Can a subscription service ever afford romance readers?
In the space of a month, Scribd dropped over 70% of the romance catalog and Amazon retooled the way it paid authors under the Kindle Unlimited program. Both Scribd and Kindle Unlimited’s movements signaled (to me) that the cost of romance readers was too damn high for these subscription services. Amazon was able to adapt by paying authors less (and I suspect that KU payments will continue to decline overtime) but Scribd’s response was to cut the part of the membership body that was bleeding them money.
For under $10.00, readers got unlimited access to a huge catalog of romances. Scribd paid essentially a full royalty for any book read past 10%. For a book that was $3.99 or more, Scribd would lose money on any reader who accessed more than four books a month because it’s monthly subscription was $8.99. (Assuming 60% royalty, four books would equal $9.58 paid out for one reader).
According to one Pew poll, the typical American reads five books a year. A 2011 Library Journal study pegged the Power Patron as those who log more than 47 books read per year as opposed to the 27 read by the average patron. The Power Patron would check out just shy of four books a month making a Power Patron as someone whose cost would likely just exceed the $8.99 subscription price. Just exceeding the subscription price, however, would be offset by the typical American reader who would only borrow 5 books a year.
The problem is that the average romance reader consumes far more books than 4 books a month. Some romances readers can consume 4 books a week. I read about five D.B. Reynolds books one week. There were also a number of serials on Scribd that I was happy to access and read but would never have purchased because the cost would have been more than I wanted to pay for a single book. And for Scribd, serials probably were an even greater cost. Individually priced serial releases of 8,000 words probably resulted in one “book” exceeding a subscriber’s fee. I suspect serials were a big reason that Amazon moved to paying a per page price instead of a per download price.
In sum, romance readers were on a pace to break Scribd. (How they will deal with comic readers, I don’t know).
Since Scribd moved away from romance readers, I kept thinking about the price point. Is there a price point at which a service could provide a full royalty to authors and still be benefit to romance readers? Probably not. I spent $50.00 last month on 13 books but I read far more. I have a KU account and the benefit of free books. Despite reading fewer books last month due to other things, I still read about three a week. That’s one Scribd subscription a month.
While I’d be willing to pay $50 to have access to anything I want, I have a hard time saying $50 per month for a limited library. Even before the Scribd dramatically cut its offering, there were still several books I wanted that weren’t available on Scribd. Even if Scribd offered a tiered payment service, how many people would take them up on this?
$9.99 is the anchoring price point for streaming services. Netflix is $9.99. Hulu is $7.99. HBO Go is the most expensive option at $14.99 a month. Hulu has an interesting pricing system. It’s $7.99 and then they have “premium add ons”. The only one is Showtime for an additional $8.99. For music, Apple offers a $9.99 individual subscription and $14.99 per month for family access.
Getting anyone to pay more than $14.99 for books is unlikely.
The only other option for a subscription service is to pay the creators less. Amazon changed the way it paid KU authors from per download to per page read. The amount authors are expected to receive per page is approximately .0056. Netflix licenses content for a fixed fee and it’s suspected that Amazon does the same for the Amazon Prime movies. It’s not feasible for subscription services to pay per download. Subscription services for books are likely stymied by existing contracts between publishers and authors. For individual self published authors, a potential solution is to offer a per book flat fee, i.e., $100 per year to offer a book for unlimited downloads. Unfortunately, I don’t foresee this happening in the near future.
And I wonder whether anyone but Amazon is going to be able to afford offering a subscription service to romances readers. We just consume too much.