Penguin UK CEO: Readers Don’t Want Subscriptions

Penguin UK CEO: Readers Don't Want Subscriptions DeBunking Streaming eBooks Subscriptions Earlier today Tom Weldon of Penguin Random House UK revealed that PRH would not be getting into the subscription ebook market. Speaking at The Bookseller's Futurebook conference, the CEO for a branch of the world's largest trade publisher said that:

Weldon said: "We have two problems with subscription. We are not convinced it is what readers want. 'Eat everything you can' isn't a reader's mindset. In music or film you might want 10,000 songs or films, but I don't think you want 10,000 books."

Weldon also said the company did not "understand the business model", and who made money. But he acknowledged that subscription could work "in certain markets around the world in emerging economies where access to books and bookshops is extremely limited".

He went on to add that PRH wasn't planning to become a retailer, either, but that's the lesser story today than the fact that a senior manager at PRH offered a completely nonsensical reason to avoid the subscription ebook market.

It's not just that his explanation doesn't stand up to scrutiny; it's also nonsense. One doesn't simply refuse to offer a service because one is "not convinced" that consumers want it.  That is what polls are for, or even better one could always run a pilot test in a small market and let consumers vote with their pocketbooks.

What's more, polling and market studies aren't required to answer the question of whether consumers want this type of service; just keeping up on the news will tell you that they do.

  • If consumers don't want this then why does Amazon keep expanding Kindle Unlimited?
  • If consumers don't want this then why does Bertelsmann (Macmillan's parent company) own a couple ebook services?
  • If consumers don't want this then how has Skoobe stayed in business for the past three years, and why do its publisher parents (Georg von Holtzbrinck and Bertelsmann) continue to invest in its expansion?

That explanation just doesn't stand up to scrutiny.

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder and editor of The Digital Reader: He's here to chew bubble gum and fix broken websites, and he is all out of bubble gum. He has been blogging about indie authors since 2010 while learning new tech skills at the drop of a hat. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.

19 Comments

  1. Thomas14 November, 2014

    I vaguely remember someone from the music industry claiming that customers really, REALLY liked CDs and didn’t want to buy individual songs during the Napster controversy. It’s amazing the hoops people will jump through to try to avoid changing their businesses to fit new situations.

    And, of course, “customers don’t understand our business model.” It might help if publishers didn’t habitually lie about their business model when it suits them. The price of the average book has quadrupled in my lifetime. Throughout the changes, publishers always claimed the price increases were due to increased costs of printing and shipping the books. When e-books started, publishers then claimed that needing to print and ship books wouldn’t lower their costs much!

    Reply
  2. Verena14 November, 2014

    I don’t want a subscription for a single publisher. If there were a subscription that covered all of the major publishers, that I could buy into.

    Reply
  3. fjtorres14 November, 2014

    Their problem is they’re still thinking people buy books instead of stories.
    Not everybody wants to accumulate a library. Some people just read for the experience and the book, whether p- or e- is just the packaging. And for those people subscriptions, even with limited catalogs, are just fine.

    Reply
  4. Rebecca Allen14 November, 2014

    If readers don’t want subscriptions, why are Penguin books available thru the Literary Guild? Which includes what was once called BOMC. Or is the thinking that with pbook club subscriptions shrinking, readers must not like subscriptions in general?

    Reply
    1. fjtorres14 November, 2014

      The subscriptions he pooh-poohs are rentals, not curated sales.
      His core logic is that he believes people want to buy rather than rent.

      Reply
  5. Persncikety14 November, 2014

    Consumers don’t want subscriptions for books, or access to thousands of titles. So why do libraries exist? Given that the model for modern public libraries (as opposed to academic) was the subscription library, this is someone who doesn’t understand the history of his own industry.

    Reply
    1. Nate Hoffelder15 November, 2014

      I was going to mention that, but libraries aren’t quite the same thing. The services looks similar, but consumers aren’t directly paying for libraries out of their own pocket.

      Reply
      1. jafmaw15 November, 2014

        Which is precisely why I personally do not subscribe to a service such as Oyster or Scribd: The combination of borrowing from my library’s e-lending service and purchasing those books my library does not carry was still less expensive than either subscription service for the number of books I tend to read in a given month.

        The subscription model is not compelling enough for my usage pattern.
        Just as bad as the recurring expense of the services is that no service carried all the books I wanted to read in the month I looked into them.

        Reply
      2. persnickety16 November, 2014

        The very earliest public libraries (as in not academic and not the personal library of a wealthy person) were subscription based. And the level of access you got depended on the price of your subscription- there were a range of prices.
        Well into the 19th century they were businesses that provided access to books.
        Although the rise of Penguin (cheap books) probably was one of the final death blows…

        Reply
  6. Daniel Vian14 November, 2014

    Weldon’s ideas are moronic. The evidence is that Kindle Unlimited in the UK is flourishing–so the Brits do like subscriptions. Maybe they just don’t like subscriptions to a single publisher, which is understandable. Who needs a library that contains only Penguin/RandomHouse books?

    Reply
  7. Bob W14 November, 2014

    I think he was very clear, “Weldon said the company did not understand the business model, and who made money” ergo consumers don’t want it. [please, please, pretty please]

    Reply
  8. Fbone14 November, 2014

    Are any subscription service profitable?

    Reply
    1. Thomas14 November, 2014

      I don’t think any of the book subscription services are making money yet. It’s a similar situation to Netflix when it was getting started with DVDs. You’re not going to make money until you can attract some customers who will pay for the service but then only read 1 or 2 books a month. Heavy readers cost more than they bring in.

      Reply
  9. Felipe Adan Lerma15 November, 2014

    This is the same mis-direction as the billionaire (millionaire?) music streaming guy saying Taylor Swift was wrong in not wanting to distribute her music for pennies through someone making good money from artists making pennies.

    Studies I’ve read about say a significant number of folk (myself included) prefer subscriptions in general. Terms and titles available are the details that make one subscription program a deal breaker of choice over another. Just like any other business model.

    I subscribe to both Scribd and Kindle Unlimited.

    Reply
  10. AltheGreatandPowerful16 November, 2014

    One point of anecdotal evidence for big libraries…
    I polled a friend who’s a bibliovore like me… just the non-fiction section of his e-library is 17, 490 files.

    Reply
  11. AltheGreatandPowerful16 November, 2014

    I do still keep bookshelves, but If I had ebooks for everything I’ve bought (or used for school/work/job research) I’d have that many too. I do have a lot of ebooks, in a variety of formats, but not like that. Yet.

    Reply
  12. […] CEO of Penguin Random House UK says readers don’t want subscription services […]

    Reply
  13. […] used consumers as an excuse for avoiding this market. Penguin Random House UK Tom Weldon made a similar argument last November which made as little sense then as Nourry's argument does […]

    Reply
  14. […] Random House UK CEO Tom Weldon might not have understood the subscription business model in November 2014, but that hasn't stopped him from signing a deal to distribute audiobooks to […]

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to top
%d bloggers like this: