In occasion of the conference Digital library – la biblioteca partecipata held in Milano on 12th-13th March, the session “E-book subscriptions: a debate between publishers and librarians” gathered a panel of publishers, distributors, librarians and experts from the book sector discussing the impact of subscription models on the Italian e-book market.
The scenario: e-book subscription trends
Cristina Mussinelli from AIE chaired this event where different stakeholder categories from the book environment shared their view on the future trend of e-book subscriptions. After introducing the session, she mentioned the main subscription platforms operating in the e-book sector and then left the floor to several renowned panelists who debated the main issues, opportunities and threats of such services.
Prof. Gino Roncaglia from the University of Tuscia opened the panel outlining the current scenario where flat subscription models (i.e. access to all the available titles) are dominating. In fact, although publishers proposing a targeted e-book selection based on bundle subscriptions may benefit from the diversification of the offer for specific market niches and audiences, the majority of the existing services limits its supply to the highest number of titles possible in order to cover the widest market share.
Not to be underestimated, social reading functionalities may boost readers’ participation to the subscription ecosystem. However, Roncaglia’s general impression was that we need to wait for further data based on a long term market analysis in order to evaluate the benefits brought to the supply chain by these access models: while for single title sales publishers can still count on strong readers that buy many more books than they can read, subscription services redistribute fees according to the actual consumption of e-books. For instance, in the case of Kindle Unlimited publishers’ royalties do not depend on the mere access to the e-book, but on a reading threshold that users have to reach. This is one of the most disruptive changes in the revenue stream that the publishing industry should be aware of.
Subscription models: Darwinbooks, Pandoracampus, LEA and MLOL
As far as the actual implementation of subscription models, Andrea Angiolini presented two different services provided by the academic publishing company il Mulino: on the one hand Darwinbooks, offering monograph bundles accessible to academic students and professors through the university library system, in line with traditional academic subscription services; on the other hand Pandoracampus, the test-bed of a model untypical for the academic sector. Pandoracampus is a multi-publisher e-learning platform providing e-textbooks according to flexible licensing schemes: users can access either to single chapters or to the whole textbook or to course-packs only, optionally selecting the bundle with the print version. Access period and renewal mode (either automatic or on demand) are also adaptable to students’ need, said Angiolini, in order to keep the pace with the changing profile of the market: while a fixed, “vertical” model fits well with institutional users, an “horizontal”, customized approach could be the road to reach private customers. But the two of them can be combined, for instance integrating the access to Pandoracampus within university MOOCs.
Moving from the academic to the trade segment, Lia Di Trapani described the experience of LEA initiative (whose acronym can be translated into “books and more”) by the non-fiction publishing house Laterza. LEA will be launched soon in 2015 offering a monthly or yearly subscription with unlimited access to the whole catalogue of e-books included in the service. Currently, 500 titles are available for 800 beta users that will be testing the platform until October. While planning to release 30 titles per year, Laterza focuses – argued Di Trapani – on appraising the value of the publisher’s catalogue and on maintaining the identity of a historic publishing brand with a service that can be managed independently from third parties. Authors and readers will be directly involved by interacting with each other through comments, notes, audio and video posted on LEA platform, and special features for “augmented reading” will be available as well as extra contents for registered users.
A representative example in the library world is MLOL – Media Library On Line, the first Italian network of digital public libraries comprising more than 4,000 Italian libraries and available also in Australia, Belgium, Canada, Japan, Slovenia and Swiss. After reporting the data on digital lending in 2014 (340,000 users and 200,000 loans in a total of 3m e-book lending volume), Giulio Blasi took the occasion to announce the release of MLOL Plus planned for late 2015: in addition to the current e-lending service, MLOL Plus will run a consumer channel for library users featuring a wide e-book collection available both in streaming and for single copy purchase. Part of the monthly subscription fee will serve the participant libraries allowing them to collect extra funding for further developments of their e-lending systems.
By exploiting the library assets, i.e. users data and e-lending data, MLOL Plus will experiment an aggregated offer of library and commercial services.
The publishers: opportunities and criticalities
Coming to the very hot topic, the panel hosted four publishing companies supporting their favourable or adverse opinion about the participation to “all you can read” services, taking Kindle Unlimited as the most representative mass market example.
Fabio Di Pietro from the publishing house and book store Feltrinelli pointed out that people are more and more used to perceive subscription services (often in streaming mode) as the natural mean for digital content consumption. Considering that the e-book product per se may have technical barriers (DRM, vendor lock-in, lack of interoperability among file formats etc.), opting for subscriptions seems a viable solution for the readers. But from the publishers’ perspective, the risk that such options disrupt the economic balance of the book sector is real, therefore for the time being Feltrinelli is not participating to KU. If on the one hand Di Pietro didn’t endorse protectionist measures against technological innovation, on the other hand he believes that a sustainable solution for the whole value chain has to be found.
