DBW and Subscription Models

01 Feb 2013 1:40 PM | Digital Rights Committee (Administrator)

Please note: Simon Lipskar did not write this post! I (Katie Zanecchia) work with Simon at Writers House and I’ve recently joined the committee. I’ll eventually be writing under my own name but given the recent conclusion of DBW and Tuesday’s news, I wanted to share these thoughts as soon as possible.

I left Digital Book World two weeks ago shocked, and a bit disheartened, by the number of subscription-based models our colleagues were talking about. Netflix for books! Wouldn’t it be great if we had a Spotify for books? Legitimate subscription models will decrease piracy! Tuesday’s NYT article, “As Music Streaming Grows, Royalties Slow to a Trickle,” that Linda’s already referenced, reinforced the challenging and, in my opinion, damaging effects of subscription models on creative artists.

It’s important to remember that books and music aren’t as analogous as recent discussions imply, both in terms of consumption patterns and business context. Firstly, we turn to Spotify, Pandora, Songza, YouTube for repeated, and often prolonged-but-inactive, consumption. The act of reading a book is distinct, and there is no real parallel between how we read and how we listen to music. On this basis alone, subscription models should be questioned by authors, by their agents, and by their publishers.

Secondly, companies like Spotify are rising from an industry not only completely gutted by piracy but also dominated by a single retailer with a view of the low commodity price of music. In this industry, it’s possible that legitimate subscription models do help decrease piracy and are helping re-monetize the digital consumption of music (even if the artist receives an insane rate of half a cent per stream). But this is not a problem facing the digital consumption of books. While piracy certainly affects our industry, it hasn’t undermined the profitability of publishing. In fact, we’ve seen tremendous commercial success with our digital product. We don’t need a subscription model to fix a comparable problem, because that comparable problem doesn’t exist. Book-based subscription models will, unquestionably, undermine the e-book business that continues to thrive.

Furthering the complexities of the economics, subscription models are hugely problematic when it comes to compensating artists. Consider the “Gangnam Style” example in Tuesday’s article: yes, Psy made $8 million, but he still only made .6 cent per view. What happens to the mid-list artists who never come close to phenomenon status? They receive less than pennies. If we’ve already determined that consumption patterns and the business contexts are different, it begs the question: why we are even considering modeling the compensation terms on these services? [It’s worth revisiting Simon Lipskar’s post from late 2011 exploring this very issue.]

Ah, but what about discovery? It seems that discoverability is the new magic word when talking about e-books, but I don’t think we’ve come close to figuring it out just yet. Catalog availability and discovery are two very different animals. A subscription service may make a number of titles available, but what specific examples have we seen where that availability translates directly to meaningful discovery? Unless we see a subscription service that is truly aiding discovery in measurable, consistent, and effective ways, I remain skeptical of the baseless discoverability claims.

I’ve also heard a conversation stirring based on the assertion that while there isn’t a “problem” here, per se, consumers are thirsty for these models. Taking it one step further, there are those that assert that if consumer demand continues to grow, someone will oblige. If that’s the case, why not get ahead of the game and introduce competitors immediately? Even if this were to come to pass, pure capability does not justify rash, destructive behavior. We can fight these models, and we can exclude our content. And a word on this speculative consumer demand: the truth is, consumers want a lot of things they can’t have. Just because they might want a book-based subscription model doesn’t mean they should get high value content from publishers via a book-based subscription model.

I find it imperative that we, as agents, continue to keep our heads above the chatter. As I see it, at this point in time, we’d be throwing our authors into a model that a.) doesn’t work with how we read, b.) doesn’t effectively help us discover new titles, and most importantly, c.) doesn’t appropriately compensate authors for their inclusion and their accessed titles. Until things change in a dramatic way, I think it’s crucial to approach these services with caution and judiciousness.

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