Seven Reasons Ebook Subscription Will Fail

ebook subscription services have problems

Ebook subscription services have a few problems

How can ebook subscription work, when music subscription services are still struggling to make their models profitable?

Let’s face it; it is surely much easier to create a viable business model from offering three-minute music tracks to subscribers, as opposed to ebooks that can take a week to read.

Even music giant Apple is finding the going a little tough with its new music subscription service, as it fights to gain market share, and it is notable that they have ignored ebook subscription completely.

So if it is not an easy business model for music and Apple, it is going to be even tougher for ebooks.

In fact, I believe that a profitable ebook subscription business model will be extremely difficult, if not impossible to find. In other words, they will probably fail.

In recent times ebooks subscription service, Oyster have ‘sunset’ their business, which really means they have given up and closed.

More failures will follow, I am sure, and here is why they will.

Seven reasons why ebook subscription will fail.

One – Limited Choice:

Most ebook subscription services are offering, for the most part, self-published ebooks. This is because large publishers are reluctant to sign up, as they would lose an awful lot of money.

For $9.99 per month, ebook subscribers will not find any of the latest bestsellers, and probably very few, if any, ebooks by popular authors.

Two – Value for money:

As most ebooks being offered by ebook subscription are self-published, they tend to be in the price range of $0.99 – $3.99. Unless you are a reader of more than say 3-4 ebooks per month, perhaps it’s better value to buy the ebooks and keep them, rather than pay $9.99 only to borrow them for a limited time.

Three – Quality:

Again, because most of the ebooks being offered by subscription are self-published, not every ebook is going to be of a high standard. I am a huge supporter of self-publishing, but also a realist.

There are a lot of bad self-published ebooks, so while it may seem that there are a lot of ebooks available under subscription, it does not mean that they are all of high quality.

Four – Authors lose out badly:

No matter what the ebook subscription model, authors are paid far, far less per ebook borrowed than if they sold an ebook. This is not viable for authors unless subscription generates 4 or 5 times as many readers of their ebooks.

To make a generalisation, for an ebook with a sales price of $3.99, the return for a full read under subscription is around $1.30. At such a reduced royalty, the only result can be that the author loses out badly unless a lot more readers borrow compared to those who buy.

A three to one ratio increase would be necessary here, and quite honestly, this is hardly likely.

Five – Rabid Romance:

There are some genres that are just too popular for any ebook subscription model. As was reported in The Digital Reader, Scribd pulled romance titles from their subscription service, because romance readers were reading far too many ebooks per month.

Ebook subscription will always suffer from the problem of too many ebooks being read in popular genres, such as erotica, science fiction or YA paranormal, which means that these genres operate at a huge loss for the ebook subscription service.

However, generating enough subscribers interested in reading less popular genres such as biographies, poetry, or historical and literary fiction is a huge, if not impossible challenge.

Six – Slow subscriber growth:

As music subscription services have found, gaining paying subscribers is not easy, and keeping them is also a challenge. At the current market ceiling price of $9.99, making a profit will depend on having and continually increasing huge subscriber numbers as profit margins must be razor thin.

Also, if the majority of subscribers are heavy readers of say, more than 6 or 7 ebooks per month, most subscription services would be operating at a loss.

But attracting moderate readers of 2-4 ebooks a month, who would be more profitable, may prove difficult as it may well be more cost-effective for them to buy ebooks.

Seven – Authors will withdraw their ebooks:

Paying authors fairly will be the biggest challenge under ebook subscription.

Even giant Amazon discovered after only a few months of Kindle Unlimited (KU) that they had got something very, very wrong.

Amazon made quite a rapid change to their payment model to authors to try to correct the problem, but the jury is still out on whether authors feel the change was fair. One thing is certain. It did not increase authors’ royalties.

There are probably many more reasons why ebook subscription will be a hard sell, but only time will tell.

All I can say is that I am a doubter, simply because the numbers just don’t seem to add up to a profitable business model for either service providers, or authors.

A lose-lose scenario is not a great business model.

Derek Haines

Derek Haines is an Australian author, living in Switzerland.

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