By Davy Alba | 01.13.15 | 12:54 PM
On Tuesday, startups Scribd and Oyster both announced partnerships with publishing heavyweight Macmillan to bring over a thousand new titles to their respective e-book subscription services. That means the two startups are now working with majority of the so-called Big Five publishers; both had previously offered books from HarperCollins and Simon & Schuster. The Macmillan partnership grows Scribd’s $8.99-a-month a la carte collection to more than 500,000 book titles, in addition to the 30,000 audiobooks available on the service after Scribd added them late last year. Meanwhile, Oyster says it now offers more than 1 million books to its subscribers for $9.95 a month.
“Having more than half of the ‘big five’ on the service in less than 18 months of running it is, I think, really a testament to subscription being a viable model for e-books,” Andrew Weinstein, vice president of content acquisition at Scribd, tells WIRED.
But while the addition of another publisher is an obvious win for the startups, what’s less clear is why publishers want in. Movie and TV studios can count on ticket sales and advertising dollars even as they offer their content on Netflix. Musicians can still sell concert tickets even if streaming services like Spotify cannibalize CD sales. But for book publishers and authors, the main source of revenue is still selling books. So why would they agree to participate in what amounts to an always-accessible lending library with an infinite number of copies?
Demand for Data
Macmillan didn’t respond to a WIRED request for comment on the deals it made. But publishers seem more than willing to participate in this new distribution model. Beyond the efforts of Scribd and Oyster, Amazon last summer launched Kindle Unlimited, which gives subscribers unlimited access to over 600,000 titles for $9.99 a month.
Scribd and Oyster say publishers do see revenue from making books available on their services—both startups pay publishers a sum of money each time what Weinstein calls “a fair portion” of a book is read. And apparently, people are reading. Scribd isn’t publicizing exactly how many users it has, but Weinstein says its service has seen 30 percent growth month over month. Oyster also doesn’t share its numbers publicly, but a representative says December was its biggest month ever.
The money may not be the real reason publishers are coming around, however. The greatest value of these “Netflix for books” services could be that these startups share valuable reader data, says James McQuivey, an analyst with Forrester Research. Subscription services in other media rarely share information with content producers themselves on how their content is being consumed, he says. “That’s the way [these e-book subscription services] differentiate themselves in the minds of publishers, and convince publishers to join them,” says McQuivey.
Scribd and Oyster confirmed that they do share aggregated information about users’ reading activity. But both companies say they don’t share specifics about individual readers.
How We Read Now
McQuivey points out that in particular, readers of genre literature are valuable to publishers because they typically read dozens of books in a year. Publishers don’t necessarily want to lose this reader to subscription services. But if those readers do sign up, getting them to go with a subscription service that shares data can give publishers an edge: with good data at their disposal, publishers can focus their marketing efforts with more precision.
McQuivey thinks the timing behind publishers’ new willingness to cooperate may have to do with Amazon’s decision to launch its Kindle Unlimited service in the summer. “Publishers could be trying to make sure Amazon doesn’t grow to dominate the space,” he says. The internet retail giant has clashed with the publishing industry in the past—most notably over online book pricing with another top-five publisher, Hachette, a conflict that was only recently resolved.
Ultimately, the promise of more and better data may be irresistible to publishers who are seeking any edge they can find in an industry upended by the last 20 years of innovation. Digital technology has changed the way books are sold and published, but it has opened up new possibilities for understanding how people read, as they read. Can a paperback do that?