Subscription Services Strike Back

Despite Oyster’s recent closure, subscription models are far from dead. On Wednesday, two companies announced new multimedia subscription platforms. Houghton Mifflin Harcourt shared news of its Curious World platform, a subscription service that provides interactive learning to children through ebooks, videos, and games. Disney too made headlines with the launch of its DisneyLife platform, a subscription service sharing Disney and Pixar movies, ebooks, and other Disney products to subscribers in the U.K. and Europe.

“This is the future, in many respects,” said Bob Iger, Disney’s chief executive in an announcement. “We’re seeing more and more opportunities to reach consumers directly and not through middlemen, and we’re seeing consumers wanting product in different ways…DisneyLife is a great example of our strategy to utilize technology to connect with consumers in more direct and compelling ways.”

HMH’s platform is a little different in the fact that it’s focused on improving learning as opposed to providing entertainment, but the end goal of reaching the consumer directly through subscription is similar. HMH, also like Disney, is banking on the recognition of its brand — the classic Curious George character — to attract parents and their children to the subscription service.

So what does this mean for book publishers? In terms of direct to consumer services, it only emphasizes the importance of having a proprietary channel to reach one’s audience. While few publishers have the size and brand recognition of Disney to launch their own subscription channel, some are finding other ways to build branded platforms to reach their audience. Simon & Schuster, for example, launched a site featuring paid video courses in January, led by its authors in the self-help, health, and finance categories. HarperCollins created a newsletter called BookPerk in 2011, which provides the latest book discounts on HarperCollins titles. Both initiatives focus on providing utility to consumers, which I think is a smart way for publishers to think about building a D2C channel.

The news from HMH and Disney also provide some insight on the future of the subscription model. I think there are two big takeaways for publishers. First, the subscription model isn’t going away. It’s a model that has only grown in value among consumers, and it’s important for publishers to be present on these platforms. HarperCollins’ Chantal Restivo-Alessi echoed this sentiment in an interview with Book Business last year.

Second, subscription services are diversifying. We saw glimmers of this when Scribd added audiobooks to its catalog a year ago. Subscription platforms will need to offer more than ebooks to attract a critical mass of consumers. That doesn’t necessarily mean videos and games, though. Bookmate, for example, has worked to create a social reading community on its platform, with chats, reading recommendations, and more to keep readers coming back. In 2016 I anticipate that we’ll only see more value-adds from existing subscription services to keep subscribers engaged and attract new audiences.

What do you think? How do you see subscription services evolving in 2016? Could book publishers launch subscription services similar to Disney’s?