Ebook Subscriptions

Why “Spotify For Books” May Not Be The Future Of Publishing. (Yet.)

29 January 2015

From The Economist:

“BEWARE of the person of one book,” said Thomas Aquinas, a medieval friar and author. The risk of encountering such unscholarly types is rarer in modern times. Digital devices can hold dozens of e-books, so people can carry around a whole shelf of reading material with them. Now a new crop of e-book subscription companies is offering bibliophiles the chance to consume as many books as they like, from a huge range of titles, for a flat fee of around $10 a month.

It is a bit like having a whole lending library in your pocket—but with no need to return the books. In America the main providers of e-book subscriptions include Amazon, Oyster and Scribd.

. . . .

The subscription model has already taken off in music and television, with providers such as Spotify and Netflix. Consumers have shown an increasing preference for such all-you-can-eat bundles, as opposed to buying each item separately. That worries book publishers and authors, who still make most of their money from sales of single copies. So far they have approached subscription services cautiously, holding back their newest and most popular titles from them.

. . . .

The record companies tolerate music-streaming services like Spotify, which pay them only modest fees, because the alternative is a continued rise in music piracy—on which they earn nothing at all. However, piracy of e-books is not such a problem: it is perfectly feasible for publishers to keep back some titles from subscription services and make money by selling individual copies of them.

Link to the rest at The Economist and thanks to Joshua for the tip.

An Oyster subscription now gets you the entire Harry Potter series

29 January 2015

From The Verge:

Ebook subscription service Oyster just increased its value in the witchcraft and wizardry community: the company has added the entire Harry Potter series to its library. The app, which offers users a buffet of books for a flat monthly fee, will add all seven Harry Potternovels, plus J.K. Rowling’s faux-nonfiction titles, Quidditch Through the Ages, Fantastic Beasts and Where to Find Them, and The Tales of Beedle the Bard to its catalog.

. . . .

Last year, Oyster co-founder Willem van Lancker told us the company’s goal was to foster “a deeper sense of community around books.” With Harry Potter, that work has already been done for Oyster — the franchise comes with its own built-in community.

Link to the rest at The Verge and thanks to Jan for the tip.

Nielsen Shows Kindle Unlimited Users Buy More Books

28 January 2015

From Ink, Bits & Pixels:

Late last month I asked whether consumers were buying fewer books after switching to subscription ebook services like Scribd, Oyster, or Kindle Unlimited, and according to the latest info from Neilsen Book the answer is No.

A few details from the latest edition of the Nielsen Books & Consumers Market Research crossed my desk today, and this report shows that the subscribers in the UK and the US spend more on average than non-subscribers.

The data I have shows that about 4% of book buyers have subscribed to one of the standalone ebook subscription services. Curiously, when you add in the Amazon Prime members that figure jumps to 10%. It also shows that subscribers are tend to be male (59%) while book buyers tended to be female.

. . . .

But no matter the age, the survey group was spending a lot of money on books. As a group, subscribers had a monthly budget of $58, while non-subscribers had a budget of $34. The survey also showed that subscription customers were willing to pay more for their subscription than the standard flat rate of $9 to $10. Men were willing to pay an average of $17, while women would pay $14.

. . . .

I don’t have all of the data, but one of my takeaways from what we do have is that publishers are right to be concerned about making their ebooks available through Oyster or Scribd.

In a trend which mirrors the rise of ebooks, the ebook subscriber base tends to be concentrated among the most profligate book buyers.  If more publishers signed up then those book buyers would have fewer reasons to buy outside of the service, and they could end up spending less money on books.

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

Amazon exec: Here’s why it pays to make your ebooks exclusive to us

15 January 2015

From Gigaom:

Amazon’s ebook subscription service, Kindle Unlimited, has attracted criticism recently, with some self-published authors complaining that the service devalues their work and chafing at the requirement that they make their ebooks exclusive to Amazon in order to participate.

But Russ Grandinetti, Amazon’s VP of Kindle Content, suggested at the Digital Book World conference in New York on Wednesday that the vast majority of authors participating are satisfied with Kindle Unlimited — and he said that the program is helping them achieve earnings that have doubled since the program’s launch in July.

Authors who want their books to appear in Kindle Unlimited have to enroll in KDP Select, a program that requires them to make their ebooks exclusive to Amazon for three-month periods. “Every month authors have renewed availability of titles on KDP Select in excess of 95 percent before and after the launch of Kindle Unlimited,” Grandinetti said — suggesting that they are satisfied with the program despite a few high-profile complainers.

