Home » Ebook Subscriptions, Non-US » Blloon subscription service on brink of closure

Blloon subscription service on brink of closure

31 October 2015

From The Bookseller:

Another e-book subscription service is teetering on the brink of collapse after finding the business model unsustainable.

Blloon, developed by the founders of e-reader Txtr, has stopped taking on new users and will make a decision as to whether to close for good today, its c.e.o Thomas Leliveld has told The Bookseller.

It follows the news from Oyster in the US last month that its service was to close in 2016, despite raising $17m in funding from Highland Capital Partners earlier in the year.

Blloon launched in October last year offering a raft of titles from notable independent publishers such as Bloomsbury, Profile, Faber Factory, Guardian Books, Allen & Unwin, Lonely Planet and more and had plans to roll out to the US and Germany, where its founders are based, after its UK launch.

. . . .

“The service can only continue if the three parties, the users, publishers and service providers are all happy, and the users wanted more books, from companies like Penguin Random House, in our service. A lot of publishers have an issue with the unlimited model, for good or bad reasons. I was just about to hit the button of some more investment but I couldn’t see this building in the mid to long term into a financially healthy business. Then Oyster shut down and these guys had significantly more investment that I did and I said ‘if they are having trouble, this is going to be a problem’.”

Link to the rest at The Bookseller

PG says one of the challenges tech startups face when trying to innovate in the book business is having to deal with publishers who are constitutionally anti-innovation.

The major reason Amazon has been able to make ebook lending and subscription work is that it partners with indie authors who aren’t afraid to join it in experiments and innovation.

Ebook Subscriptions, Non-US

33 Comments to “Blloon subscription service on brink of closure”

  1. Plus it can afford to run the service in the red while working out the bugs and waiting to make a profit.

  2. The major reason Amazon has been able to make ebook lending and subscription work is that it has near infinite money to throw at the problem and also can strongarm publishers into accepting the lowest rate possible.

    • LOL

      No, but some are choosing to participate on the same terms as authors.

    • How do they strongarm publishers into joining KU, and accepting Kindle Unlimited rates?

      • Maybe Zirconia was talking of indie publishers, who make the success of KU, as TPG rightly says.

      • By doing it better than any of the others want to bother with — which brings out the ADS of ‘strongarming’ rather than admitting to Amazon has found a better way, and one that seems to be working …

        • If Blloon could get away with paying $1.30 per 67,500 word novel that they loan out, I suspect that they’d be in much better shape financially.

          • If Blloon could offer the increased discoverability of KU they might get Indies (at least) on board.

            Life is all about trade-offs. KU offers lower payouts (for loans–those are not sales) in return for greater exposure that can result in higher net take home. Works well for some, not for others.
            Enough think it does that they sign up.

  3. What’s happening to the subscription services is also happening, albeit more slowly, to the other ebook retailers like Nook and Kobo.

    Amazon has a stranglehold on the ebook market, and I can’t see it going away anytime soon. The Kindle Unlimited subscription market is big and I believe Amazon can eventually make it profitable, possibly to the detriment of indies’ pocketbooks.

    Aaron
    http://indiepubclub.com

    • I’ve enjoyed having KU and even signed up for another year, prepaid–to get some discount savings.

      I never tried Oyster or Scribd, and while I have a few Kobo books, I almost never go to their site. Truly, with my various Kindles and Kindle apps on all my puters and phone, it’s just easier to stick with Amazon.

      I don’t see strongarming as a consumer. I see a service that’s low-priced, convenient, with large inventory. As a consumer, it works for me.

      • Yes. Amazon is a better value. Better for me as a consumer and better for me as a writer.
        At the moment.
        However, while I have to admit to that value, I truly wish there was a strong alternative to keep the ‘zon and its ambitions in check. We are right to be wary of the future.

    • One of the main issues is ranking, and getting your book on the Top 100 for its genre or sub-genre, preferably the Top 20.

      What if you can’t do that anymore unless your book is in KU?

      I look at the Top 20 and many books say “Kindle Unlimited” above them, not “Look Inside.”

      It’s the Look Inside books that are making authors the money, not the KU books. That first author is getting their full royalty and enough sales to stay in the Top 20.

      The KU author is getting enough borrows and sales to stay in the Top 20. They’re getting a mix of full royalty and who knows what for their pages read.

