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Can a ‘Spotify for books’ really work?

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Over the last year, we have reported on the emergence of Oyster, 24symbols and Bookboard — all planning to offer rental of multiple ebooks for a monthly subscription.

But, with the conventional ebook download craze still taking off, can this Spotify- or Netflix-like ebook access model attract consumers so soon?

A survey by media strategy agency Oliver & Ohlbaum (O&O) shows 29 percent of current UK ebook users very interested in such a prospect — and only three percent not at all.

Oliver & Ohlbaum 2012 survey - Spotify for books

That is a large slice of the ebooks market that is prepared to switch from ownership to access. So how would such a move affect money in the business… ?

Right now, UK ebook buyers spend an average £33 ($53) per year on ebooks, according to BML Bowker and Publishers Association data crunched by O&O.

For a “Spotify for books”, most consumers say they would like to pay only up to £5 ($8) per month. But consumers will naturally always aim low when asked — and the high end of even that margin (£5 per month) would double UK ebook buyers’ annual ebook spending to £60 per year ($96).

But there is also willingness to pay more, up to £10 per month. That would raise ebook spending to £120 ($193) per year — the same rate Spotify charges for unlimited music.

Note that, since UK ebook spending so far lags that in the U.S., the American boost from a move from ownership to access may be relatively less pronounced.

Whether this move makes sense for the industry’s value chain may depend on how many books all-you-can-eat subscribers would really use…

Right now, the majority of consumers download fewer than five ebooks per year, O&O’s Bowker and Publishers Association data shows. An unlimited-access service may need to target those who download more than one ebook per month. But that represents a combined 41 percent of all current downloaders — a sizeable enough segment to go after…

Oliver & Ohlbaum 2012 ebook survey - annual purchase frequency

One other factor may be that even UK ebook customers, on average, spend far more on printed books each year than on digital — just as with all content types, operators swap analogue dollars for digital pennies…

Oliver & Ohlbaum 2012 ebook survey - average book spend pa

My colleague Laura Hazard Owen says the prospect is distant, however:

“Success for these kinds of services depends on what offerings consumer are imagining. Are they thinking they would pay this much for a truly unlimited selection of titles, like a library with a lot of new, front-list books?

“It is still hard to conceive of how this would exactly work, because we are so, so far from any kind of model that gives access to publishers’ new titles.”

If the book publishing market does grow as an unlimited-access service like music is, expect the same kind of debates over royalties from the creatives who supply the content in the first place.

8 Responses to “Can a ‘Spotify for books’ really work?”

  1. BTW Kindle Owner Lending Library is a big disappointment – 1 title per MONTH and last I looked there were only 58 titles available. That’s pathetic – free public libraries with online lending can beat that any day.

  2. Joe Wikert

    I think we’ll definitely see success in the “Spotify for ebooks” model. Don’t forget that it took quite awhile for most consumers to even be interested in streaming music. We all wanted to own our content, myself included. These days though I can’t tell you the last time I bought a track off iTunes but I can tell you that I fire up Spotify pretty regularly.

    The content offering will determine success or failure here. Amazon chose to add what they could to Prime with the Kindle Owner Lending Library program. That’s a nice add-on since the Prime rate didn’t go up, but it’s missing all sorts of content.

    I tend to think it’s best to focus on a specific genre. Don’t just serve up a bunch of content. Build and serve the community as well. I’m much more inclined to sign up for a subscription service featuring nothing but sports books than I would one where it’s super broad and sports is just one small piece of it. The same goes for all the other genres that appeal to each of us.

  3. Interesting analysis, but PaidContent neglected to mention the interests of a critical constituency: The authors.

    As an author of premium nonfiction ebooks (“Dropbox In 30 Minutes”, “Google Drive & Docs In 30 Minutes”, “Excel Basics In 30 Minutes”, etc.) I’m very concerned about any model that depends on free giveaways. For instance, the “free days” on Amazon’s KDP Select have turned into a joke. The last time I looked, my single KDP Select title delivered an average of 1 cent per download from the KDP Select fund. That’s about the same as many bands enjoy from Spotify each time someone plays one of their tracks, according to various sources.

    I see from the linked article about Bookboard that the service is free during the public beta, and publishers are receiving nothing during this period. It’s supposed to switch to paid in 2013, but it’s not clear if it’s a Spotify-style freemium model. There is also no detail about how much authors will get for their work. I suspect it isn’t much.

  4. Timo Boezeman

    @Thomas define music please. Spotify is doing better every year, and is probably going to be the number 1 revenue source very soon (now they’re second, just behind iTunes). See for instance this article:

    And, we must not forget the probabilty that there might be less money to be made with selling digital media in comparison to physical media. Which, if that turns out to be the case, redefines what does work and what doesn’t. That is relative.

    And, last but not least, Spotify turns out to be a (legal) alternative for piracy in music. So doing nothing (like that) at all, makes that you will lose money be keeping it the way you were doing already.

  5. abbyhanson

    As a stand alone offering Spotify books is an exciting prospect for; the student, academic and the curious.

    If it’s true that you can get the gist of any non-fiction book by just reading the first five pages, then why own a non-fiction e-book? As for fiction, would a Spotify book service benefit from building a sharing/referral capability to drive consumer take-up? Surely it’s a just a matter of time for an e-book access service model is ‘successful’ (even if its focused on a niche such as academia).

    As for the supply-side, Is there an aggregration platform out there with a strong brand that enables ‘non published/independent’ writers engage with their audiences?

    My initial thought is: Spotify books would be an interesting product extension and added value for bundled propositions