Why Publishers and Ebook Platforms Should Take a Page Out of Spotify's Book
Spotify moving ahead of iTunes in royalty fees paid to musicians in Europe is a strong validation of the subscription and streaming model and an indication that consumers are turning away from digital downloads. The explosive growth of Spotify is an example of what happens when an industry gets behind a new technology and business model.
I predict that we will see similar results in other media sectors such as ebooks. Readers, like music fans, want freedom of choice and this is precisely what a subscription-based model provides. Subscription changes the way readers read. It removes the monetary decision from reading. As long as your subscription is current you can browse freely throughout a catalog of books, dipping into as many books as you like. In short, people read more books, more often.
These changes are particularly important in markets outside Europe and the U.S. Consumers in developing countries where piracy is rife don't have a culture of paying for digital content, so ebooks are much more difficult to monetize.
Intuitive social functionality combined with the convenience of a subscription model is a winning formula and we've found the value it creates for the consumer makes a subscription model viable. Other media forms are inherently social: We watch movies together, we go to concerts and enjoy music together, and it is human nature to want to experience and share together. However, reading is a mostly solitary affair, despite the fact that a reader's experience with a book lasts over many days and often the relationship with the characters may extend across multiple titles so the emotional engagement is arguably higher. Online and mobile technology gives us the tools to incorporate new functionality into reading apps, opening up the possibilities for a richer social experience.
Currently, even the big players like Amazon have not been able to fully capitalize on the possibilities offered by social functionality. The standard course of action has been to spend a lot of time and money producing algorithms that recommend books for users based on behavior. As good as these algorithms may be, we feel they cannot replicate the success of recommendations from friends, family, or like-minded readers.
Ereading apps also open the door to much greater interaction and information for authors and publishers. On one hand, a range of customer information and reading habits provides a wealth of insights that can inform marketing activity, and on the other, authors can potentially interact directly with their readers via social functions. It is possible this new relationship between authors and their readers could even inform the type of books that are written.
Spotify's success is a clear sign that if book publishers and ebook services work closely together, new innovative business models can be created that consumers will take to on mass. The ereading market across the world will look very different in five years. Services that are nothing more than downloadable books will find that to crack non-Western markets and continue to grow their consumer base in Europe and the U.S., they will need to provide more. Those that don't change will find their market share eroded by startups that offer increasingly demanding consumers more. From the perspective of consumers, reading ebooks will only become a more social, flexible, and enjoyable experience.
Simon Dunlop is co-founder of Bookmate, an international ebook subscription service and social platform. He has spent the last four years working to make Bookmate a viable distribution alternative to traditional e-tailers like Amazon.