Revenue Share vs. Breakage: Calculating the Publisher's Cut in Subscription Services
The Subscription Revenue Share Model
A straightforward approach used by a number of aggregation services, such as Safari, the Subscription Share Model is an extension of the traditional revenue share between publisher and distributor. In the case of aggregation services however, the revenue is further split among a large number of publishers. For example, if the subscription service provider were to take 40% of revenue, the remaining 60% must be further divided across all of the participating publishers. The split among the various publishers may be based on percentage of page views or percentage of titles to which the subscriber is given access. In either case, if there are a large number of publishers participating, each with a large number of books, then the percentages that result for each book could become very, very small.