Amazon Goes Unlimited

Today, the market is talking about the Amazon offer, Kindle Unlimited, which certainly is a smart name as it aims to do exactly what it says on the tin. It should come as no surprise and it was only a matter of time until Amazon entered the ‘all you can read’ ebook subscription arena that services such as Oyster and Scribd have started to open up.

We have long argued that the subscription model is coming and that it starts to change how we relate to books that now can be effectively ‘borrowed on demand’, without having to worry about collecting them on virtual shelves, kidding yourself that you own them when all you own is a limited licence, and also trying to work out how to pass them on to others, share them, or divide the family collection when a relationship splits up.

The greatest challenge to the subscription market is matching the economic model to the reading habits of the members. The book clubs of old used to force feed ‘book of the month’ and expect a regular purchase, but they were dealing with relatively more expensive books and accepted that many people didn’t read on a regular rate. Importantly publishers often had Book Club royalties written into their author contracts. We now have ‘all you can read ‘models which are based on a flat monthly rate with an open to read offer against a digital library. Book s only earn when they are read and ensuing the definition of ‘read’ is a relatively minor but interesting issue.

Unlike other media subscription offers in music and film and even audio the demand and usage patterns of ebooks are very different. An ‘all you can read’ model may appeal to high volume readers who actually don’t need an incentive to read, or buy books and probably read a high volume of what they buy. It doesn’t necessarily appeal to readers who have a more erratic habit, or who collect ebooks today and don’t get round to reading them. So churn rates will be very important both in the early days and within the subscription cycles and will be probably very high compared to other subscription services.

Amazon launched Free Time in the US some 18 months ago. The service was aligned to their Prime subscription model and offered access to several media forms and importantly was aimed at parents for their children. It is not clear how successful this offer is today, but it did have all the right ingredients and if it were extended to align with Unlimited would make commercial sense. Amazon will have learned a lot from this exercise and obviously have a huge volume of customer information and reading habit data to mine and exploit. Unlimited would potentially give ‘family’ offers which cross media, align with Amazon’s core Prime service and effectively lock in customers. Importantly they will be very difficult to compete with as others would appear one dimensional and limited in their potential. However the economics of such an unlimited cross sector offer would be complex and maybe a bridge too far with suppliers today, but Amazon will have learnt much from Free Time that others have yet to discover.

Amazon has aligned Unlimited to their Lending Library and those publishers and authors who opted for this service channel now are automatically lifted into Unlimited. A smart move by Amazon and one that gives them instant traction with both content and users.

So is there room for Amazon, Scribd, Oyster and will Kobo, Apple and the ailing Nook follow? What will Wattpad do now? Can Amazon extend the Unlimited offer to make it even more compelling with premium offers on audio, film, music and even cloud services?

We just can’t see sufficient market for all players as they are position today and it will be interesting to watch the strategy adopted by others. Amazon’s Achilles heel has often been their loner approach and there are many huge subscription services that could be seen as complimentary for others to align with and thereby protecting themselves from being seen a ‘trick pony’.

What’s in it for publishers? What’s in it for Authors? How do digital distributors such as Ingram respond? How does this impact the public library debate and services such as Overdrive? There are many unanswered questions and we are only at the start of a journey which will have many barriers to negotiate, but we now are starting to see a divide between physical and digital which may prove to be healthy. The books may unfortunately remain the same but the divide between ownership and licence, between buying to maybe read or as a gift and subscribing to consume, an incentive to read more as opposed to decorating physical and digital shelves is now potentially up for change.  

This is a good thing for consumers who read. It could be a good thing for digital media users. It may get more people reading. But there are others within the value chain for which this move has many uncertainties.

Related articles:

Amazon Free Time: Give me a child….    Dec 2012

Subscription Is Coming                                  June 2013

eBook Subscriptions Part 3: The future should be significant        March 2014        

Understanding the Subscription eBook Offer      Oct 2013

Is There a New eBook Club Model?

As ebooks diverge in many different directions we find that we are often still left with the same 'buy to own' business model. We have long argued for ebook rentals not just for libraries, but in general and believe that the market is ripe for a 'Netflix'or 'Spotify' for ebooks.

