Digital Directions: At Your Service
Like manna from heaven, e-books hold forth the promise that publishing will continue to be relevant in the digital age. They represent a truly monetizable digital delivery model with demonstrated value to consumers. The debate now is not whether or not e-books will generate revenue, but how much revenue, and to what degree it will be incremental or replacement.
The classic e-book model consists of:
1. Publisher executes what is essentially a conversion process to generate the e-book, which is, to varying degrees, a representation of a print product.
2. The e-book is placed in a commerce platform (such as Amazon's Kindle Store or Google's eBookstore).
3. Consumer downloads purchased e-book to mobile device.
This model—downloading media to a playback device—is directly analogous to Apple's iTunes, and quickly grasped by the marketplace. The familiarity of the model—along with Amazon's kick-start through its Kindle program—helped e-books gain traction in the marketplace.
Alongside all this frothy e-book excitement, strong interest exists among both publishers and consumers in a fundamentally different model: content delivery through subscription-based services.
The subscription model consists of:
1. Publisher prepares digital content from a collection of titles and/or other assets. Often these collections represent aggregate value as a resource for research.
2. Digital collections are then placed within an online delivery environment.
3. Consumer purchases a subscription, giving them access to a specified set of content for a specified time period, within an application interface to help search and use the material.
4. Consumer then accesses content via browser or mobile device.
Single Versus Subscription Purchases
There are a couple of fundamental differences between the e-book and subscription models. First, digital content in the e-book model is typically downloaded from a service to a device, then read offline. In the subscription model, however, content is delivered dynamically from a server—in real time—requiring readers to remain connected.
Subscription services can generate significant value for both publishers and consumers. If appropriately executed, publishers can create new annuity revenue streams from subscriptions. One of the attractive aspects of subscription revenue is often its stability (and predictability) when compared to a typical product-revenue pattern.
For consumers, subscription access represents an offering in which the whole is greater than the sum of its parts.
Clearly, not all market segments may be appropriate for subscription delivery. Professional information—e.g., law, scientific, technical and medical (STM) or finance—is clearly a good fit, as are educational offerings that support online learning. In both cases, great value is provided through access to a wide array of information. Opportunities also may be found in family health, automotive and culinary content, to name just a few.
A number of well-known distribution partners, for years, have aggregated publisher content into databases on a subscription basis, primarily accessed through libraries. The scale of these providers' digital content is impressive. However, huge subject breadth creates other challenges: There is often a lack of focus in any specific domain or subject vertical.
Greater value seems to be generated by smaller programs that have greater focus, such as those offered by Knovel in the engineering/technical domain, or Alexander Street Press in humanities scholarship. When there is a subject-domain focus, there is a curatorial value added, more precise tagging and indexing, and a better understanding of the subscribers' goals.
Can publishers create their own subscription services and not get rolled up into an aggregator's offering? In some cases they can, if certain criteria are met. When a publisher has both a leading position in a subject domain and a critical mass of content in that domain, then the creation of a subscription-based model should be explored. The University of Chicago Press successfully launched a subscription offering based upon one title. Since that title was the "Chicago Manual of Style," the criteria were met.
Developing and supporting a subscription-based offering—whether a delivery partner is involved or not—requires the publisher to grapple with significant changes, the most fundamental of which is the shift from a company that creates products to one that also delivers content services. Publishers that successfully navigate this new terrain will discover new ways of bringing value to the content marketplace and realize the revenue this value generates. BB
Andrew Brenneman is founder of Finitiv (Finitiv.com), a consulting and services organization that develops and executes transformative digital strategy for publishers and other content organizations.