It’s quite likely that we’ll look back at 2013 as the year when publishing stopped talking about the ‘Netflix’ or ‘Spotify for Books’ and actually did something about it. eBook subscription services went from being something talked about in op-ed articles and conference platforms to real-life services, some of which launched with tens of thousands of titles and support from major publishers. Most debate has focused on the fortunes of Oyster, the NYC-based start-up that launched earlier this year and Scribd, a service that has pivoted away from document sharing and publishing towards eBook subscription. Yet these are far from the only eBook subscription services in town. Another US-based service eReatah also launched earlier this year. Amazon has entered the market on its own terms, using eBook lending rather than subscription as a way of boosting membership of the Amazon Prime program. Meanwhile Europe’s fragmented ereading market is at risk of further fragmentation as country-specific subscription services emerge. 24Symbols continued to do well in its Spanish speaking home market and two Dutch publishers WPG Uitgevers B.V. and Lannoo Meulenhoff B.V. have teamed up to create a Netherlands-specific equivalent Riddo. In Denmark Riidr One addresses the relatively small domestic market with its own subscription service and in Germany the recently launched Skoobe boasts a 23,500 strong catalogue. As we blogged earlier this year, there’s a substantial if semantic difference between describing a subscription service as a Spotify or Netflix equivalent, even if the majority of media coverage surrounding these start-ups uses the comparisons interchangeably. The market as a whole, however, does draw temptingly easy comparisons with music streaming, which also experienced an explosion in ‘new’ services in the mid to late 2000’s. Some (Spotify) proved more successful than others who closed down for lack of uptake (Sky Songs) or were swallowed by new owners. For example, LaLa, widely considered a streaming pioneer was shuttered by Apple 6 months after it acquired the company in late 2009. Meanwhile, British We7 initially launched as a music streaming service, changed to a DJ model and after being acquired by Tesco relaunched as BlinkBox Music as a personalised music radio service. If the comparison between eBook subscription and music streaming markets holds, we can therefore expect: -

  • A few services to rise to the top
  • Some to fall into the hands of established market players who either want to engage with the subscription market or use their technology for their own purposes
  • Others to pivot in search of a business model that differentiates them from the leaders
  • A great many to fail after not reaching sufficient scale to attract further funding or support from content providers
So far most of the speculation on the long-term viability of eBook subscription has focused on what services pay publishers for use of their content. The major publishers haven’t disclosed the content of their deals, but a document outlining Smashwords’ terms with Oyster suggests that the latter pays the former 60% of list price each time a consumer reads more than 10% of a title ‘streamed’ from its library. This has led eBook subscription to be decried in some quarters as uneconomic, but in a qualifying blog post Smashwords CEO Mark Coker forwards the interesting argument that once again success or failure in this business all comes down to which metaphor you apply to it. Instead of comparing eBook subscription to an ‘all you can eat’ buffet where owners lose money on the ‘gluttons’, Coker instead likens these services to gym memberships, which are aspirational purchases made by people who rarely make full use of all the benefits they offer. Perhaps the best indication of how the early eBook subscription market is performing is buried in Scribd’s announcement in November 2013 that it had hit its launch milestone of sharing 100,000 books. The same press release indicated that the most ‘bookmarked’ book on its platform was Kurt Vonnegut’s Cat’s Cradle. This title – a backlist book by a prominent author in a catalogue that is skewed towards backlist and genre titles – is an early sign that subscription is unlikely to cannibalise mass market book sales. Instead the biggest risk that subscription services may pose to the status quo in the short to medium term is to remaindered and discount book shops and uptake of steeply discounted daily deals from major eBook retailers.