Furthermore, in the six months since Kindle Unlimited launched, “à la carte sales of authors in KDP Select are growing faster than KDP at large and Kindle at large,” Grandinetti said. Combine that à la carte income with “the money that authors earn or have earned from the subscription service as well as the Kindle Owners’ Lending Library,” and “sales from August to December 2014 are more than double what they were in 2013.”

“I do think there will be ways that we tweak it over time,” Grandinetti said, but “overall the system’s pretty healthy. We’re incredibly motivated to make this work for that community. They only have to participate for three months.”

Link to the rest at Gigaom

Kindle Head Russ Grandinetti Offers the View from Amazon

15 January 2015

From Digital Book World:

Joining publishers at Digital Book World 2015 in New York City this morning, Kindle SVP Russ Grandinetti offered a frank explanation of Amazon’s perspective on the book business.

. . . .

  • The Hachette dispute: Disagreements between publishers and booksellers are nothing new, but Amazon’s battle with Hachette was unusually public. “Our goal is to keep it rare,” says Grandinetti.
  • Authors: “We treat authors the same way we treat buying customers,” and Amazon is “highly motivated” to make its publishing services work for them. The indie community, Grandinetti says, is “incredibly vibrant” and vocal. “They like CAPSlock a lot when they tell us what’s going on.” Amazon finds that KDP Select remains very popular, more than doubling authors’ earnings through the platform in August–December last year over the same period in 2013.
  • Kindle Unlimited: Amazon is working to address authors’ concerns that the subscription-based program is diminishing their revenue, asking for patience in the meantime. “It’s only been six months,” Grandinetti adds. On the subscription ebook model overall, Grandinetti says, “More approaches to publishing is pretty healthy” and reminds publishers they weren’t happy at first when bookstores began selling used books. “In every single digital media category, subscriptions are succeeding at some level,” and books won’t be an exception.

Link to the rest at Digital Book World and thanks to Jan for the tip.

Publishers Are Lining Up Behind ‘Netflix for Books’ Services. But Why?

14 January 2015

From Wired:

On Tuesday, startups Scribd and Oyster both announced partnerships with publishing heavyweight Macmillan to bring over a thousand new titles to their respective e-book subscription services. That means the two startups are now working with majority of the so-called Big Five publishers; both had previously offered books from HarperCollins and Simon & Schuster. The Macmillan partnership grows Scribd’s $8.99-a-month a la carte collection to more than 500,000 book titles, in addition to the 30,000 audiobooks available on the service after Scribd added them late last year. Meanwhile, Oyster says it now offers more than 1 million books to its subscribers for $9.95 a month.

. . . .

But while the addition of another publisher is an obvious win for the startups, what’s less clear is why publishers want in. Movie and TV studios can count on ticket sales and advertising dollars even as they offer their content on Netflix. Musicians can still sell concert tickets even if streaming services like Spotify cannibalize CD sales. But for book publishers and authors, the main source of revenue is still selling books. So why would they agree to participate in what amounts to an always-accessible lending library with an infinite number of copies?

. . . .

Scribd and Oyster say publishers do see revenue from making books available on their services—both startups pay publishers a sum of money each time what Weinstein calls “a fair portion” of a book is read. And apparently, people are reading. Scribd isn’t publicizing exactly how many users it has, but Weinstein says its service has seen 30 percent growth month over month. Oyster also doesn’t share its numbers publicly, but a representative says December was its biggest month ever.

The money may not be the real reason publishers are coming around, however. The greatest value of these “Netflix for books” services could be that these startups share valuable reader data, says James McQuivey, an analyst with Forrester Research. Subscription services in other media rarely share information with content producers themselves on how their content is being consumed, he says. “That’s the way [these e-book subscription services] differentiate themselves in the minds of publishers, and convince publishers to join them,” says McQuivey.

Scribd and Oyster confirmed that they do share aggregated information about users’ reading activity.

. . . .

McQuivey points out that in particular, readers of genre literature are valuable to publishers because they typically read dozens of books in a year. Publishers don’t necessarily want to lose this reader to subscription services. But if those readers do sign up, getting them to go with a subscription service that shares data can give publishers an edge: with good data at their disposal, publishers can focus their marketing efforts with more precision.

