Can subscriptions take the heat?

Can subscriptions take the heat?

'Yes … it was a long day. Full of complete and utter nonsense.'

That's the author Hugh Howey writing about Wednesday (1st July). That's when Amazon's Kindle Direct Publishing (KDP) Select payout structure officially changed. It was a per-borrow plan. It's now a per-page-read plan. Howey, no stranger to post-apoc poesy, was less than impressed with the run-for-your-life! reactions of many of his fellow writers. Lots of them, it seems, staged a distinctly melodramatic reaction to the change. In The Great KU Flip-Out of 2015, Howey writes:

It’ll be fun to tell our kids where we were when KU 1.0 turned into KU 2.0. We’ll tell them how in the aftermath we roasted rats and pigeons over upturned and burning cars. How we tended to the wounded, finishing off those we knew would not make it. How we drank our own urine in order to survive. How the blood-red moon set over a charred and ruined landscape. Yes … it was a long day. Full of complete and utter nonsense.

And, of course, it was also on Wednesday that many writers were getting to grips with the news that Scribd had begun making what Smashwords' Mark Coker called its "purge" of romance titles. That self-defensive move was caused, we learned by what Scribd c.e.o. Trip Adler called "such a passionate, voracious audience of readers" as romance fans.

In essence, the fitness center was being overrun by a membership that management didn't expect to show up. (And yes, many asked how Adler's administration could have failed to foresee the romance readership's avid levels of activity.) Scribd pays something like a full retail price each time 10 percent or more of a book is read. And its monthly subscription is $8.99. So if an avid romance fan reads even two books per week that might sell normally for $3.99 each, then she or he has eaten up his/her monthly allocation of borrows in a single week. And many romance writers read more than two books in their genre per week. 

Digital Book World's Rich Bellis would write

For some industry insiders, Scribd’s apparent difficulty sustaining its subscription-based model for romance ebooks is a vindication of long-held skepticism. For others, like Coker, it’s a more direct blow to business—or as he puts it, “It’s ugly.

And INscribe Digital's Anne Kubek, executive vice-president and general manager, would write:

Scribd is implicitly acknowledging that their service has in some ways grown too successful to maintain at status quo...Subscribers are signing up and readers are reading – that’s the good news.  But we know that it’s highly likely there will be more changes ahead for eBook subscription services. Some companies simply won’t have the financial funding or runway to last. Others may not have the right selection offering, pricing or user experience, and will have to evolve or perish.

So is this subscription-a-geddon? Or is everybody just crazy from the heat?

That, in essence is our question for you in #FutureChat this week. Which moves look sensible? Which moves look like panic? And what do they mean?

I'll do a quick look at reactions both to the Kindle KDP Select changes (affecting only the exclusivity-bound Select enrollees, remember) and to Scribd's romance-targeted efforts. 

Then we want to hear from  you. 


This story was written as the walkup to our live #FutureChat of 3rd July. Join us today and every Friday for #FutureChat live on Twitter at 4:00 p.m. London (BST), 3:00 p.m. GMT, 5:00 p.m. Rome (CEST), 11:00 a.m. New York (ET), 10:00 a.m. Chicago (CT), 9:00 a.m. Denver (MT), 8:00 a.m. Los Angeles (PT), 5:00 a.m. Honolulu (HAST).


Kicking KDP

KDP Select authors had an email from Amazon saying that there were some 1.9 billion pages read in June as a guideline. Looking at KDP Select Global Fund totals of "at least $11 million," specified by Amazon, the authorial hive-mind worked out that June's tally of pages count could mean that a page would pay about $0.0058. This would suggest that an author would need to have every page of a 220-page book read by a subscriber, in order to make the same $1.30 that last month could be had when a reader needed only to read 10 percent of the same book. 

As Michael Cader at Publishers Lunch noted along with many of us, however, there's no way to know what the actual rate per page will be for a given month because of "Amazon's procedure of determining the final pool size after the month of reading/downloading has transpired." Not until mid-July, for example (as confirmed by Amazon), will the amount of June's actual pool be known but it, like the Global Fund amounts in July and August, is expected, Amazon reported, to at least $11 million.

But in the erotic sector in particular, calls went out to "pull out" (yes, the choice of words was noted more than once) of Kindle Unlimited. At the author Selena Kitt's site, a post asked itself, rhetorically, "Aren't you overreacting?" Kitt wrote:

Yeah, losing 50-70% of my erotica shorts income? I’m mad. Erotica authors are awesome. They provide you with some great, fun, thrilling, and let’s face it, damned hot stories to get lost in – they deserve to be paid for their work. Don’t you think? I really don’t think a short story’s worth should be judged by the time spent reading or writing it. O’Henry would be appalled by this new system. Plenty of people pay a hefty ticket price to ride a roller coaster. That only lasts minutes. The length of something should not determine its worth.

And Howey had some cogent points to make to those who would listen, including:

His own dashboard information from KDP showed that by Day Two (Thursday) at 7 a.m., he could see a 60-percent of the previous day's activity on his titles already accounted for, indicating to him that the reporting system's newness may have been a factor in the first day's perceived low performance.

The new KENPC or Kindle Edition Normalized Pages Read formula, which standardizes pages for the count at Amazon, was looking generous. "A 300-page work can come out to over 600 pages, as measured by the new system."

It will be some time before the new system stabilizes and authors can tell sensibly whether going into Kindle Unlimited is the right move.: "You know what? I might take an entire day to make that decision. Hell, I might take a week. Or even a month! And I might try to take a deep breath somewhere in there, and think about this program for what it is, and not what it used to be, or what I wish it were, or equate it with retail, or pine for a program that can be gamed and provides a worse experience for readers."

