Streaming ebook subscription services are the future of ebooks
Streaming ebooks had to happen.
E-books are no different from any other digital commodity, such as movies, music and television programmes.
Once a company holds the rights to enough digital content, it has the market power to rent out access to its huge library via a monthly subscription.
With Amazon’s entry into Kindle streaming ebooks with Kindle Unlimited, which follows similar services offered by Oyster, which went out of business, and Scribd, it is clear that publishing and self-publishing are in for another shake-up and a new round of decision making by those who provide the content – publishers, small press and self-publishing authors.
Without going into every minute detail, there is one simple fact that will make this bad news for content providers, but good news for e-book subscription services.
The common royalty model used by ebook subscription services is based on the number of pages read by a subscriber. But the earnings per page read are much, much lower than for a book sale of course.
Amazon has approximately 65% of the book and ebook market, so what it does, does matter and will certainly affect everyone in the supply chain.
Amazon doesn’t offer a fixed percentage of an ebook’s price but has applied its totally unknown to anyone but it, royalty return basis, by using its KDP Select Global Fund, which varies each month depending on how much Amazon puts into the pot.
Amazon has been using this guesswork royalty system for some time with the Kindle Owner’s Lending Library (KOLL), and from my experience, it has never been and was never meant to be a winner for authors.
The only known fact about it is that it will return a much lower payment per e-book than a sale.
Amazon also demands total exclusivity on all content enrolled in KDP Select to qualify for Amazon Unlimited and KOLL, which is a very high price to pay when a content provider has no idea of what return to expect.
No matter which way royalties are going to be calculated for these services, and probably more new entrants in the Netflix for e-books subscription service business will arrive, they are all almost guaranteed to be at the price of a much lower return for authors and publishers.
The music business is a long way further ahead on this same road, and after CD sales died completely, digital sales are now spiralling downwards as a result of subscription-based music streaming services.
The result has seen more grey-haired musicians coming out of retirement in their seventies, heading back on tour to make money, as their royalties that they expected would have provided for a comfortable retirement have dried up over recent years.
I went to see Deep Purple in concert last year. It was a pitiful performance, bordering on outright embarrassing, but how else are they expected to make a buck now?
Well, at least Deep Purple has the option of performing concerts to make a buck and pay the rent once again. That is a luxury authors do not have.
Related reading: Kindle Unlimited Has A Problem – It Can’t Count Words