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Old 12-21-2012, 06:51 AM   #1
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Subscription music is taking off (to overtake Itunes in a few year) what about ebook?

http://www.ifpi.org/content/library/...nd_figures.pdf

2010: 8.2 million paying subscribers
2011: 13.4 million paying subscribers (growth of 63%)
2012: ?
2013: ?
2014: ?
2015: ?
2016: ?


The two biggest are Spotify (5M paying subscribers) and Deezer (3M paying subscribers). Melon (2M) Mnet (1M) Rhapsody (1M) and Muve Music (1M paying subscribers) are the other major players.




In order to overtake Itunes, subscription services need around 30 million paying subscribers. About the same # as Netflix. Sirius XM satellite radio has around 20M.


Could something like this work for ebook? Here's someone who work in publishing take on it:

http://www.futurebook.net/content/su...l-ebook-retail
Is subscription the future model for eBook retail?


Quote:
Retailers agree to pay publishers a ‘lending rate’ per view, different to standard discount terms.
As Amazon is doing, allocate a proportion of the overall subscription revenue and apportion it on the basis of the selling price of the products and the amount of times they get loaned. Restrict the number of concurrent loans any user can have based on the subscription rate paid so that the people borrowing more books contribute more to the pot of revenue.
Reciprocal contra (seriously) - publishers can pay to invest in featuring titles (as normal) but retailers can also pay a higher rate of return on those titles – fortune favouring those publishers brave enough to invest in promotion. Publishers supporting retailers and vice versa.

And the benefits?

Less risk for the consumer choosing to test out a new author or genre (rather than buying what they know as is the current trend)
A steady increasable and renewable revenue stream from committed readers for publishers and retailers
Limitless pre-orders
Growth of WOM in ebook marketing
Opportunities for resourceful publishers to increase readerships and revenue by garnering audience and not necessarily forcing a sale
A more level playing field for retailers
The list goes on. Of course there are negatives and this is by no means straightforward. The model needs to demonstrate that income isn’t cannibalised. But potentially for the book reader, the retailer, and the publisher, the rewards do exist and movies (and libraries) could be showing us the way… As a committed book reader, I'd subscribe. Would you?
The other view:

http://www.huffingtonpost.com/mike-s...b_1684324.html
Mike Shatzkin on Why eBook Subscriptions Would Never Work

Last edited by Top100EbooksRank; 12-21-2012 at 07:12 AM.
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Old 12-21-2012, 07:00 AM   #2
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Interesting post. Thank you.

One sentence from the report caught my eye:

Quote:
28 per cent of internet users globally access unauthorised services on a monthly basis
"Internet users globally" covers a substantial part of the world's population. They're saying that a quarter of all those people access "unauthorised services" every month? I find that hard to believe.

In any case, how can they measure it?

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Old 12-21-2012, 07:03 AM   #3
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Here's the payout rate from subscription music.

http://www.digitalmusicnews.com/perm.../120604youtube

per source: "Payable to Artist/Label via digital distributor for sales from July to December, 2011."
(Rhapsody purchased Napster last year, though the Napster name continues in various European territories.)

Zune
15,159 plays
Payout = $437.58
$0.028 per song
Ratio = 25:1 iTunes Song Download

Napster
30,238 plays
Payout = $479.07
$0.016 per song
Ratio = 43:1 iTunes song download.

Rhapsody
50,822 plays
Payout = $668.57
$0.013 per song
Ratio = 53:1 iTunes song download.

Spotify
798,783 plays.
Payout = $4,277.39
$0.005 per song.
Ratio = 140:1 iTunes Song Download



Keep in mind that only Spotify has free streaming (5 million paying subscribers + 15 million free users). Without free users, Spotify will pay about the same rate as Rhapsody. The downside to offering free streaming: huge losses.

Spotify CEO recently said that the company could be profitable tomorrow if they wanted it but their focus right now is on growth and more growth. Spotify lost something like $50 million in 2011.

Free users is great for growth since 20-25% of them will convert to paid user (eventually). But it is a drag on profits since every free user will result in a few dollars loss per year for Spotify.

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Old 12-21-2012, 11:34 AM   #4
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Interesting data, thanks. I wonder how Rdio and Pandora stack up. If the streaming trend continues, and is able to create value rather than destroy it, Amazon and Apple will be obliged to offer their own streaming services at some point.