Ballantine books today have launched a new digital platform 'booquo' and claim a wide range of Castilian ebooks for their Spainish community. The service will be available via a Digital cloud based Library Club on monthly subscription. The cost is reported to be 9.90 euros per month and entitles "a monthly reading of digital books available" and the basic book club. Those who are already members of the book Club, will only pay a fee of 7.90 euros.

However our interest soon waned as we read the usual book club demands that you purchased a book every catalogue and thought what a wasted opportunity. When will the dying breed of book clubs that use the old ‘BCA’ tired and dated model learn?

Imagine, a ebook club which had hundreds of thousands of ebooks, which you could read free on a monthly subscription. If you wanted to buy the book you pay the rate card and it’s yours, if you just want to read it you could do so online. You could be restricted to a small number ‘free reads’ per month and if you wanted more you pay a higher subscription. The service could carry advertising and royalties would be based on loans and advert revenues. It could even be multi media and carry audio, films, music and games.

Some will say that we are dreaming, but I bet we aren’t the only ones.

Bye Bye Book Of The Month

Remember those ‘Book of the Month’ Book Clubs, where you often forgot to send the unwanted title back and then spent an age sorting it out? Bertelsmann were the ‘Book club’ with the leading Book Club services in many countries and a club for every taste.

Today, the once giant club has fallen on hard times and laid the blame on the internet, Oprah, deep discounting and much more. The US Direct Group’s business alone has shrunk by some 75% from its peak. The truth is that they, like many others, thought the end would never come and they had a licence to trade for ever. Today the Direct Group has sold off most of its international subsidiaries, U.S., UK, Italy, Spain, Australia, Asia, and France, and plan to wind up the rest.

Webb bought up the UK BCA business and have proudly declared that they intend to increase sales by 30%, but after all that is easily when the beast is on its back and sales are rock bottom. Najafi Companies, a Phoenix-based private equity firm, have bought Direct Group North America and clubs such as the Book of the Month Club and Columbia House.

So what went wrong for what on reflection was an obvious internet service? After all they understood managing mail lists and direct marketing. They understood the book market and product mix. The had a diverse demographic of heavy book buyers and they did business from the armchair.

The problem was the model which was based on, locking members into buying cycles, dumping a book of the month on members and ‘twigging ‘. Twigging is were one starts with a branch, say History then that twigs into ancient civilisation, medieval, 20th century and so on and these can even twig further. They missed two significant changes; one that readers were becoming and probably always have been eclectic in their reading and secondly depth of range was becoming available in a click through the likes of Amazon. In fact Amazon is the new book club sending you alerts to titles you may be interested in and given you the range at your convience in a one click operation.

The challenges that the old Book Clubs that have not already adapted now face are huge and that is without digital content. However, their skills and ability to rise to the challenge is still possible as they still have a community or communities but will they understand that twigging is for the past? Will they open themselves up to discounting? Will they leverage their huge lists before they become inactive or die? Will they understand how to digitally direct market? Is it possible for them to step forward to take on digital rentals?

In our hearts we want them to change, throw out the old and antiquated business model and practices, but somehow in our heads we fear that leopards don’t change their spots.

Readers Only Need One Place?

ReadersPlace aims to be the social networking site for book clubs, offering global interaction, debate and thoughts about their favourite books. They can web chat with authors live, get reading guides to more than 200 titles including author details and interviews, plot summaries, starting points for discussions and suggested further reading. Of course their will be promotional and discount deal offered at www.rbooks.co.uk.

West Midlands Library Authorities have been part of the pilot helping to develop the site and comes on the back of many innovative new services from Random House.

We welcome this more social engagement with readers and linking authors to their readers in every way possible. Our only comment is that its Random House and what a difference it would be if it embraced more publishers both large and small and all books. At a time when Richard and Judy are being put to rest and a simple twitter from Jonathan Ross can generate a twitter storm and best seller, one questions why its so hard for publishers and retailers to collaborative and embrace an inclusive model and approach? Some would say that its every man for himself and publishers are all after the same sale, but some would suggest the bigger prize is being lost and there are now some big gorillas sitting in the back yard who also don’t understand collaboration.

