Ebook Subscriptions

SaaSing The Music Business

19 July 2015

From Hyperbot:

The music business is about to undergo another seismic shift. And Apple’s streaming service is the tsunami that will force the industry to rebuild. Again.

It was around 2005 when I joined Warner Bros. Records as their new head of technology. I was the 20-something-year-old kid who was supposed to have every answer about all things digital. I remember distinctly the first record I worked on. Not because the record was special to me personally (it wasn’t), but because that was when I began to understand how a “record” was viewed by the record labels and the industry.

Back in the day, two things drove music sales: the record itself and the story that publicists told about the record. There were no iTunes pre-sales or bundling the album with new Samsung phones. Everything depended on first-week sales and chart position, as well as how the record rose or fell during the second week. It was a totally anonymous process. Even the record store owners had no idea who was buying. It was a simple transaction reported to SoundScan.

. . . .

By the late 1990s, the music industry had created a pretty successful promotion and publicity machine. First-week sales were driven by meticulously choosing the best single from the record, getting spins on top radio shows, producing big budget videos for MTV, print and TV promotions, record reviews and interviews with the artists. All things served the commerce transaction funnel.

The results of that first week of sales, along with the radio airplay, helped tell the “story.” If the record charted to No. 1 with millions of sales, the news was used to bolster second-week sales, as well as support the second single on radio and MTV and help launch the tour. The story, the sale and the spins — this marketing dance worked over and over again.

When the iTunes Music Store started dominating digital retail sales, and digital started eating into the total retail picture, the record labels didn’t bother to change the process very much. They just got a level of analysis and quantification that they never had before (for Apple, primarily), as well as higher margins.

. . . .

Music industry professionals never thought about loyalty or customer churn, because the month-over-month cycle (or even year-over-year) was less important than release-over-release.

In fact, the record labels often anticipated that an artist would lose portions of their audience with every new release, in exchange for new fans, as people got older, audiences changed and pop culture evolved.

. . . .

While first-generation SaaS (software as a service) providers were taking hold in the enterprise, a few pioneering streaming music services were making their debut. As Napster fell victim to legal battles, Rhapsody emerged in 2001 as one of the first legal providers of subscription-based music. At that time, the record labels viewed Rhapsody and others subscription services as “just another” source of revenue to support physical retail sales.

When retail sales in Wal-Mart and Target were strong, streaming was a nice additive source of revenue. In the waning days of physical retail sales, iTunes and Amazon propped up the entire music business, and streaming continued to be a small additional source of revenue.

It appears now that the scaffolding is falling away for the digital music sales cycle.

The problem? The music industry is still organized to support the traditional retail and digital sales cycle. As subscription services become the dominant source of revenue for recorded music, the entire business will have to shift gears to survive.

It’s no longer about pre-sales and Week 1, it’s about nurturing an audience month-over-month to drive loyalty and increase returns on a streaming service platform. All of the promotion dollars and methods to support Week 1 have to be retooled for a longer cycle, up to 6 months in many cases.

Link to the rest at Hyperbot and thanks to Glinda for the tip.

Macmillan Doubles Ebook Offerings on Scribd and Oyster

10 July 2015

From Digital Book World:

In an expansion of the partnerships with the leading subscription ebook platforms it kicked off in January this year, Macmillan doubles its offerings on both Scribd and Oyster, adding roughly 1,000 titles apiece to the two platforms.

Both of those contributions cover popular back-list fiction and nonfiction ebooks, which Scribd says includes best-selling titles by Grace Paley, Hilary Mantel, John McPhee and others.

Macmillan has yet to make new releases available to subscribers of either service.

Children’s titles are also included in both of today’s expansions; Scribd says it’s gained more than 300. “While we’ve been more closely focused on other genres,” Scribd’s VP of Content Acquisition Andrew Weinstein tells Digital Book World, “we have been steadily growing the children’s catalog, and this Macmillan deal is one of the more prominent offerings we’ve added over the past year.”

Link to the rest at Digital Book World

Ebook Subscriptions Q & A

8 July 2015

From Joe Konrath:

Q: Joe, I hate Amazon, and I hate their new Kindle Unlimited terms.

Joe sez: Opt out. It’s voluntary.

Q: They’re an evil monopoly.

Joe sez: They’re neither. But if I felt that strongly about a company, I wouldn’t work with them.

