The value and challenges of subscription models for ebooks

In Customer Experience by rebeccam

Per139089-SquFrom the industry pioneers touted to be the Spotify for books… Justo Hidalgo, Co-founder, Chief Product Officer, 24 Symbols writes with impartiality and clarity on various content subscription strategies, and the value adds for each. The value is tied up in the customer experience delivered – people will pay and sign up for services that are compelling and experience enhancing. This is a fascinating blog post – and just a taste of the great discussions that will take place at the World e-Reading Congress 2012 (15-16 May, London).

"The most difficult steps forward are the ones that solve the tough problems and, at the same time, can be assumed by the existing industry. One of the key concepts under consideration by the publishing industry is related to the switch from ownership to consumption.

Just as music lovers are getting used to subscribing to services such as Spotify or Pandora, and movie lovers have long used Netflix streaming service to watch films, and internet users alike already find it as a typical behavior, the question is clear.

Will readers be interested in subscribing to an ebook service instead of (or, in addition to) purchasing ebooks? This is what I have been calling Book-as-a-Service, and I believe it will be a very strong part of most readers’ user experience in the near future. Safari led the pack years ago, with 24symbols or the Amazon Lending Library coming with variations of how a subscription is defined. From a reader’s perspective, what’s the gain beyond price?

Many reasons will be discussed at the World e-Reading Congress 2012, with a close eye to the differences between the subscription types available, but just to open the discussion, here you have a few of my thoughts.

First of all, the obvious one: a subscription service enables a unified and direct access to multiple ebooks. This could be the big multi-publisher’s hub, or specialized services (e.g. for professional verticals.) Instead of a “1-click buy” you get something even better: a “1-click read” service. To make it really useful, a subscription service should enable their users the possibility of reading books in the cloud directly, or offline.

Secondly, a subscription service should be, by definition, device-independent. This must be a demand by readers unless they want to get really locked by closed ecosystems. Once a book is on the cloud, new technologies like HTML5 should be used, making it open for consumption in desktop computers, laptops, tablets, internet-enabled e-ink devices or smartphones. The breadth of devices available should only be limited to pure technical constraints, not by strategic decisions based on switching costs.

Once a service is offered, readers can benefit from all the goodies that come with it. We live in a world of abundance, so content by itself is just not enough for someone to be able to discover it and then find it compelling enough to pay for it without any value-added capabilities that answer the user’s two main questions: “why this and not that?” and “why here and not there?” 

For instance, the availability of social capabilities like making comments about a book *inside of it*, creating real digital marginalia; recommendations that make use not only of the readers’ usage trends, but also of the text and metadata of the books, reaching new heights (and privacy challenges, of course!); or the mashing up of relevant information from other content sources in order to enrich the reading experience (don’t know what this word means? want to see where the coffee place the main character is having a tea is in a 1914 Paris map?)

From a publisher’s and an author’s perspective there are pretty good reasons too. They get real time aggregated information about how readers read books in a way that no offline service can match (the scope of this will depend on the type of subscription service. Will it be a lending program which would require complex synchronization between the user’s device and the server, or a cloud reading one? ); in addition, this information is proven valuable on finding new international markets, trends, etc. Related to this, discovery becomes both a challenge and an opportunity; while having thousands or millions of books complicates their search, it also creates an impressive opportunity, as there is more relevant data (both implicit and user-driven) to match recommendations, tastes and serendipity.

Subscription services also serve as extremely powerful online marketing platforms if properly integrated with core social networks. I wrote quite a bit about it in my previous post about social reading:  online marketing initiatives go beyond social reading, relating the content shared with in search engines for easier discovery through SEO techniques.

There are many other advantages for publishers and authors which will also be discussed in the conference but, of course, there are also some challenges to take into account, and must be handled carefully. How publishers and authors are paid is key specially when there are still many industry discussions about how these models fit the current contracts. Amazon’s Lending Library, through its KDP program for self-published authors, is pro-rating a flat monthly fee which is related to the number of times each book is downloaded that month. The amount is initially significant, and it may be increased in the future; only a behemoth like Amazon can start a disruptive model by burning $500,000 a month, but this does not make sense in the long term if the retailer is to set the maximum amount of money to be delivered and if it means exclusivity: a subscription service must be seen as an alternative and complementary channel to be used along with others, and a revenue share mechanism like the one proposed by 24symbols, though initially much humbler, has to be the way to go. This is how publishers, agents and authors will be able to manage their publishing strategy in a proper way, and with a good understanding of how revenue flows.

The World E-Reading congress will give me the opportunity to discuss different subscription models in a little more detail. But if we agree that internet is already playing a crucial role in the world of publishing, then we have to believe the book as a service and its closely related subscription delivery model have lots to say."


Justo Hidalgo, Co-founder, Chief Product Officer, 24 Symbols is a real industry innovator, and a key speaker at the World eReading Congress 2012.

The World e-Reading Congress 2012 (15-16 May 2012, London) is a premier B2B industry event for global book, magazine, and newspaper publishing executives.

Bringing together c-level publishing executives, the event provides an unrivalled platform to expose the most pressing business challenges on the minds of CEOs. Discussing everything from business models,  distribution channels, retail solutions, DRM, advertising and social media and more… it is the perfect forum and business opportunity to drive your organisation forwards in the digital publishing world!

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Rebecca Mantle
Project Director, Telecoms & Media, Terrapinn
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