Saturday, July 11, 2015

Scribd and Kindle Unlimited Just Changed Their Subscription Models

Urval av de bocker som har vunnit Nordiska radets litteraturpris under de 50 ar som priset funnits (2)
A few years ago, I championed subscription models for books as the wave of the future. Shortly afterwards, they became real. Kindle Unlimited, Oyster, and Scribd all started services offering unlimited reading of a pool of books for a low monthly price. Now that the services have been going for a while, there seem to be problems. Both KU and Scribd announced pretty sweeping changes, and I'm not sure how I feel about them.

For authors, Kindle Unlimited used to have a payment system where we were paid a single amount for everyone who read at least 10% of any book we had enrolled in the service. The amount paid was based on a pool of cash Amazon maintained. The bigger the pool, the more we got paid for each borrow. But some authors complained it wasn't fair, because those with short stories in KU got paid the same as those with novels.

Well, in June, KU announced they'd be changing the payment model. They would start paying authors for each page read, not the percentage read. That means a 5,000-word story earns less than a 100,000-word novel. This clearly works in KU's favor, because it encourages longer books that subscribers will want. It also reduces how much they have to pay out. Some have calculated they could be earning as little as .006 cents per page.

Some people (mainly romance or erotica short story writers) have declared it a disaster. They say their income, based on writing quick stories for maximum profit, will collapse. Also, they point out that children's book authors and non-fiction authors will, by definition, lose out. Some estimate they'll lose eighty percent of their income.

Other people (mainly novelists like Hugh Howey) have declared it a success. He argues that this system works out the same if you write good work. If you write a 100,000-word novel and people only read 10,000 words of it, obviously you'll lose money, but it also means you haven't written a very good book. If you have a 10,000-word short story and ten people read all of it, you've made the same amount. I think that's probably true.

My feeling is this is the Nielsen ratings for books. Never in the history of the world have we as authors been able to see exactly how many pages of our work have been read. Sales are not that accurate a measure of a book's quality. Haven't you ever bought a book because it was a best-selling novel, but never ended up finishing it because you hated it? I know I have. But the author doesn't know that. They just see the number of copies sold and assume that means it's a successful book.

Howey argues the new system rewards authors who write compelling and engaging work. He made a great quote that some authors write like they're "being paid by the pound," because they churn out massive doorstops of books, thinking that the longer the story, the better it is. And they're the ones who complained the loudest about the old system. But I think some of those authors will be shocked to see how few of their readers actually finish their million-page masterpieces, so there will be some rude awakenings. I've often wondered how many of the books I've sold have ended up being unread, because I don't have that many reviews (good or bad). Well, with this new system, I'll be able to see exactly what people think. And if I need to, I'll make changes.

Now let's move on to Scribd. Unlike the Kindle Unlimited changes, I think the changes being made to Scribd's subscription model are just plain bad. If you hadn't heard, Scribd announced in June that they would be removing 80-90% of their romance and erotica books from their service. The reason? Too many people were reading them.

On the face of it, this makes no sense. It would be like McDonald's saying, "Hey, our Big Mac is really popular, so we're taking it off the menu." Or (comparing apples to apples) it would be like Netflix saying, "Hey, House of Cards and Daredevil are our most popular shows, so we're taking them off."

Why is Scribd doing this? Well, I'm not an expert, but here's what I gather. Even though readers are paying $8.99 a month for unlimited access, Scribd has to pay publishers full price for every book they borrow. That means for every copy you read, the less money they make. Scribd has sent a message: "hey, we want you to read, but not that much."

That's seems like a terrible business model. The people who would want to use Scribd the most would be the heaviest readers, which are romance readers. But to stay alive, Scribd wants subscribers who read the least, who would be the least likely to subscribe. This reminds me of insurance companies who drop the sickest people because they use their insurance too much. But we all have to have insurance. No one needs Scribd. So I don't think Scribd will be around much longer unless they make big changes.

But it makes me wonder if the subscription model can actually work. Clearly some readers want them, but can the services afford to sustain them? I don't know. Oyster hasn't announced any changes, so that's good. We'll see how it goes. But for the record, I'm still keeping some of my books in KU.

Of course, there are also those who argue against maintaining exclusivity to Amazon or Scribd or any other subscription models and just stay on the open market, selling your books per copy.

What do you think?

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