DISCUSSION

Is subscription selling good for books?

December 29, 2014Written by Tom Ryan

Mimicking Spotify in the music space and Netflix for TV shows and films, a number of subscription-based models have arrived that provide access to unlimited e-books and audiobooks for a monthly fee. Like some music artists, some authors aren't happy, especially with Amazon entering the fray.

Kindle Unlimited, launched in July, offers access to 700,000 books for $9.99 a month. Others subscription book start-ups include Entitle, Oyster and Scribd.

When launched in July, Amazon touted the service as a cost-effective way for consumers to attain best sellers and discover new authors. Russ Grandinetti, SVP, Kindle, said in a statement at the time, "You won't have to think twice before you try a new author or genre."

Authors are paid each time someone reads more than 10 percent of one of their books, although the amounts paid depend on individual deals struck between publishers and Amazon.

Several recent reports, however, have detailed how Kindle Unlimited particularly hurts self-publishers. Traditionally, self-published authors received 70 percent of the sticker price of a book, much more than publishers pay when books are sold through Amazon. Under Kindle Limited, self-published authors receive closer to a third in most cases, according to several reports.

Self-publishers usually must sell exclusively on Amazon to be part of the program. Traditional publishers are by all accounts getting a deal closer to physical book selling rates without exclusivity.

The subscription-based model promises to encourage more reading — and, consequently, sales — while introducing new readers to self-publishing authors. Claiming their books are being used at loss leaders, some self-publishers have chosen not to sell through Kindle Unlimited at the risk their books will not be promote on amazon.com.

Holly Ward, who writes romances under the name H.M. Ward, told the New York Times that Kindle Unlimited caps off spending by the average reader to $120 a year while many voracious romance readers typically buy several titles a week.

Several avant-garde musicians, such as Radiohead's Thom Yorke and David Byrne of The Talking Heads fame, have long been critics of the low royalty but bigger potential volume formula promised from streaming services such as Spotify and Pandora. But music streaming services earlier this year received a particular blow when best selling artist, Taylor Swift, pulled her platinum-selling album, "1989," from Spotify. She argued in a Wall Street Journal op-ed, "Valuable things should be paid for."

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