It’s that time of year again – The London Book Fair and Book Expo America are around the corner and we've all shaken off the New Year cobwebs.
I wanted to look at 2 key trends that seem to be part of the publishing zeitgeist today. Topics that come up time and time again when speaking with publishers.
1. The rise of the subscription model.
No surprise here, but 2014 saw the launch and certainly initial success of the eBook subscription model. I’ve long been saying that the subscription model does not have a sustainable business model right now – see my blog or a DBW debate for example, but that’s not to say it doesn’t down the line. Millions of investment dollars buys you a lot of experimentation and room for growing pains.
Ultimately I don’t believe the initial model of paying full wholesale price per book read is sustainable in the long term primarily due to the characteristics of the demographic that subscription appeals most to - the power reader. However, the concept of a shared pool of revenue – total income from subscribers minus the services fee shared out amongst publishers based on usage does make sense.
I can hear the independent publishers crying out – but that just means the big 5 take the lions share. In principle that may be true but here are 2 interesting points. Firstly, the most successful of ePubDirect’s clients in subscription models have not been the larger publishers. Many users of subscription models can’t and don’t discriminate between frontlist and backlist or bestsellers. Interestingly, from speaking to many of the senior people at the subscription companies, this seems to be a general trend.
What I think we will see more of in 2015 is the emergence of the niche subscription platform. Focused on a specific vertical with loyal consumer bases sharing the same interests I can see this working quite well. Look at EPIC in the children’s space. Would I as a parent pay 9.99 or 19.99 per month for unlimited access to curated books for my kids? Of course I would.
Whether any of these players can survive as independent companies or ill be gobbled up by the larger players remains to be seen.
We’ll see niches like cookery and crafts soon join this space.
Managing the subscription business model
Of course, one of the major challenges publishers face is not necessarily the business model itself but how to actually record this income –both from an accounting perspective and also in communication or reporting with the author.
In my experience, publishers accounting systems are often old but almost always inflexible. There are a whole host of cloud based accounting systems available online that are configurable in multiple ways and easily adaptable to a publishers requirements. (As well as being significantly cheaper than typical accounting packages) For as little as $10 pm the likes of QuickBooks, Xero or Freshbooks can update your accounting system easily with no on site installs or updates.
If I were a publisher in 2015 I would be looking at these. One of the very few certainties in publishing today is that over the next 2-3 years we will encounter new, unusual and radically different business models. If you are an entrepreneurial publisher you need to be prepared to experiment and deal with all these new commercial models and unusual sales reporting.
2. The anti-Amazon bandwagon
I hesitated before putting the above title. Why? Well, I think 2014 wasn't actually about Amazon. While the Amazon vs Hachette debate was the focal point of the movement, I think this was the first significant step in publishers beginning to try and regain control over an industry they frankly gave away in the late 2000’s.
So it’s not specifically about Amazon –and Amazons merits can be debated elsewhere – it’s more about publishers themselves.
There is a growing undercurrent of discontent amongst publishers around eBook sales. They don’t know who’s buying their eBooks. They don’t understand fully what compels or encourages a reader to buy their eBooks - there is a real vacuum of knowledge here that is filled only be retailers and the associated platforms, none of whom have any incentive to share this information with publishers.
Which is somewhat ironic as without publishers, these businesses and platforms would not exist.
This year I believe that publishers will focus even more on wresting back some of the ground lost. This will happen through two different strategies;
a. Direct to Consumer
Possibly the most overused terminology in the industry, D2C will really start to blossom in 2015. With companies like Firsty, Supadu and Gumroad amongst many others making it increasingly easy for publishers to reach their readers directly.
If I were a publisher I would question whether I should do this myself. I think on balance I should, but it means investing significantly in skills and strategies that are often quite foreign to our average publisher. One other baby elephant in the room is DRM – it would be significantly easier to sell direct to my readers without DRM. Less investment, less technical infrastructure required and easier for readers to read my books.
(As an aside, I firmly believe that DRM free will be the norm in the next 3-5 years. Publishing will be less about the protection of a particular content or format but more about monetizing the content in a multitude of ways.)
b. The Democratization of information
I believe 2015 will see publishers getting more access to the information they need. Many platforms, in an increasingly competitive marketplace will begin to share more and more information with publishers. Kobo are an example of a retailer doing this in a limited way currently.
If I were an eBook retailer starting today I would be extremely open with publishers – sharing page views, conversion rates, customer demographics etc. my publishers would love me for it and that loyalty and engagement would be worth its weight in gold.
I doubt that exact scenario will happen anytime soon but I do think the smart companies in the industry like AppAnnie, Inscribe, Mediamiser and dare I say ePubDirect, with their data services are starting to more and more fill in those critical gaps that publishers need in order to become more effective and successful publishing entities.
These are just 2 of the major influences in the digital publishing space right now. I would love to hear what you think are the hot topics – Let me know below.