      I feel the KU author is making less money. Many times I see “better-known names” as the Look Inside author. That better name allows them to stay wide and still get that Amazon visibility. KU authors can’t do that, they have to use KU to get those pages read, to get that visibility.

      With two ranking factors now – sales and pages read – it’s harder to rank. If you don’t have that name, KU might be the only way you can get on your genre’s Top 100 or Top 20.

      That’s what I see now. What about a year from now when it’s worse, when more authors are in KU?

      It’s going to be very, very hard to rank and get any kind of sustained visibility.

      • “It’s going to be very, very hard to rank and get any kind of sustained visibility.”

        Is the same fear every writer has whether they self publish or try to get a publisher interested in their book — too many others, too easy to get lost in the crowds.

        This is an Amazon problem only in the way that Amazon seems to be the best way to be noticed/bought/read. KU2 is actually better for writers writing longer stories — but only if they can keep the reader reading, bore the reader and they drop that story and find one more to their liking.

        Maybe that’s some of the fear KU2 brings to those that don’t really think they can not only attract readers, but hold them.

        As for the rest of Amazon ebooks? It’s enough of a level playing field that the pig 5 had to try to game the system — and it’s biting them on the backside, as the indies are doing better every report.

        No, the pie isn’t getting smaller — or Amazon wouldn’t bother with it, but there are a lot more writers getting a piece of it — as always it’s adapt or die.

    • …I believe Amazon can eventually make it profitable, possibly to the detriment of indies’ pocketbooks.

      And possibly to the benefit of independent pocketbooks.

      • It will likely benefit some, those of us (like myself) who are attempting to create enormous backlists…but the only way anyone, including Amazon, makes subscription financially profitable in the future is to pay less per unit or page read or whichever payment scheme they end up with.

        So I’m not personally all that worried about it, but many should be.

        Aaron
        http://indiepubclub.com

  4. Long-time lurker here. The subscription services face a difficult problem. For a new/emerging author they offer the possibility of exposure. Even though the remuneration may be minimal, if it grows the fan base, it’s probably a net gain.

    For the established author with a solid fan-base, the additional exposure is less important than the risk of cannibalizing potential sales at giveaway prices. For the bestselling author, the market is less elastic and less price sensitive than most people realize.

    For example Brandon Sanderson fans are going to buy his book BECAUSE it’s by Brandon. Selling it for a penny won’t magically double his readership, and (within reason) most of those buyers aren’t particularly price sensitive. He has very little reason to place his newest creation with a subscription service.

    In my opinion, the subscription services will be unable to attract the big names, and that’s what the readers are asking for.

    Netflix is having the same problem in recent months — the studios are starting to look at any profits Netflix makes as a lost opportunity for them, and are holding back their most successful work. That means Netflix increasingly has C-grade flicks and TV shows to offer. Buffets don’t often serve filet mignon and Dom Perignon – they do casseroles and jello.

    • yup, you got it

      I have been watching for a long time as many appear to be drawn into any number of what some call, ‘derangement’ syndromes, including new authors, old authors, etc.

      The x factor in most every opine I’ve heard, is that no one, including loud voices and soft voices, has facts from Amazon. As a stockholder, I see more in their precis they send out, than I ever see in discussions on the internet. But even there, there is a full metal jacket opacity about the actual workings of AMZ, including shareholder investments, which is where a huge amount of amz money comes from– this rarely being mentioned in what I see as fragmentary guesses about amz assets and debits. The major facts are hinted at in annual reports, but cold hard insights on actual facts… I just dont see them in discussions about amz. But much much spec.

      I’d rather have all the facts for otherwise can only see a giant jigsaw with a pix on the box, and just a few of the puzzle pieces on the table put together so far.

      And I think many more can be parsed, but one would have to read the ultra tedious reports for stockholders, just as a start, and also all of amz federal compliance forms and applications, answers to law suits they’ve launched in at least 5 states, and more. Not even counting where all their reserve is banked and invested.

