Ebook Subscription Models, Revisited.
About two weeks ago, I wrote a little bit about the cloud-based ebook reading startup 24symbols. In case you missed it, the short version is that I’m skeptical of any sort of unlimited subscription model for ebooks in the United States, mainly due to problems with the ebook lending model in libraries. As HarperCollins CEO Brian Murray eloquently said in an interview on Digital Book World,
“As this business transitions from physical to digital, it’s forcing us to think about different business models and try to make sure that all of those stakeholders have a role to play in the future. So when we were looking at the library channel, the idea of having almost a subscription model is actually a unique business model. Right now, it is the only channel where we have offered this kind of business model.”
Because of that problem, I remain unsure how many US publishers are going to jump on an all-access ebook service for even backlist titles soon. But what if they did? Could that benefit publisher, startup, and reader at the same time?
Well, today I got a call from the founder of 24symbols, Justo Hidalgo. He’d read the post and wanted to talk briefly about their service and what they’re offering to readers and publishers. (side note: Justo is lovely and any publisher would be lucky to have the time to sit down with him.) As part of the discussion, he showed me some of the data backend they share with publishers, and I realized that an ebook subscription model could work in the US, but for a few unique reasons. So here’s three ways that I think an ebook model could work out in favor of reader, publisher, and startup:
- Actual reading data. I won’t mince words here: this one is the holy grail of direct to consumer. In conversations with other folks in publishing, I’ve reiterated over and over again that the skills you have in marketing are not the same as the ones you use in ecommerce. Just because you can create awareness doesn’t mean you know how to make a sale to an online consumer. (another side note: I honestly think that publishers should be acquiring those skills. F+W Media rocks at it. The eMedia team impresses me daily.)
But what if you skipped the point of sale and had a way to watch what consumers did when they are actually reading? How many pages they access, which sections they jump to, which books they put down and which books they finish in a 12 hour fit of book-induced insomnia? That kind of data can flip your acquisition model on its head. 24symbols seems to offer some of that data, on a limited basis. I think a subscription model that shares that kind of user data (in an anonymous fashion of course: publishers would probably want to know things like pages read, general demographics like men age 25-45, etc., but not your name and address. You know, the same information Facebook collects on you, but way less invasive and shady.) could become a broad based focus group for any trade publisher.
For narrative, I don’t know how much reader data changes things – if you have a book in the market and you know that people are ravenously reading it all at once, I imagine this data will only tell you that you’re in for a reprint in 3 months as word of mouth picks up. Also, it tells you that you need to resign that author.
But for non-linear non-fiction, it could lead to broad repurposing of content and new book products. Imagine if Wiley offered up an older For Dummies book on home repair that has trailed in sales and finds that a substantial number of readers are accessing that title for information contained in only two or three chapters, say How to Fix Drywall. Wiley could take those few chapters, put in a new introduction, and release a Kindle Single called Fixing Drywall for Very Busy Dummies as a $1.99 ebook through the major retailers. Or imagine if a publisher like Crown sees a spike in interest in The Future for Investors, a book about investing in world markets, because of an event not yet on their radar. They can let their publicity team know that other business books that concern the same subject might have a new marketing hook. Now, you might think, why wouldn’t a crack marketing team not have all of those interest spikes on their radar already? It’s possible they don’t yet know the market in which they’re books are resonating. Which leads me to my next point…
- Freemium models can grant access to international markets not on a publisher’s radar. This is a point that plays particularly well for 24symbols, who are based in Madrid and are in talks with several publishers in Spain. Up until now, US trade publishers have trusted have trusted publishers with boots on the ground by selling off territorial rights to those who actually know how to sell in their markets. But with some basic geographic data on your side, which comes from the data a freemium reading service with international users provides, you can better assess which books need fresh attention. An export manager in the foreign rights department might take a look at the data and decide that a line of business books on how to start a new career is experiencing a surge in interest in Greece and make a pitch to their contacts there to sell translation rights. An international audience browsing through a good back-catalogue of ebooks can yield very interesting data, but the very fact that consumers are accessing your backlist leads me to my last point, which is…
- A cloud based ebook service can lead to serendipitous discovery of ebooks through better backlist browsing. It’s no secret that publishers are grappling with a discoverability problem online. Some folks have hinted (I hope incorrectly) that we’re heading towards a post-brick-and-mortar retail environment. While that’s fine for many readers, it’s terrible for discovery beyond your usual cohort, as assigned by Amazon’s People Who Bought Also Bought algorithms. If the discovery of new ebooks is close to frictionless through a subscription service, they might be led to purchase books they never would have found through the major retailers. 24symbols and OverDrive are working to add more buy buttons throughout their respective services and publishers should take note. In addition to purchase, through this new browsing environment, publishers might be able to glean new information about connections between reader types. Do literary fiction readers also read a lot of narrative non-fiction? In my personal experience, yes, but anecdata doesn’t help anyone. Hard data helps. Or, 24symbols could take that a step further and allow readers to add their own tags, which, if shared with a publisher, could improve their ebook metadata. Take a look at GoodReads or Amazon for evidence that ebook readers are willing to add to a book’s metadata – publishers should harness that. As I mentioned today in an update to a previous post, having that metadata can assist you in the way you do display marketing as well.
So why would readers jump on to this freemium model? As Guy Gonzalez
has said, if an online product is free, you’re the product. Online service users are becoming more and more comfortable with this idea. To be clear, I don’t think libraries should get into the business of sharing reader data – but a cloud-based subscription model could. There are already some positive examples from within publishing of freemium reading models working as an incubator for amazing user data. Brett Sandusky at Kaplan has been working on Kaplan Labs for just this purpose. So while I remain unsure who will jump on board with any freemium subscription reading services, I think there are compelling reasons for US publishers today to seriously consider it.
 Major caveat here: I won’t pretend to understand markets outside the United States fluently, as they’re not my forte. For a reality check, you’ll have to talk to the experts, like Patricia Arancibia or Julieta Lionetti. So take my understanding of global with a grain of salt. I just see potential.