Q: But they’re the only way to make money.

Joe sez: So, you hate the cow that gives you milk. I can’t help you there. Try the serenity prayer. You know, the strength to accept the things you cannot change.

Q: These new KU terms are unfair.

Joe sez: Who said life was supposed to be fair, fun, or easy?

Q: Amazon is ruining my career.

Joe sez: My author rank has gone from #977 to #433 since the new changes began. I’ve done no promo, released no new titles. I’m simply being read the same pace as before, yet it now counts for more.

Q: That’s not fair.

Joe sez: Can you point me to the blog post where I whined the old system–that paid a 10 page short story the same amount as a 400 page novel–was unfair?

Q: You never did that.

Joe sez: You can curse the darkness, or light a candle.

Q: But there is no change unless people complain.

Joe sez: I didn’t complain. And yet, here is change.

Link to the rest at JA Konrath and thanks to Stephen for the tip.

Here’s a link to Joe Konrath’s books

Have You Canceled Your Account at Scribd? You Might Want to Double Check That

3 July 2015

From Ink, Bits & Pixels:

With the news coming out earlier this week that Scribd was cutting back its romance catalog (including titles from Harlequin), I’m sure some Scribd subscribers are thinking about cancelling their subscription (or have already done so). And so I wanted to pass along a friendly warning about Scribd’s cancellation process.

Many companies have a relatively obvious process to cancel an online subscription. They may make you jump through hoops, beg you not to leave, but in the end I’ve rarely had trouble canceling a service.

Scribd, on the other hand, has set up their cancellation process so that it is easy to trick yourself into thinking that you’ve canceled your account before you’ve actually completed the process.

I had to find this out the hard way, and I’m hoping you can learn from my mistake.

Back in May I decided that I no longer needed my Scribd account, and I canceled the monthly payment – or so I thought. Much to my surprise, I discovered earlier this week that I was still subscribed to Scribd.

It turns out that, after navigating through 3 screens and after having told Scribd three times to cancel my subscription, I hadn’t actually canceled the account.

Link to the rest at Ink, Bits & Pixels and thanks to Russell for the tip.

Subscription Services for E-Books: Like Netflix, Like Spotify, or Not at All?

1 May 2015

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.

. . . .

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.

. . . .

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.

. . . .

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

Oyster, the Netflix of e-books, launching online store to take on Amazon

8 April 2015

From CNet:

Oyster, a subscription service for e-books that launched a year and a half ago, is expanding into online retail with an e-book store set to spar with Amazon’s.

Until Wednesday, Oyster only sold consumers a subscription book service for $9.95 a month. But with questions remaining over the popularity and viability of e-book lending services, Oyster is expanding into selling individual books, with hopes of attracting new customers to its service.

Oyster says its efforts come at an auspicious time. In the past year, book publishers have begun setting prices evenly across the e-book market. With similar pricing, customers will choose their store based on something else, like the look and feel of a service and its easy of use.

“You’ll have to compete on other things like discovery and design,” said Oyster CEO Eric Stromberg, who added that titles on his company’s store will often cost between $9.99 and $14.99 apiece, similar to Amazon, Apple and other digital book sellers.

. . . .

Unlike with music and television, Oyster’s e-book subscription model, which which was somewhat novel when it launched, has done little to supplant traditional book sales, mostly because binge-reading is harder to do. Binge-watching an entire season of Netflix’s political drama “House of Cards” in a single weekend, on the other hand, is much easier.

Yet Oyster did make early headway within the book industry by signing up three of the five biggest US publishers, amassing a library of more than 1 million titles. Yet even these publishers have chosen to wait as long as six months to release their newest titles on subscription services like Oyster. There’s another hitch: Oyster users can only access the service through an app for smartphones, tablets and computers — but not Amazon’s popular Kindle e-reader.

Link to the rest at CNet

Hachette chiefs dismiss subscription model

7 April 2015

From The Bookseller:

The c.e.o of Hachette UK and the chairman of Hachette Livre have both dismissed the e-book subscription model, calling it “absurd” and “cannibalising”.

In an interview in this week’s Bookseller magazine, Hachette UK c.e.o Tim Hely Hutchinson said: “People are always pitching new models to me, and the first thing I say is that the existing model works really well. I don’t believe in subscription. I don’t see how it would do anything other than cannibalise the business we already have.”