      There can be no full picture without oh, [opining here] about 95% more factual data. Not sure we even have 5% of solid fact re actual names, decisions, plans, fiscals, projected budgets, debits etc etc etc of amazon…

    • I just finished watching 4 seasons of Once Upon a Time on Netflix. I’ve watched some very excellent shows and foreign films there. But yeah, the newer films, not so many. But since I only have so many hours of reading or film-viewing in my week, and there are many streaming shows I enjoy (Japanese, Korean, Taiwanese, American, European), I think I can patiently wait until those hot flicks get to streaming. I’ve waited 2 and more years to rent a DVD of a movie that appealed to me. Very few films make me feel I must watch them now now now now now.

      I used to have the unlimited disc Netflix sub. Now, I do the 2x a month one, and mostly only rent one, I find. I just don’t have the time to watch all this stuff. So, if this fall’s hot flick isn’t available for my sub for a few years, I can wait.

    • I agree. Having had a sampling of Netflix due to my son’s subscription (it hasn’t been in Germany for that long) and have been underwhelmed by the choices. I don’t binge-or-otherwise-watch series because I don’t have enough time. And the film selection so far is less than stellar (not a single SF or Fantasy film that I hadn’t already seen that I wanted to see). Not to mention the extra cost of a fire stick or equivalent to alleviate streaming problems if I want to continue to use it.

      I had been considering signing up to KU for a year just to see what’s available and maybe curtail my reading budget, but I suspect it would not reduce what I spend on books but add to it.

      I’d rather pay indies directly when I find them and buy their books and if many of the trad books I read aren’t on there, then it just isn’t worth it to me to sign up.

    • Great points. And it’s good that some hold out, because we need balance in these industries so we can all continue to make money and not get it squeezed when there’s only 1 game in town and one format that all consumers are using.

      Luckily, that’s not happening–but subscription is both an opportunity and a challenge to our businesses.

      Aaron
      http://indiepubclub.com

  5. Book subscription models can only exist so long as someone is being screwed: either the author/publisher, the distributor, or the reader. You rarely increase profits by putting a middleman in the way.

    • I’m sure Amazon is willing to take one for the team if it brings in new customers. They lose a few bucks on books and gain it back selling flat screens, tuscan milk, 3 wolf tees, rock quarries…

      • Exactly. Amazon is using it as a loss-leader, whereas the dedicated subscription services don’t have any other way to make money to compensate for their losses.

        Plus Amazon is offering worse terms to indie authors than the other services were, so it’s not losing money as fast.

        • I do like it when ADS sufferers show up here.

          The problem with describing the terms as terrible is that many, many authors disagree with you.

          • I’m starting to wonder if it’s just ‘terrible’ as my dad used to use it.

            We’d be out eating somewhere and the wait staff member would come over and ask how the food was.

            If it was good, my dad’s reply was: “Terrible, just terrible. But since we don’t want you getting in trouble we’re eating the evidence as quick as we can!”

            If Amazon really was so ‘terrible’, I’d expect the ADS whiners to pull their books — its not like Amazon is forcing them into KU2, or to sell through Amazon at all …

          • Where did I say the terms were ‘terrible’?

            I can only assume you responded to the wrong post, since I quite clearly didn’t.

            • You’re right, you didn’t say that. My mistake, and I apologize.

              You said the terms are worse, which is factually incorrect.

              Skoobe pays worse, and the authors who can’t get into Scribd because their books are too popular are getting nothing.

              So no, Amazon’s terms are not worse than the competition.

    • You rarely increase profits by putting a middleman in the way.

      Amazon is a middleman. Many authors have made more money using that middleman than not. They are making more profit with the middleman in the way.

  6. It could be worse; take a look at the music subscription services. They are nearly totally dependent on the catalogs of the music publishers and they have to disburse 90+% of earnings (and give equity to the publishers in some cases).

    Netflix isn’t in much better shape, but at least has some very notable success with making their own content (which would be the equivalent of Amazon’s KU system).

    Subscription services that rely on traditional publishing sources of any type are in a very place where they can be squeezed at any time.

  7. Historically, (radio, napster, youtube, etc.) if you want to create a new media channel first you to start out by taking the content first, and *then* making a deal with the owners.

    Scribd had the right idea.

  8. Too many people in publishing are obsessed with making readers pay as much as possible instead of focusing on making as much net as possible for themselves. The two are not even remotely the same.

    It is quite common to see authors making less than $1 per sale on a tradpub novel even though the reader pays $9 for it. KU may pay less for a loan than a (full indie) sale but at least it generally pays better than mmpk or deep discount tradpub.

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