Decoding the Subscription Economy

Do you have a sense of how many publishers are using subscription models?

As far as the percentage of the market that subscription holds, I think it is very small. It is hard to get a very clear sense of it. We did see overall about 60% of publishers surveyed said that they have made some amount of their digital book content available through aggregators or subscription services, which is higher than I thought it would be.

What are the different types of subscription models BISG identified in its research?

We identified a number of access models. We've displayed this in the study as a pyramid graph. As you move up the pyramid you move from a large open access collection into things like collections that are behind a paywall, like Netflix or The New York Times. The third level of the pyramid contains models like pay-per-view, where users can choose certain titles out of a collection. The top level of the pyramid is purchase. As you move up, you are seeing increased revenue per title sold, but as you move down you are seeing decreased friction and a wider range of access for the consumer.

One of the interesting things that came up was that publishers could use all four of these models through windowing. You see this happening in the movie industry. First the movie is just in the theater, and then you can buy the DVD. Then you can get it on demand or rent it eventually from Netflix. This is not dissimilar from how publishers release a hardcover title first, then the paperback a year or two down the road. Windowing is something publishers would be more comfortable and familiar with, and if they can figure out a way to adapt that sort of strategy to these access models, it might work well.