You could see the level of hostility he encountered for this viewpoint when, in comments, he ventured to a reader:

The total share of the funds is still getting paid out. Only now, it’s based on reader satisfaction, rather than people being able to game the system. If your income goes down, someone more deserving is seeing their income go up.

And he got back from another reader:

Did you really just say that? I used to have respect for you… that’s gone now. How dare you say that authors who have been busting their balls to make a living at this career that they are not deserving!

I write romance, have been making a decent income since 2014, not spectacular by any means but my readers love what I write and yet because my income is set to go down in KU 2.0 I am not worth shit?

Sounds like she's talking to a journalist like me, right? Not what a favourite son of the self-publishing realm usually hears, as Howey, himself, would come back later and concede. "Holy heck, I haven’t seen this much vitriol over an Amazon move since … the last time Amazon made a move. I’ve got people on Twitter telling me to go *&#@ myself, you entitled piece of &@$%, and things normally reserved for authors doing Twitter PR."  

The advent of the changes at Amazon revealed deep divisions among independent authors, lots of the condescending and entitled tone too frequently associated with selfpubs, profound alarm, and a lot of turning on each other, an indie-eat-indie dynamic that might appear to ratify some outsiders' dim view of the sector.

Howey would write to one comment writer who complained: "I’m getting attacked from all sides, including in private FB groups. People are freaking out before they even see if their income is going to be affected. And people are spreading FUD that may harm careers if listened to. I don’t see a lot of people countering the FUD with reason. And yeah, I’m worn out from it all. It gets to me. I’m just a person, after all. So that’s two heavy hearts. Hope yours feels lighter soon."

Scoffing at Scribd

Much of the commentary on the Scribd move to limit romance titles — as editor and frequent #FutureChat voice Carla Douglas would note — has seemed to be comparatively level-headed when heard alongside the howls about KDP Select. Based in a corporate setting nowhere near the magnitude of Amazonia, however, a more orderly debate doesn't guarantee a happier outcome. 

While many have been oddly slow to grasp the context here, this first major blowout in the subscription services' VC-fed buoyance is deeply serious, not least because a fast change — quick! let's charge by the page, not the borrow — isn't easily instituted in these settings.

At Nieman Lab, Laura Hazard Owen was watching the Scribd announcement and the debate that followed, and wrote

Scribd can’t afford to keep paying publishers the retail price of a book when so many people are actually, well, reading the books. If the hope was that ebook subscription services would be more like gym memberships — where people pay but then don’t go — romance readers have turned the model on its head by using the “gym” too much. That means Scribd might need to find a new business model, or enact a tiered system where users who read more pay more.

But that would make it less like Netflix and more like Netflix’s failed and widely mocked Quikster, which would have split off Netflix DVD rentals into a separate paid business. “Consumers value the simplicity Netflix has always offered and we respect that,” Netflix CEO Reed Hastings said in admitting defeat. Scribd’s primary value proposition is offering a big pool of content for a set (and low) monthly price. As it becomes more complicated, it may also become less attractive.

And, in fact, Owen speculated that (as with so many things in the digital dynamic), it's the intermediary who may need to go: "it is possible that a middleman model doesn’t work well for ebook subscriptions. A book publisher could offer a subscription service on its own, including just its own titles."

While at INscribe Digital, Kubek's article works toward the center, trying to take the measure of Scribd's honeymoon-ending dance with romance:

We don’t agree with those who are preemptively calling this the death of eBook subscriptions. Instead, it is ​a​ repositioning – something that we expect to see a few times before subscription services realize their full potential. Staying in the game will require tweaking the model, as Scribd has had to do. New options for subscription services could include tiered pricing for consumers, perhaps according to the volume of books a customer reads, or how soon consumers can access the best or most relevant content after publication date. As subscription services modify their author payment models, publishers could also create tiered pricing for subscription services, just as they have profitably created tiered pricing for libraries.

Heard from so many parties this week, the idea of tiered pricing seems a leading concept in the responses to the kind of stress encountered by Scribd. 

Kubek offers a white paper on the pros and cons of ebook subscription services for authors that might be of interest to many in our FutureBook community. This document's analysis proposes that the sort of retail-price-based subscriptions like Scribd are the better option for writers than the shared-pool payouts of a programme like Amazon's KDP Select loan schemes. 

And Kubek concludes:

We don’t agree with those who are preemptively calling this the death of eBook subscriptions. Instead, it is ​a​ repositioning – something that we expect to see a few times before subscription services realize their full potential. Staying in the game will require tweaking the model, as Scribd has had to do. New options for subscription services could include tiered pricing for consumers, perhaps according to the volume of books a customer reads, or how soon consumers can access the best or most relevant content after publication date. As subscription services modify their author payment models, publishers could also create tiered pricing for subscription services, just as they have profitably created tiered pricing for libraries.

And we'd like your input, too. 

Are you personally affected by this week's changes in these major subscription systems?

Whether you're engage in one or more of them, what's your take on Scribd's move to curb romance and on Amazon's action in switching to per-page payouts?

See you in #FutureChat.


Join us today and every Friday for #FutureChat live on Twitter at 4:00 p.m. London (BST), 3:00 p.m. GMT, 5:00 p.m. Rome (CEST), 11:00 a.m. New York (ET), 10:00 a.m. Chicago (CT), 9:00 a.m. Denver (MT), 8:00 a.m. Los Angeles (PT), 5:00 a.m. Honolulu (HAST).

Main image - Pixabay: Geralt