Digital Books and the New Subscription Economy

Digital Books & the New Subscription Economy

Ted Hill, THA ConsultingMay 2014 - NYC

1

Introduction

Introduction

Will we see a subscription economy

for digital books?

Introduction Focus on:

Consumer fiction & non-fiction Scholarly monographs Professional & technical reference Higher Ed textbooks

Introduction Extensive research

Broad review of current models for digital media 50+ interviews with industry stakeholders Survey of BISG and PCG members Ongoing coverage in the press

Introduction

Our findings…

Introduction

They’re here

Introduction

Or, they’re near

Introduction

Get used to it!

Survey Highlights

Survey Highlights

80% see subscriptions as inevitable

Survey Highlights

84% see a positive impact in next 5 years

Survey Highlights

86% of scholarly presses work with

aggregators

Survey Highlights

65% of professional publishers sell direct

Survey Highlights

33% of textbook publishers see

very significant revenue today

Survey Highlights

(Only 7% of trade publishers do)

Dominant Models

Dominant Subscription Models

Purchase for Perpetual Use

Dominant Subscription Models

Rentals, Pay-per-Use & Short Term Loan

Dominant Subscription Models

Paywall Access

Dominant Subscription Models

Freemium & Open Access

Dominant Subscription Models

“The market drives the model”

Dominant Subscription Models

SelectionPurchase

Use

Market drivers:

Dominant Subscription Models Selection

Who chooses? How important is the breadth and depth of the

collection? Purchase

Is the money spent by the reader or someone else? Is there competition from lower-priced alternatives?

Use: Does the reader need whole works, or just parts? Is it important to “own” the digital works or have long

term access?

Dominant Subscription Models

Access vs OwnershipPrice Sensitivity

Breadth vs Depth

Additional factors:

Dominant Subscription Models

Dominant Subscription Models

“The market drives the model”

Four Markets

Consumer Publishers Amazon Prime/KOLL, Audible have been with us

for a long time Some publishers already in the game All publishers know they must reach digital

readers who subscribe to other forms of digital media

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Consumer Publishers

Impact of “Netflix” model

Scholarly Presses Slower adoption of ebooks Bigger players already selling direct access to

collections Established and newer aggregators are offering

more choices to librarians

Scholarly Presses

Library budget process

Professional Publishers Early migration of database reference titles Many have tradition of DTC marketing How to meet the changing needs of information

workers?

Professional Publishers

Integration into workflow

Higher Ed Textbooks Student preferences for print over digital are at a

tipping point Rentals (digital & print) are a major part of the

business today For many product lines, publishers see

Integrated Learning Systems as the future of their business

Higher Ed Publishers

Migration to learning platforms

Open Issues

Open Issues

Customer & publisher acceptance

Open Issues

Degradation of high value markets

Open Issues

Will emerging channels increase revenues?

Open Issues

Direct-to-consumer vs

3rd party aggregators

For more information…On Sale June 2014

Buy your copy today at:BISG.org

Thanks!

ted@THAconsulting.com