In late 2013 two upstart ebook companies launched subscription ebook services that were variously described as a challenge to Amazon, a promising rival to Amazon/Apple, and making "Amazon’s model of selling individual books in an online shop look old". Scribd and Oyster charged $9 and $10, respectively, to let you read as many ebook as you like (Scribd later added comics and audiobooks).
Scribd announced on Tuesday that it is killing its unlimited subscription ebook service. As of some time in mid-March, readers will no longer be able to read all the ebooks they want. Instead, they will be issued credits each month for three ebooks and one audiobook of their choice from Scribd’s catalog of best-sellers. Unused credits will roll over to the next month.
The service will still cost $9 a month, and will include access to a nebulous "rotating collection of books and audiobooks handpicked by Scribd editors".
Scribd is spinning the news by explaining that the change will only affect a small group of subscribers ("3% in any given month"), but the fact remains that Scribd gutted its service today.
Is anyone else surprised that it took two years for this house of cards to come crashing down?
I am. Oh, I wasn't surprised that the ebook buffet was closing; I'm just surprised that it took this long.
As many pundits have already explained, both Scribd and Oyster launched their services based on a fundamentally flawed business model. On the one side the companies were being paid a flat monthly fee by each subscriber, but on the other side the companies were paying their suppliers (authors and publishers) the wholesale price for each book read by a subscriber.
In other words, Scribd's and Oyster's revenues were finite and their expenses only limited by the the gluttony of their customers. And to make matters worse, Scribd et al were paying when a reader crossed a relatively low threshold (10%, according to Smashwords).
And now Scribd is effectively chucking the model.
This does not foretell the doom of subscription ebooks, of course. Even though it faces an uncertain future, Kindle Unlimited is still chugging along, and it paid out at least $133.6 million last year to authors and publishers under a per-page-read model (and that doesn't even count the publishers getting the special payment terms).
And let's not forget Safari Books Online (and similar services in the library market), which has been around for over a decade and yet shows no sign of stumbling, or Disney's service.
So no, subscription ebooks aren't completely dead, but the bubble has burst. The market has shaken out, leaving Kindle Unlimited and a bunch of small fry (Epic, Sesame Street, etc) and putting Amazon in a clearly dominant position in yet another digital market (along with trade ebooks, audiobooks, and digital comics).
P.S. Any guesses where Amazon will next strike gold? I'm thinking education, followed by library ebooks.
image by docoverachiever