Should Publishers be Looking at Subscription Models for Ebooks?

After the crisis of digitization upended the music and movie industries, the internet has reached an uneasy truce between entertainment providers and consumers through the subscription model. Instead of paying a per-unit-price (which most customers don’t seem to think is “worth it” for a digital copy), companies like Netflix and Spotify charge a monthly fee for access to a wide range of content. This deal has satisfied consumers and drastically decreased the amount of illegal downloads, even though it comes with certain drawbacks: a lack of ownership over content and limited offline options, for example.  

Is this model adaptable for the ebook market? It has been attempted by a few companies: Amazon has an ebook subscription model called Kindle Unlimited, and Scribd, originally an open publishing platform, offers a subscription model for access to ebooks from major publishers, magazines and newspapers. Many other companies have sprouted up in response, but none have been nearly as successful – the Oyster ebook subscription platform, an original big player, was closed in autumn 2015. The overall unsuccessful attempts of using subscription models for ebooks is mainly due to a lack of cooperation from large publishers, who are unwilling to put their books on the platform. Kindle Unlimited claims to have over a million titles available, those are mostly from their own imprints or self-published authors. Scribd offers books from HarperCollins, Simon & Schuster, and Macmillan, but isn’t compatible with offline ebook readers. What is hindering these ebook subscription companies, and can it be resolved?

A big problem is the expectation of readers – buying a book in the traditional sense means to own an object that can be carried around and read at your discretion, which is an experience much harder to replicate than watching a movie at home. Ebooks haven’t followed this model very closely, often being sold to the customer as if there is an exchange of ownership but remaining contained within the libraries of certain software systems – a paid lending system, at best. Kindle libraries are notorious for this, at times becoming deleted by Amazon at the apparent whim of the company. Digital Resource Management (DRM) licenses can prevent purchasers from having their ebooks on different hardwares, interfering with the “read where you want” aspect of books that many hold dear. These problems become tenfold when you try to introduce a subscription service: you either become wedded to a particular ebook reader and shunned by publishers like Amazon, or you have to install strict no-downloading for offline reading rules like Scribd. So, when it comes down to it, readers don’t want to spend 10$ a month for a library that they can’t use, or one that is full of titles they won’t read.

Most of these problems, I believe, come from a misunderstanding of how and why readers purchase ebooks. Two paranoias dominate the ebook discussion: 1) publishers worrying that ebook sales with eat into their print sales and 2) being forced to sell through Amazon, who hold a monopoly on the ebook market. A 2015 study in the Logos Journal of World Publishing (Laura Dietz et al., 2015) made the argument that readers actually consider ebooks and print books as two different commodities. If readers are looking for permanence and transportability, they will simply buy the physical book – this is not something they expect with ebooks, and this separation leads readers to buy ebooks that they would not have bought in print form and vice versa, implying that the two markets don’t necessarily cannibalize each other. This data becomes intensified when we look closer at the breakdown of Amazon ebook sales – some analytics estimates that half of all Amazon ebooks sold are self-published or made by Amazon imprints, and one data analyst think that this trend will grow to 75%. Facing the fact of diminishing returns on Amazon ebook sales and reader consumption habits, maybe it’s time for publishers to change their tactics. Subscription services could be the new way.

In the ebook market, I would argue that subscription services simply can’t be done by a third party. Publishers are the only institutions that can make ebook subscription services both profitable and ideal for reader habits. Publishers could recoup the ebook money they’re hemmoraging to Amazon, and readers could finally own a digital book copy without any software system limitations.

The first thing publishers would have to do is turn their back on the per-unit-pricing that Amazon dominates, while also disengaging from the idea of unlimited subscription access that Netflix and Spotify represent. By setting up an ebook subscription service, publishers could evade the huge price chunk that Amazon cuts out from their sales, and keep all of those profits in-house. If publishers are worried about readers taking all their digital titles and running, they could set up an online-only system similar Scribd and then allow a few offline downloads per month (unlike Netflix’s content, books cannot be consumed in two hours, and I think you’d find most readers would be perfectly happy to be allowed 3-5 books per month at a set price). Like public libraries, publishers could set their author royalties around which books get “checked-out” of these subscription libraries. And, perhaps best of all, a publisher-run subscription service would create an intense market-bond between publisher and reader; in this age of monopolization, loyalty is becoming very lucrative.

This is only one suggested model of how a publisher-run ebook subscription service might function. Publishers desperately need to stop being on the defensive in the ebook market, deferring to the Amazon industry giant to take care of their access to ebook sales when one might argue that the entire selling-edge of ebooks is that they don’t require physical production and delivery – so why do they require a third-party bookseller. Even so, there is nothing stopping publishers from doing both: having a subscription service for loyal readers, and continuing to sell their ebooks on Amazon for those readers who aren’t ready to commit.

The digital market landscape will continue to beat down traditional publishers until they are willing to expand their operations and try new things. Until that happens, readers will default to Amazon, and publishers will be left to lament their losses.

Lauria Galbraith