Meanwhile Arnaud Nourry, chairman and c.e.o of Hachette Livre, also condemned the model in an interview with French book trade magazine Livres Hebdo,  run in The Bookseller this week.

Nourry said the subscription model was a “flawed idea” even though it proliferated the music business. “Offering subscriptions at a monthly fee that is lower than the price of one book is absurd,” he said. “For the consumer, it makes no sense. People who read two or three books a month represent an infinitesimal minority. And there are bookshops. If I seem like a dinosaur, so be it. My colleagues at Penguin Random House say the same thing.”

. . . .

Hely Hutchinson acknowledged some publishers saw value in the model. “I know other people take a different view,” he said. “Within the limits of the law, I hope [HarperCollins UK c.e.o.] Charlie Redmayne will explain it to me, because I don’t get it.”

Link to the rest at The Bookseller

The man from Mofibo

1 April 2015

From FutureBook:

Oyster, Scribd and Amazon’s Kindle Unlimited may well be household names, but an earlier player in the e-book subscription market was Danish company Mofibo. Already established in Denmark and Sweden, and launching in the Netherlands this summer, Mofibo now has its sights set on the UK market.

The Copenhagen-based company is led by c.e.o. Morten Strunge, who could fairly be described as a prodigy. At 19, Strunge started mobile operator Onfone. He sold it five years later for £31m and in 2013, at the age of 26, he launched e-book subscription site Mofibo.

He is clear that—after Holland—the UK is the next target market for the company. ”We are not sure exactly when that will be. We are currently negotiating with publishers, but we will not launch until our catalogue is strong enough,” Strunge told The Bookseller.

Every nation’s market has its own characteristics, but one thing always reoccurs in negotiations with publishers: their fear—and conviction—that an e-book subscription service is cannibalistic by nature. The received wisdom is that it will take publishers’ best consumers, the heavy readers, and give very little in return.

But Strunge does not agree. The business model of Mofibo, built on Strunge’s experiences from his years with Onfone, takes into account that there will always be a group of clients who cost more than they give in return. “Three per cent of our clients account for 20% of our costs. That was also the case in Onfone’s business. There were mobile users who used their mobile subscriptions so much that they in fact represented a loss [to the business]. But they were outweighed by the mass of clients who did not use their plans as much.”

Link to the rest at FutureBook and thanks to Jan for the tip.

Amazon is Testing Bulk eBook Bundles in Japan

28 March 2015

From Ink, Bits & Pixels:

How would you like to have the option of buying an entire series with a single click?

If Amazon’s latest program catches on, you might. The retailer is now testing a new section of the Kindle Store in Japan called Kindle Buying Corner.

ITMedia reports that Amazon is selling bundles of single issue comic books. A total of 10 bundles are currently being offered. The bundles consist of 15 to 25 consecutive titles from a single series, and are being sold at a 10% to 15% discount. If a reader already owns one of the titles from the bundle, it is excluded from the sale to avoid duplicate purchases.

. . . .

In any case, this bundle offer is a good way for readers who buy the single issues to fill in the holes in their collection in a single purchase.

Link to the rest at Ink, Bits & Pixels

Bad News for Kindle Unlimited in France?

20 February 2015

From Publishing Perspectives:

On Thursday, France’s Minister of Culture, Fleur Pellerin, announced that Kindle Unlimited (KU) and other unlimited ebook subscription services are illegal in France because they violate the country’s fixed book price law.

France’s fixed price law, called the Lang Law, was established in 1981 and says that publishers decide on the retail price of their books. Retailers are allowed sell the book for a maximum discount of 5% off the publisher’s price.

This announcement was based on a report written by Laurence Engel, the “mediator of the book” (la Médiatrice du livre) in France. Engel was commissioned by Pellerin to determine the legality of KU and other services in January 2015, about a month after KU launched in France.

The report by Engel found that, in the case of Kindle Unlimited and other ebook subscription services, the book prices are set not by the publishers, but by the subscription service — therefore violating the Lang Law. Engel recommended that the affected companies — Kindle Unlimited, Youboox and YouScribe — be given three months to comply with French law.

. . . .

Nicolas Gary of ActuaLitté writes that Amazon appears to be in the process of hiring an editor and establishing a publishing house in France. Through this new publishing company, Amazon could buy rights and sell its own editions at its own price via a book club model.

Link to the rest at Publishing Perspectives

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