McQuivey thinks the timing behind publishers’ new willingness to cooperate may have to do with Amazon’s decision to launch its Kindle Unlimited service in the summer. “Publishers could be trying to make sure Amazon doesn’t grow to dominate the space,” he says.

Link to the rest at Wired and thanks to Meryl for the tip.

Kindle Unlimited and the ongoing commoditization of books

8 January 2015

From GigaOm:

If you know anyone who writes books, or if you follow any authors on social media, you’re probably used to regular cries of doom and gloom about the death of writing and how Amazon is killing the book as we know it. Some of this may even be true. But if anything, it’s the massive increase in writing of all kinds that is killing (or changing) the book industry, and Amazon is just one part of that phenomenon. Books — like so many other forms of media — are becoming a commodity.

Take Kindle Unlimited, for example, an Amazon feature that provides a kind of Spotify-for-books rental service, where users pay $9.99 per month and can borrow one of more than 700,000 books.

. . . .

The standard response to Kindle Unlimited, and most of Amazon’s other moves — including its repeated attempts to force publishers to reduce the prices of their e-books, occasionally through strong-arm tactics like its blockade of Hachette titles — is to complain that the company is devaluing the book, or book writing. And it is certainly playing a role in doing that, since it is the world’s largest online book retailer.

But Amazon isn’t the one devaluing books. In an economic sense, the internet is devaluing books, and almost every other kind of writing or media. Book writing and publishing used to be hard, and complicated, and time-consuming, and expensive — just like putting out a newspaper or magazine used to be, or distributing high-quality video. Now those things are trivially cheap. Virtually anyone can do them, and plenty of people are, in numbers far greater than we’ve seen at almost any point in human history.

But the vast majority of what’s being written or published or filmed or broadcast is crap, you will protest. And it probably is, by most people’s definition. But that doesn’t mean someone won’t want to see it, or read it, or rent it or maybe even buy it. And since there are oceans of similar content available for nothing, they aren’t going to pay as much as they used to for it — especially if it’s digital only.

So where does that leave authors? The same place it leaves everyone else in media: namely, trying to adapt to a marketplace where supply is almost unlimited, but demand has remained approximately the same. That’s not Amazon’s fault. If anything, I think it’s trying to help authors and publishers adapt — although it may not look that way.

Link to the rest at GigaOm and thanks to Dave for the tip.

For the Indie Writers of Amazon, It’s Publish or Perish

5 January 2015

From The New York Times Bits blog:

One big argument for “all you can eat” music, video and book services is that they encourage people to sample new artists and ultimately develop a deeper relationship with a few of them. You listen to songs you have never heard before because there is no additional cost, and then maybe you go to the concert and, perhaps, buy a T-shirt. Artists are rewarded at the end of the process, not in the beginning the way they used to be.

. . . .

Traditional book publishers have been reluctant to participate too much in reading-subscription services, for fear that individual books, their authors and the editors who shape them will be devalued. But self-published writers, also called independent or indie writers, many of whom have just begun their careers, see little to lose. They are trying to move up the food chain, while established writers have been trying not to move down it.

Indie writers, despite their name, must rely to a greater or lesser extent on Amazon, which felt it needed to start its own all-you-can-eat service, Kindle Unlimited, to remain competitive with start-ups like Oyster and Scribd. Kindle Unlimited opened in July.

. . . .

 The vast majority of Kindle Unlimited books are self-published. In essence, it is one of the biggest experiments in reshaping reading ever undertaken. Will Kindle Unlimited foster a new generation of readers, as Amazon hopes, or will it drown them in bad work? Will it put most indie authors on a treadmill of writing and promoting that only a few can hope to escape, which would resemble the bad old system of publishing? Or will it be a tool for liberation?

. . . .

In the old days, as artists became more popular, consuming their works got more expensive. You could hear a guy singing at the local bar for the price of a beer; when he became Bono or Kanye West, a ticket to see him would cost hundreds of dollars. Writers would begin writing cheap paperbacks and then graduate to pricier hardcovers as the acclaim built.

But Kindle Unlimited is pushing [author Kathryn] Le Veque in the opposite direction. She is getting more popular by becoming less expensive, which is making her more popular. She is the embodiment of Amazon’s argument that “lowering e-book prices will help — not hurt — the reading culture.”

. . . .

“I am able to drop prices and, by sheer volume of sales, increase my income,” she said. “Most authors can’t do that because most of them don’t have 50 novels for sale.”

