When Scribd culled its romance catalog a couple months back, I predicted that the ever-popular SF&F category would be the next to go under the knife. I was wrong.
Scribd quietly announced on its blog late Friday night that it is imposing a quota on audiobooks. Starting 20 September, subscribers will be limited to listening to a single audiobook per month, and they will also have the option of buying additional audiobook credits for $8.99.
Scribd also promises that they will offer “a rotating catalog of thousands of audiobooks for unlimited listening” which “are being made available through special arrangements with publishing partners”.
The subscription cost will remain $9 a month, and the ebook access is not being curtailed at this time. Scribd is merely taking steps to make their audiobook catalog less attractive to subscribers. (Scribd wants subscribers to pay $9 to listen to a second audiobook, when you can often buy an ebook+audiobook bundle in the Kindle Store for not much more.)
This is the second time that Scribd has cut back its service in the last couple months, and it is also the second time that one of Scribd’s bold moves has backfired.
Scribd’s first mistake was in signing an exclusive deal with Harlequin and then actively recruiting romance readers in late 2014, only to discover in June 2015 that romance readers inhaled so many novels that they were draining Scribd’s coffers.
Scribd’s second mistake was when they signed a deal in November 2014 with Findaway to add 30,000 audiobook titles to Scribd’s catalog. To give you an idea of how bold that was, Kindle Unlimited had around 2,300 audiobook titles at the time (4,500 now).
As I suggested at the time, KU carried fewer audiobooks because they had a higher unit cost:
I would bet that Amazon launched Kindle Unlimited with only 2,300 audiobook titles because audiobooks usually cost 4 times or more than the price of an ebook. This suggests that an unlimited audiobook subscription plan is simply unsustainable at Scribd’s $9 a month or the KU’s $10 a month.
Both of Scribd’s bold moves made the service attractive to potential subscribers, but they came at too high of a price. Rather than just draw in paying customers, Scribd attracted the type of customer it does not want – those who would use the service as it was intended by consuming as much content as they can.
And that’s a problem for Scribd, because it has committed to paying its suppliers (authors and publishers alike) a cut of the retail price each time a book is loaned.
That is simply an unsustainable model for access-based services of any type, beit ebook, music, or video.
At this point it’s clear that there are two sustainable payment models for access-based services. The first is to pay suppliers a tiny fraction of the retail price, and the other is to limit payments to a finite pool.
Pandora and other streaming music services have gone with the first model, and so has Germany’s Skoobe. (According to Matthias Matting of Self-PublisherBibel.de, Skoobe pays indie authors between 20 cents and 60 cents per loan.)
Amazon, on the other hand, has been using a funding pool to pay authors and publishers ever since Kindle Owner’s Lending Library launched in late 2011.
In light of today’s news, that doesn’t seem like such a bad model, does it?
I mean, on one side we have a service that paid out more than $33 million to authors and publishers in the past three months and generated more income for authors than they earned from the Nook Store.
On the other side we have a service that has had to cut back its offering twice in the past two months.
That’s a no-brainer, isn’t it?