From Bill Rosenblatt via Forbes blogs:
Subscription e-book services are currently in a “chicken and egg” period of initial growth. On the one hand, they are a totally new way of consuming books, just as subscription services were a totally new way of consuming music when they were first introduced in the early 2000s. On the other hand, the major trade publishers are not embracing the model as enthusiastically as the major record labels did, even though subscription music services are now firmly in the mainstream.
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Subscription music services came into being in the very early days of digital music. Two services, MusicNet and pressplay, launched in late 2001. Each had music from three of the five major record companies at the time (EMI licensed its material to both services). In the middle of the following year, the startup Listen.com was able to get music from all five majors for its Rhapsody service. In other words, it took less than a year for on-demand music services to attract all of the major record labels.
The story with subscription on-demand video services was quite different. Netflix started its online video service in 2007 with a small catalog of non-major-studio film titles; it took Netflix five years to get recent releases from major studios. Even now, Netflix (as well as Hulu and other similar services) is often criticized for the lack of depth in its catalog.
Subscription e-book services look to be shaping up more along the lines of Netflix than Rhapsody or Spotify.
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Oyster’s new Ebook Store offers e-books from all five major trade publishers as well as hundreds of smaller publishers. Why did Oyster add traditional retail to its subscription service? Is Oyster’s subscribership perhaps not growing as quickly as the company (or its investors, including Peter Thiel’sFounders Fund) would like? Is this a strategic “pivot”?
None of these companies publish subscriber figures, and indeed it’s too early to draw any long-term conclusions. It’s also important to take into consideration the fact that book publishers behave more like movie studios than like record labels when it comes to the practice of “windowing.” Major film studios don’t make movies available for home (through services like Netflix, on DVD or Blu-ray, etc.) use until months after their theatrical release. Record labels have no such policies (though some would like to). Trade book publishers do typically engage in a kind of windowing by publishing books in more expensive hardcover first and then, months later (if at all), in cheaper paperback. Therefore the notion of not making “frontlist” titles available via certain e-book services should come naturally to book publishers.
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But the question remains of whether consumers are interested in the “grazing” model of media consumption that all-you-can-eat on-demand services facilitate. It’s clear by now that a significant segment of the Internet population likes that model for music, despite the rising interest in music ownership on vinyl LPs.
Yet one set of data tells a story of different consumption patterns between music and e-books that could affect the way these services develop in the future. Subscription music services have been displacing digital downloads of music from services like Apple iTunes, as unit volume from the latter category has shifted into steep decline. But the same is not true for e-books.
Link to the rest at Forbes blogs