Earlier this month, Techcrunch featured “Startups Pitching A “Netflix For E-Books” May Have A Tough Sell”, a post by Sarah Perez. In her piece, Perez offered some thoughts on why a rental market for books seems less likely to develop, even as a rental market for movies takes hold.
In making her case, Perez focuses largely on the trade publishing market, the kinds of books you’d find at Barnes & Noble or your local independent bookseller. In that space, I agree that the companies trying to make eBook rentals a reality in the United States face an uphill battle, but I think Perez misses the core reason:
It's really hard to buy a trade eBook today.
For general-interest eBooks, there is very little space between “buying” and “renting”. For the most part, eBooks are licensed: they are limited to a single platform, can be shared only in circumscribed ways and cannot be resold.
The eBooks you rent … are limited to a single platform, cannot be shared and were never yours to resell. There's just a sliver of daylight separating "buying" and "renting" in the eBook space.
By comparison, you can actually buy movies, making the purchase/rental calculation a real one. The price of a single high-definition movie is generally higher than the price for monthly streaming, but you can lend and resell the physical disk. Typically, you can also watch purchased movies on more than one platform.
In markets like the United States, publishers have been happy to rely on platform-specific eBook sales (happy, that is, until the platforms started to test or determine the price of eBooks). Until recently, the same publishers have been reluctant to sell eBooks to libraries, and the current relationship between publishers and libraries is not what anyone would call cozy.
Looking at this landscape, you could conclude that publishers kind of like digital books as they are: hamstrung, of little downstream value and mostly available through closed platforms. That's a point that industry observer bowerbird made after I recently argued that "publishers need to stop letting lock-in trump functionality".
A focus on trade publishing in the United States can also blind us. In her TechCrunch profile, Perez missed three other, useful trends:
- The eBook market is increasingly global
- There are already useful vertical services
- There are already pay-as-you-read options
While these trends are not the primary challenge to eBook subscription services, they aren’t trivial, either. Global is important: A company like 24 Symbols, based in Spain, might not get the buzz that Oyster has received, but it was up and running before Oyster went looking for capital.
A canny global subscription model might also work in markets where the average reader can’t afford to pay list price for books. In 2011, a study of media piracy in emerging economies found that high price relative to average income was a leading indicator of the instance of piracy. A targeted subscription model could provide publishers with an opportunity to open up new markets while lowering the risk of downstream piracy.
Perez also missed the important vertical services that have already developed around specific content niches, including technology (Safari Books Online) and higher education (Coursesmart). These and other services provide users with the ability to consume less than a whole book or to review content from a wider cross-section of titles than any one user might buy.
“Sampling” is an idea also explored by ValoBox, a U.K.-based “pay-as-you-read” service. Publishers can set a price for a unit of reading – a chapter, for example, or a section on a given topic – and Valobox acts as a toll keeper. Readers never pay more than they would for a full work, but they pay only for what they read.
None of these examples is necessarily “the” solution for subscription-like services for books. For all we know, none may persist. But there’s a significant risk in evaluating any business model against only what we know.
There are many different types of publishing, with markets for digital content spread around the world. Subscription models could provide publishers with options to be global, niche and customized, all at once.