For years people have been telling the publishing industry to look at the music industry for lessons learned on piracy, DRM and other issues.
eBook subscription services have obviously been one area in which publishing has paid attention, with services like Scribd, Oyster, Kindle Unlimited and others, like the new Readfy service in Germany popping up and expanding their offerings. I’ve been following the growth of reading subscription services, and I do wonder about their long-term money making prospects, which is why I was interested to see two stories cross my Twitter stream this morning.
The first was the announcement that Spotify has launched in Canada. The Canadian terms are similar to the US terms. You can listen for free, if you’re willing to put up with ads, or you can subscribe for CA$10 a month to get rid of the ads and download playlists to your mobile devices.
The second was an article about how streaming still isn’t making money for record labels.
Streaming music has finally overtaken the CD in music sales. But can it be the new business model for the music industry? A new report from the Recording Industry Association of America last week shows that, despite strong growth, sales of streaming music still aren’t making up for sliding sales of both CDs and digital downloads.
Interesting. I wonder if we are in a similar situation in publishing. I’ve heard anecdotal stories on both sides from authors on KBoards (some seeing sales plummet after the introduction of KU and others seeing excellent revenue from borrows), but that’s only the indie side of the story. Almost every voice I read in publishing, including those I generally agree with, like Dean Wesley Smith and those I generally don’t agree with, like Mike Shatzkin, state that the current revenue structure of subscription services is not sustainable, and I tend to agree with them. Another quote from the above article resonates with me as someone who follows the publishing industry:
Streaming, after all, has been the most attractive to power-listeners — as in, the ones who were probably buying the most music anyway.
It’s difficult to find hard data on the profitability of the services, although in May of this year, Trip Adler, CEO of Scribd, did say that the service was making a profit each month.
Music services have been around longer than ebook services, and Spotify clearly thinks expansion is worthwhile. It’s probably too early to forecast long-term health for ebooks. Players do continue to enter the arena, which is a good thing, but so many of the lessons from music are applicable to books.
I plan to keep an eye on Spotify and others to see if those lessons are applicable as well. Like possibly requiring ads, as Readfy is attempting. I don’t know about you, but I dislike the idea of ads inserted into my books. I don’t mind them on the Home screen of my Kindle, but I do mind them within the text. Ads are also the reason I don’t use Spotify (I don’t listen enough to justify the paid cost) and why I don’t watch Hulu.
Anyone else want to prognosticate? The comments are open.