There are two unlimited subscription ebook services I know of: 24symbols and Oyster (not yet launched). No idea how either is doing.
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Old 12-21-2012, 03:20 PM   #5
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I think, eventually, all data will be purchased via subscription (once the retailers figure out a way to make everything available per some SLA).

Amazon has the right idea. That's the model.
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Old 12-21-2012, 10:53 PM   #6
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It is interesting. I've had a Zune subscription for a few years, but I barely look at it. I'm not even sure if it is still valid.
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Old 12-21-2012, 11:00 PM   #7
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I use my Netflix subscription regularly, but I am considering switching to Prime for the shipping, music, and lending library. I can't see myself paying for both.
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Old 12-22-2012, 06:53 AM   #8
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Quote:
Originally Posted by pidgeon92 View Post
It is interesting. I've had a Zune subscription for a few years, but I barely look at it. I'm not even sure if it is still valid.
Yeah, I checked out Pandora many many many years ago and again just recently as well as last.fm but they really don't do a lot for me. I DO listen to internet radio both local stations and a couple of classical and ambient depending on my mood etc. And I certainly don't want anything to do with iTunes.
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Old 12-22-2012, 08:56 AM   #9
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I use both Pandora and Last.FM.
And I've tried out the XBOX Music (nee Zune) subscription service.
Like'em all. Very good way of discovering new acts. Also a nice way to provide a semi-random soundtrack to day to day activities.
But I also buy CDs for albums I really want.

A friend of mine caught his son downloading pirate CD music off the net a few years back. He reprimanded him and signed up for a Rhapsody subscription. He figured that for the cost of one CD a month he could keep both his kids current, teach them good ethics, and avoid the potential embarrassment of a court appearance.

I'm afraid I don't see subscription services actually *dominating* anything any time soon. (This decade, at least.) The revenue they deliver to the content owners is out of line (too low by far) with what discrete sales + piracy generates.

There is room for subscriptions but they're never going to be comprehensive enough, easy enough, or cheap enough for massive consumer adoption. The content owners won't allow it.
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Old 12-22-2012, 10:36 AM   #10
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*cuddles his SKY.fm/DI.fm subscription* Best $5 a month I've ever spent. :P Despite having like 5000 songs in my personal collection, the variety of music they give is rather nice. Hell, if it wasn't for them, I never would've known I liked eurodance or house music (please don't hate me! :P Wish they had a celtic channel, though...). (EDIT: Huh. I see that it also includes jazzradio.com. Guess I'll have to check that out...)

On the other hand, ebook subscriptions don't really seem like they could work at all. Unlike music subscription services, the odds of an ebook subscription service having enough worthwhile items that free sources (public libraries, Project Gutenberg) are very low.

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Old 12-22-2012, 10:48 AM   #11
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Quote:
Originally Posted by pidgeon92 View Post
It is interesting. I've had a Zune subscription for a few years, but I barely look at it. I'm not even sure if it is still valid.
If you haven't noticed a monthly charge on your credit card, then no, it isn't valid anymore.

The Zune subscription service was great, IMO. For a reasonable monthly fee, unlimited access to music rental, with 5 tracks per month to download and keep DRM-free forever.
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Old 12-22-2012, 11:59 AM   #12
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If you haven't noticed a monthly charge on your credit card, then no, it isn't valid anymore.
I went with a yearly subscription, so I paid for twelve months in advance.
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Old 12-22-2012, 06:27 PM   #13
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I wonder if the prevalence of libraries might hinder the acceptance of a subscription model for books. People are used to borrowing books for free; if they pay for one, they expect to own it.

My own local library has started buying Kindle books and it's really easy to use; I can get most bestsellers as long as I'm willing to wait.
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Old 12-26-2012, 06:47 PM   #14
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Interesting possibility.

I'd look more into a ebook subscription type model.
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Old 12-26-2012, 08:36 PM   #15
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My husband subscribed to emusic until their prices went up, then to Napster (after they went subscription), and then Rhapsody acquired Napster so now it's a Rhapsody subscription. He loves it. He can basically get any album he wants. You can download it to and keep it on your devices as long as the subscription is active.

I personally paid for the Pandora upgrade. I like having commercial free whatever-I-like-themed music whenever I want rather than particular titles (although my husband hates it when the Stan Rogers and similar songs come on, heh).
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