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Brett Sandusky at Digital Book World has an interesting write-up on digital subscriptions. He ruminates on the pros and cons of two different models: the ‘modular’ subscription, where customers subscribe to one thing at a time, as they wish, versus the bundle model, where customers pay a fixed amount for a package deal which includes the content they want, plus other stuff which they may or may not want (for instance, when you purchase phone service just to get a cheaper deal on the Internet and cable).

Sandusky prefers the ‘modular’ model. He aims to treat his customers like grown-ups who know what they want and can choose to purchase it. But I think he is missing a counter-argument here. There is something to be said for bundling of a certain nature—not necessarily the ‘you must purchase a landline just to get cable’ type, but the all-you-can-eat approach of services such as Rhapsody or Netflix. One of the things I like about Netflix (which is a streaming-only service here in Canada) is that once I’m in, I’m in. I can watch whatever I want to. There is no nickel-and-diming like there is with the iTunes rental service.

We can access both Netflix and iTunes off our Apple TV box in my house, and a few times, we’ve wandered over to the iTunes area to check out the new releases. If we wanted one, one click could get us the movie on the spot. But there would be a corresponding charge to my credit card that, while small, is still a charge. So invariably, we say, “Maybe, but let’s see what’s on Netflix first,” and then once we hit Netflix (which has already been paid for with one simple monthly charge), we find something and watch it there.

Contrast that with magazines. I used to be a Zinio customer (before their app got so annoying that I stopped), and I had to pay for each subscription individually. A modular model, as Sandusky calls it. Now that my subscriptions are all running out, I keep getting renewal reminders. It’s $11 here, $9 there … and I can afford it, but I just don’t want to. If Zinio came in with some sort of Netflix-esque buffet model, I might be more inclined to give it another go. I could pop in every month, download a magazine or two, and enjoy. No pestery renewal notices, no keeping track of what expires when. Some months, I may read ten magazines. Some months, I may read only two or three. Wouldn’t it be nice?

Or take Sirius Radio as another example. I remember spending years collecting individual CDs, and then ripping them to iTunes years later, sorting them, organizing them and so on. But I only listened to a tiny fraction of the music that was out there because if it wasn’t in my limited little collection, I couldn’t access it. The Beloved just got a new car with Sirius radio in it, and it’s a much better system. All the songs he wants, plenty to choose from, and a monthly fee that’s reasonable enough he doesn’t mind it much. Artists he or I would never otherwise listen to are now getting a share of our entertainment pie—we might not have bought a whole CD from them, but a little slice of the Sirius financial pie, to which we now contribute, goes to their benefit. Why would that be a bad thing?

I am frankly surprised none of the publishers have tried something like this yet. I think it could be profitable. This is how gyms work, isn’t it? A tiny fraction goes every day and uses the facility to its fullest and becomes a loyal gym-goer. But then the great unwashed masses pay their fee and only come a few times, and they subsidize the whole business for everybody else. So if you could get some OverDrive-esque platform going that worked on every device, and you priced it low enough so that every e-book buyer would sign up, you’d get a tiny fraction of heavy readers who would read a a lot, and a vast majority who are happy to pay their small monthly fee and download only a few. They would subsidize the whole business for everybody else. And the profit pie would be huge because you’d have so many customers.

Thoughts?

 
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