Scribd’s Real Opportunity-It Isn’t Subscription Revenue

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Scribd’s Real Opportunity-It Isn’t Subscription Revenue

Scribd’s Real Opportunity-It Isn’t Subscription RevenueOne of the most talked about developments in eBooks this week was the partnership of HarperCollins and Scribd to sell eBooks on a subscription basis. For $8.99 a month readers can read all the books they want—not just those of HarperCollins but any in the library. (Here are stories from the LA Times, TechCrunch and Time.)

I’ve been a fan of Scribd for a couple years now and regularly recommend it to clients as a marketing tool. Authors and publishers routinely put up chapters or more of their work to expose it to millions of potential readers. The website and its content index well with the search engines so it becomes another way to improve discovery of your writing. With your free account you can view statistics like downloads or views, set a price for your content, and interact with your social network. (Get an account here or visit the Scribd.com home page.)

Is Scribd the “Netflix for Books”?

Let’s see, here are some other companies that have been called the Netflix for books: BooksFree, Oyster, and 24symbols. Each has a slightly different twist but like Scribd they welcome the comparison to Netflix.

And let’s not forget Amazon. Many people forget that Amazon launched a similar program almost two years ago called Kindle Owners Lending Library. Any member of their Prime program who owns a Kindle device can borrow one book for free each month. They don’t have high profile publishers like HarperCollins contributing entire catalogs but they do invest in high profile books such as the Harry Potter series.

Here are 3 questions about book subscriptions in general:

  1. Can they attract enough heavy readers? The Kindle came out in 2007 and was an immediate hit with heavy readers. If they have migrated to Kindle Fire tables then they can read Scribd eBooks (e-ink readers cannot use the service). But at $9 a month readers may decide it is cheaper to buy (technically license) than borrow. Readers will need to read an average of 2 books a month to make it financially worthwhile.
  2. Can publishers make more money loaning eBooks than selling them? If this works like other programs of its kind the publisher is paid based on some agreed to metrics like number of books borrowed and the length of time they are borrowed. Perhaps they also measure how far you read in the book—if you finish only half does the publisher get half the normal rate?
  3. How much selection do you need to keep those subscribers subscribed? Scribd does have the advantage of being a document repository and they have lots of other content readers can borrow for this price.

The Buy-Borrow-Stream Strategy

The bigger opportunity as I see it is being able to sell eBooks that are not part of the program. You use the promise of a free book to attract subscribers but you show them the universe of all eBooks. The Buy-Borrow-Stream strategy is the best way to describe the Amazon Prime Video approach and it’s brilliant marketing.

Their selection of movies and TV programs is okay, but not great. Quite often my family will find something we are interested in but it’s only available for streaming at a cost, or worse for purchase. At this point you’re already committed so you have little choice but to spend the $2.99+ to rent it for 24 hours.

Scribd has a similar opportunity: by showing readers enough books, and making it easy to share those books across devices, they have a shot at becoming a major eBook retailing destination. It won't be through subscriptions but that's okay, its a marketing effort on the way to selling eBooks. If they do that they have the beginnings of an ecosystem that can serve as an alternative to Amazon’s hegemony over eBooks.

Bonus

Are you a publisher with lots of eBooks? You can apply to be part of their catalog by clicking here.
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photo credit: North Carolina Digital Heritage Center via photopin cc

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