From The Huffington Post:
The headline of David Streitfeld’s article in the New York Times on Dec. 24, 2013, nicely summarizes the latest high-tech scheme to hit the book business: “As New Services Track Habits, the E-Books Are Reading You.”
After reading what Streitfeld and others have to say about the business model of companies like Scribd, Oyster, and Entitle, it seems clear that these companies are making different pitches to different audiences. The pitch to readers is that they will be able read as many e-books as they want for a flat monthly fee, while the pitch to authors is that they’ll be able to see detailed analytics about those customers’ reading habits. Both of these pitches have big problems.
What do readers get?
These e-book subscription services offer readers access to whatever books that are listed on that particular service at any given moment. This is far less than all the books in print. There are several major publishers missing from each of these services, and even the publishers that are participating may hold back many important books. Customers may not be able to read what they want, because many of the books they’ve heard about will not be available. This is not made clear on the websites of these services. The reader may be paying for an all-you-can eat buffet, but the selection on the table is pretty limited.
Nor are prospective readers told that their reading habits will be extensively data-mined. This sharing of “reader-analytics” is the inducement for publishers to participate in the first place.
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These companies are apparently offering this data as a trade-off to publishers. Sign up your books, and we’ll give you data that shows how our readers react to them. What kind of data?
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But how about the writers? Do they get anything of value? Not really — they’re more likely to end up with problems.
Start with the money. Authors’ royalties are set by contract, but the payment per book is often drastically reduced when the publisher makes this type arrangement with a subscription service. What can the author expect? Not much. If, for example, the subscription service has 10,000 customers who each read 10 titles a month out of a database of 100,000 titles, then the average number of readers per month for each book is — one. If that reader is spending less than $10 per month to read those ten titles, then the amount of that fee that is allocated to each book is probably less than one dollar. When you divide that one dollar between the publisher, the subscription service, and the author, the amount the author gets is likely to be in the mid two-figures — and both of them are on the right-hand side of the decimal point.
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Well, maybe authors aren’t in this deal for the revenue. They’re really looking for information. But will they get it? Maybe yes; maybe no. The subscription service’s contract is normally with the publisher. Whether the publisher decides to share that information with the author is a matter of the publisher-author contract.
Link to the rest at The Huffington Post