Will a flat-fee model by publishers for ebook access work ?

Posted on September 3, 2013 by aviyer2010

An article in the Wall Street Journal (September 3, 2013) describes a proposal by two companies, eReatah and Oyster, to provide a flat-fee access to ebooks. eReatah plans to offer 80,000 titles and offers a $16.99/month for two books or $33.50 for four books a month. Oyster plans an unlimited access monthly rate. But the list of titles is limited by publishers signing up, with Simon & Schuster, Sourcebooks etc being the early collaborators for eReatah. Will books go the direction of music and movies and thus move to a flat-fee Netflix like model ? Will publishers benefit from this new leased book model as a result of incremental revenues for their digital library ? Which of the two models, Oyster’s or eReatah’s, would you expect to win in the long run, and is there room for both solutions in the market ? How will all of these options play out in the textbook market ?

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1 Response to Will a flat-fee model by publishers for ebook access work ?

Gopal says:

September 4, 2013 at 9:32 am

While the business models make sense in some ways, there are some reasons to think that this model is not viable to a high profitability business.

1. Netflix is cheaper than cable and some people switch to binge watching which might not always hold true for books. (I’ve tried to binge read books, its tough)

2. The money comes from the tie-ins with the product. Netflix and amazon have other revenue sources than just the subscription rates and thats what makes the streaming industry profitable. I find it hard to imagine that a company can survive only on subscription. If it needs to do just that, the prices have to be sufficiently high and that creates further barriers to getting customer volumes.

3. The audience(or target market) are innovative and ready-to-experiment people. Evidenced by the fact that they switched to ebooks. This means they will shop around for cheaper ways to read and you cannot rely on people who sign up to stick with you for a long time. And there is no way to tie them into the system if you are eReatah or Oyster.

4. Publishers need to be provided a strong incentive to sign up. Getting more publishers to sign up means higher sign-up costs. However, if you can convince the publishers to give you exclusive access to new releases or immensely popular books, then you have a usp that can be sold to the consumer who’s shelling out a premium.

Regardless of my pessimism, I’m still going to sign up and spend a month or two browsing titles and reading books from different platforms. May the best subscription model work(psst: amazon prime).

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