The polar opposite was represented by Giunti publishing house, with Bruno Mari arguing that “the logic of the publishing ecosystem can successfully work only with a full integration of print and digital products; we don’t have to fear the opportunity that new services are bringing”. Furthermore, added Mari, the experience in the US reveals that digital contents have not deprived traditional distribution channels of any significant market share: only a fourth of the total book sales amount has been replaced by digital only products. All things considered,Giunti decided to participate to MLOL and to Kindle Unlimited in order to take the occasion of further visibility and to open a new revenue stream that is bringing good results to the company.
Back again to caution, Alessandro Magno from GeMS publishing holding has been more careful in evaluating US data, suggesting to wait for more evidence: while in the academic sector the subscription model could work, it is too early to get significant feedback from the trade market readership. Of course the decrease of e-book piracy caused by the adoption of this model is a positive externality, not to mention that for compulsive readers subscriptions are a convenient opportunity, monetarily speaking; nonetheless, echoing Fabio Di Pietro, Magno considered all the possible risks for the sustainability of the supply chain, and GeMS is not participating to KU.
Mondadori group position has been expressed by Sandra Furlan: besides being in line with the approach of the main Italian publishing groups like GeMS, Mondadori is planning to release its own subscription service, thus positioning as independent player. Furthermore, considering that the company’s aim is to revitalize the catalogue working on long seller titles, adopting an external solution does not fit the current objective of the group.
In conclusion, although the discussion refers to the Italian market, it must be said that the overall positions look very similar to those expressed at international level.
The e-book platforms: services and trends
Apart from being a strategic node for the technological development of the supply chain, distribution platforms and on line stores play a role also in the process of defining the business model of new services.
In the case of Edigita e-book distribution platform, Renato Salvetti announced that a technological solution to support subscription services for libraries and publishers will soon be released, allowing each player to provide a customized proposal (for instance special offers for specific audiences). This operation aims at equally involving all the actors of the e-book sector leaving room to small-medium publishers, without restricting the field only to the major international companies that follow the mass-market logic.
Marco Ferrario from Bookrepublic distribution platform and e-book store, observed that services like Scribd based on Web apps and cloud readers are more focused on the reading experience rather than on the commercial offer: unlike in the case of traditional e-books still presented as “closed” product, the WWW experience drives users towards direct access to content, thus leading to new business models like the so called “native commerce”. He took Aerbook as an example that can be exploited by the publishing industry: by linking purchase options into social channels publishers can connect to their readers without any intermediary, thus extending their proposal.
The libraries: competition or collaboration
Despite the fact that libraries have always been perceived as the most traditional player in the book value chain, they are now showing innovative verve with respect to the new opportunities offered by digital business strategies.
Speaking on behalf of the North-West libraries consortium, Gianni Stefanini reflected on the sustainability of the existing library infrastructures, that need to disengage from traditional service models still more onerous than digital solutions. Moreover, libraries should preserve their cultural initiatives and the active participation of the users as added value assets, in the same time integrating their services in the Web in order to avoid competition and establish a fruitful dialogue with commercial providers.
Regarding the print vs. digital conundrum, Pieraldo Lietti from Brianza Biblioteche remarked that libraries infrastructures are not ready yet for a complete replacement of print with full electronic resources, since the impact of this massive change cannot be sustained by the library system that is supported only by public funds. Apart from that, Lietti highlighted the importance of protecting the so-called “bibliodiversity”: while commercial players are compelled by competitive logic, libraries allow for a diversified offer by aggregating contents from different platforms. But of course the synergy built around the library services can be achieved provided that no monopolist players (like many fear Amazon will become) dominate the whole market.
Open debate: painting a future of cooperation?
In the lively discussion that followed the session publishers further clarified the lack of sustainability of subscription models as currently implemented in the trade segment: for instance the fees set by Amazon, that is benefitting from its dominant position in the market, prevent publishers to achieve profitability because of the low margins; as a consequence, publishers seeking to avoid the devaluation of their catalogue try alternative paths tailored on the specific readership targeted by each company, like in the case of Laterza platform.
In this context, solutions like MLOL Plus are a clear opportunity to join forces and build an alternative model that could fill a market gap in the Italian book sector: while tracking access and usage data of the existing services in order to capture their evolution, the final impression is that the potential competition between commercial channels and services for public reading can be overcome only by partnership and cooperation within the industry.