We believe that if say the major six UK distributors, all of which are owned by the major publishers, actually collaborated to create a joint social network it would probably cover 75% of the UK market and more importantly provide a real incentive for everyone to participate from the authors to th readers and that sales would flow to the deserving but the buzz would be significant. There again we are only dreamers.

Do We Believe In Magic?

We read today the brave words and intent from the new owner of Book Club Associates. They intend to hit the business with a multi tasked hit squad to get it back on target. Reading the report in the Bookseller was like watching an old Sir John Harvey Jones’ ‘Troubleshooter’ programme without the logic and panache. It mentions cutting back on catalogues and more direct targeting and the thought that there are ‘enough areas in which the company could make cost savings without resorting to job cuts’. The basic problems aren’t the costs it’s the outdated model.

We wish them well, but maybe it will be a sad fare-well more than a successful one. Others book clubs of their era have found the transformation too much, too late, too far. The hit squad reminds us of the saying regarding cooks and broth and no matter how many are deployed it’s the focus and mandate that counts.

The BCA model lost its way many years ago and never adapted to the changing consumer and Internet. To day it stand like a dinosaur in the mists of technology, thrashing around and still believing that ‘book of the month’ is a good thing, twigging categories till they become meaningless is wise and introductory offers will always pull them in.

The fact is that the best book club today is Amazon. No book of the month, to remember to return or face an argument over. No twigging, but instead a huge integrated catalogue and clear understanding that heavy readers are by their nature eclectic and always have been. All this and more, and that is without Booksurge and Audible and of course the Kindle.Where there was a gap other capable players such as The Book People have stepped up and stolewn it.

So what’s BCA going to do to compete? The BCA model is built on print punts and buy ins which work on a buoyant market but tend to fall flat and add even more excess in today’s tight market. It is difficult to see the appeal as a generalist and also as a specialist and unless there is a mass closure of bookstores it hard to see it working on the old posted catalogue.

We wait and hope that one of the hit squad can bring some sanity to the exercise.

The Only Thing Wrong with Book Clubs is Our Definition

There is nothing wrong with Book Clubs and one could say that the best examples of these are thriving today everywhere we look. That statement may appear to be incorrect to many as they automatically think of the lumbering old Bertelsmann model and others such as the Good Book Guide. What is wrong is not our opening statement but the definition we all automatically assign to the word ‘Book Club’.

In the past book club was a mail order operation that offered a regular catalogue, individual reviews, discount and that famed and that often hated ‘book of the month’. Just as all catalogue based retailers they offered convenience and selection. One of the greatest mysteries of today was why so many failed to migrate to dominate today’s world?

The catalogue of missed opportunities and errors is long and painful but in essence they just failed to understand or see the need to change their model and when they did it was too little to late.

Today Book Clubs are successful and many new models are appearing. Amazon is a book club, Shelfari, BookRabbit are book clubs, Richard and Judy and Ophra are book clubs, Reading Groups are book clubs. We have to break out of thinking and defining Book Clubs as BCA and then saying that they are dead. This is both naïve and shows a basic misunderstanding of what ‘clubs’ are and the social and emergence of special interest communities that are thriving today.

However, we here this week of the new Progressive Book Club in the US, that is building itself once again on the old ‘buy three for $1 and commit to four more over two years’ model. The other element of the old model being adopted by them is ‘twigging’ (the focusing on a specific genre or even sub genre). Twigging worked well before the Internet and allowed special interst clubs such as the History Club and the many Bertlesmann clubs to flourish, but was undermined by the broader availability and search and discovery of the Internet. It will work today but only if it is built within a wider community and social network offer which is not based on just buying books. Merely selling a specific genre of book without added value is not wise today. Book buyers are eclectic animals and have often wider and diverse tastes, interests and seek this in their reading material.

We wish the new Progressive Book Club well but we also recognise that they are doing nothing different merely following a well trodden route that is already broken.