures."
Kip Parent, CEO of rightscenter.com, the largest of the small group of online rights-trading companies, told PW: "I think the people at Subrights selected the wrong model. Publishers and agents never wanted a system for buying and selling rights in eBay fashion. Our system is set up as an application, where customers can do business with each other as they wish. Our business is accelerating, and I remain very excited about the online future."
Fishman and LeDonne noted that their agreement to acquire the Paul Marsh agency in London, which worked closely with Subrights, was never consummated, and that their decision to close down would not affect the agency or its clients.
They offered to make their software, which "created the most cutting-edge Internet rights site in the book business," available to anyone wishing to license it. They said that altogether nearly 500 buyers and sellers had registered to use the site.
Volume 246 Issue 46 11/13/2000