When asked why people buy works they can borrow, she says: “Most readers like to read their favorite books over and over. I’m getting a crowd that not only borrows my book, but will then buy that same book to keep.” Also, she says, some of her books are not available in Kindle Unlimited, “so there are some they must buy in order to read.”

Link to the rest at The New York Times and thanks to Dotti for the tip.

Ebooks in 2015: Dull new world

2 January 2015

From GigaOm:

Ebooks are feeling a bit hungover heading into the new year. The 50 Shades of Grey exuberance of 2011 and 2012 feels long ago. The first seemingly viable ebook subscription services launched at the end of 2013 (Scribd, Oyster) and Amazon launched its own ebook subscription service, Kindle Unlimited, mid-2014.

The main difference between Kindle Unlimited and Scribd and Oyster — all of which cost around $10 a month — is that Kindle Unlimited has way fewer books that people have heard of. That’s because Scribd and Oyster have been able to attract big-5 publishers (HarperCollins, Simon & Schuster, likely soon Macmillan) that hope to shake Amazon’s dominance in the ebook market, so they see no reason to make their books available on Kindle Unlimited.

. . . .

Smashwords lets its authors distribute their books to Scribd and Oyster. Coker mentions Kindle Unlimited, too:

“Our broad distribution network helped authors and publishers diversify their exposure to an industry-wide slowdown in ebook retailing…Authors who fully distributed their titles with Smashwords were partially insulated from the dramatic sales drops many Amazon authors reported following the introduction of Kindle Unlimited.”

Coker obviously doesn’t mention the word “glut,” though it certainly could be a caption for the chart above. In 2015 we’ll have to see whether “glut” largely continues to be seen as a Kindle Unlimited problem. But if more people aren’t buying and reading more books, it will be a problem for most authors and for all ebook subscription services.

Link to the rest at GigaOm

Making Sense of Kindle Unlimited

2 January 2015

From author Jake Kerr:

One of the single most misunderstood developments in the publishing world is the various book subscription services: Oyster, Scribd, and, especially, Kindle Unlimited. This has led to widespread misinformation on everything from their economics to their impact on authors. Let’s take a look at the whole structure and see if we can provide a bit more clarity.

. . . .

For the user, a subscription only makes sense if they save money. There is simply no other reason to embrace a subscription model when direct sales still exist (as is the case for practically all these services).

. . . .

So if this is great for the consumer why would a business embrace this model? Well, the answer is that you are sacrificing profit on a small group to sell to a larger group, making more money in the process. If the average existing user saved 30% via the subscription model, if you increase your user base by 40% then you are making more money.

In short, the underlying assumption of the subscription model is that pent up demand is significantly constrained by pricing. Of course, you can just drop your price across the board, but that ignores an important point: Subscription models can live alongside direct retail models. So just lowering the price makes no sense, since you could conceivably sell at a higher margin to some of these people, having the best of both worlds.

This underlying concept of the subscription model is critical for authors: If you cannot gain a greater percentage of readers generating new revenue than the revenue you are losing in the price cut, then this is a bad deal.

. . . .

One of the things you hear in the publishing industry are horror stories about musicians making pennies from services like Spotify. This is used as a dire warning of what Kindle Unlimited can do. However, the music industry is different in a lot of ways. Hit songs get played by individual subscribers over and over and over again. Each play generates a small amount of money. If each play were paid the same as a sale, then subscription services would quickly go bankrupt. Music is also split between performance and song-writing royalties. If you think Amazon is screwing writers, think about what musicians get from airplay on terrestrial radio. You know how much that is? Zero. Each time you hear an Andy Summers riff from The Police on the radio, he gets nothing. Because broadcast radio doesn’t have a performance royalty. Sting, however, gets royalties, because he is the songwriter.

. . . .

Back to subscriptions, despite these differences, the actual core economics are the same. You have a set revenue number per subscriber, and people are drawn to “hits,” which will suck up the majority of the money. For Spotify, if the average listener listens to 100 songs a month for their $9.99 subscription fee, that means that each play will generate 10 cents. That 10 cents will also have to be split among the publisher and the performers. Now imagine that 90 of those plays are for “Blank Space” by Taylor Swift. That means that there is only a single dollar to be split by everyone else. Of course, if listeners actually listen to 1,000 songs a month, that’s a penny per play and most likely means more artists are getting paid (albeit less per play).

Link to the rest at Jake Kerr and thanks to Barb for the tip.

Here’s a link to Jake Kerr’s books

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