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E- BOOKS: COULD THIS BE “BOOKFLIX”?

"Bookflix" Image Credit- Audio Books
Image Credit: Audio Books
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IS THIS THE NEXT NETFLIX?
E-Book publishers have lagged miserably in adapting to the new media. The e-reader is not much different than the Palm Pilot. There is customer resistance to the price of e-books approaching that of a hard cover print edition of the same work. The price of an e-book does not seem justified when the traditional costs of producing a print book are eliminated. Moreover, e-book publishers have fought unlimited loaning by libraries, and have even taken the position ( as written about in a prior post) that even if you “buy” the ebook you really don’t own it, but meerely have a license to use it, and cannot not resell it. Therefore, their image is one of limiting access and closely guarding their profits.
On our Purpose Page we observed that, “Just as the iPod changed the shape of the music industry,  the entire book publishing industry, is on the brink of a paradigm change.”
Now, two companies outside book publishing offer unlimited downloads of e-books for a flat monthly fee. As stated by for GagaOM in her article, “No, seriously: Oyster comes pretty close to being a Netflix for ebooks,” “A lot of startups want to be the Netflix (or Spotify, Pandora, whatever) for ebooks. That is, they want to provide unlimited access to ebooks for a flat monthly fee.”
She reported that In September, ” Oyster launched on iPhone with over 100,000 in-copyright ebooks (i.e., not free public domain stuff) that users can access for $9.95 a month.” The Oyster website shows some of the books available. Ms. Hazard Owen says,

The iPhone app is crisp, clean and intuitive to navigate. You can tell that it was designed by folks with a serious tech and mobile background: Cofounder and chief product officer Willem Van Lancker was a lead designer for the Google Maps iOS app.

Oyster’s home screen offers Netflix-style browsing with books’ covers arranged in rows in categories like, “New & Noteworthy,” “Award-Winning Fiction,” “Book to Blockbusters” and “Popular Science.” To delve deeper, you can browse by genre (history, fiction, literature, etc.), by title or by author. When you see a book you want to read, you can either press a “play” button to start reading right away or press a the “+” icon to add it to your reading list.

Oyster Shutter Island
       Example of Oyster Offering

An article by  Liliputing, “Scribd launches eBook subscription service for $9 per month” reports that,

The company is partnering with Harper Collins, and some of the titles available include works from popular authors including Arthur C. Clarke,  Neil Gaiman, John Irving, Dennis Lehane, and Neal Stephenson.

Scribd eBooks                                                                                                                              Sample of Scribd Offerings

  in an article in the New York Times  published on October 1, 2013 titled,  “HarperCollins Joins Scribd in E-Book Subscription Plan,”   quotes the CEO of Scribd, Trip Adler, as saying: “The main thing publishers of all kinds want is more readers, more distribution and more revenue. We’re building more of a destination site for readers.”

WILL THE “BOOKFLIX” CONCEPT SUCCEED?

As the CEO of Scribd said above, “The main thing publishers of all kinds want is more readers, more distribution and more revenue.”  The first issue, of course, is is there a market? Many books (fiction) are read once and never again. The idea of paying a monthly subscription price at a  fraction of the cost of buying  an e-book at full price should be very attractive to lots of readers. Will this result in more readers? It’s hard to tell. If all it does is convert present buyers to borrowers, the objective of increasing the number of readers will not be met. However, the price is so attractive that it is hoped to result in many more new readers “sampling” an ebook  whereas they would not buy it at full price. Will this increase distribution? This is directly related to and dependent upon the first issue.

Will it bring more revenue to the publishers? If the publishers are severely cutting the price of an  ebook, there would have to be a tremendous increase in volume even to stay at the current profit margin.  Also, the untapped markets which are in Asia, the Pacific, South America, and Africa do not usually read books in English. Yet, think about how many books can a person read in a month? Certainly, it takes much more time to read a book than to watch a movie.  Therefore, the subscription price of  $8.99 a month may have a high profit margin built in with the expectation that the “unused” portion of the $8.99 will be pure profit.

However, traditional publishers may be doomed anyway as they sutbornly hang on to the business model of the last century. They have been unable to come up with a convincing rationale for why an e-book costs nearly the same as a print book, especially when all the major costs of a print book have been eliminated. The public, especially in parts of Europe, such as France and Germany , is pushing back on price because they see the publishers milking rather that adapting and innovating.  Therefore, the publishers, just n order to stay in the game, will have to drastically cut prices and accept thinner, i.e. more realistic margins.

As the examples with Oyster and Scribd show, third parties, outside the “publishing industry,” are the innovators, and they may be at the forefront of the paradigm change.

H/T TheVerge

Next Week: The ebook at the Frankfurt Book Fair.

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