‘The Spotify for Books’ hasn’t worked yet. Here's why.

‘The Spotify for Books’ hasn’t worked yet. Here's why.

No term garners more collective trepidation from the publishing industry than ‘the Spotify for Books’. From Oyster to Scribd, and Flooved to Entitle, countless outfits have professed to be on the brink of disrupting the world of books. So why have none achieved the runaway success of Spotify? Is the publishing industry fundamentally unsuitable to a model of unlimited consumption? Many would have you believe so. In reality, whilst the term has inevitably been overused, it has also been misused. This has paved the way for widespread confusion regarding business models and in many cases, unnecessary reticence from publishers.

We now live in a world increasingly skewed towards models of access over ownership. Blame the millennials if you must, but the reality is that we largely don’t actually need to own content that we consume either partially or fleetingly. And therein lies half of the explanation - the model just doesn’t work for books that are voraciously read cover-to-cover. In short, the Spotify model is less suitable for trade publishing. A bold statement, certainly, but one that has been shown to be true time and again.

The advent and subsequent decline of Oyster and Entitle were two widely publicised examples. When the platform adopts a ‘threshold’ royalty model that essentially hedges a bet of limited usage, they always stand to lose with fiction titles. Indeed, this was even the case with Scribd, who nearly went bankrupt when faced with ‘super users’ who consumed romance titles at a huge rate, thus incurring prohibitive costs for the platform that were not nearly covered by subscriber fees. Only earlier this year did Scribd open up a complicated new offering of an ‘unlimited’ subscription, but one with rules in place to ‘throttle’ exceptionally high usage. A similar tack to the mobile data providers of Vodafone or Verizon, but a far cry from Spotify.

So what of academic publishing - ‘the Spotify for textbooks’? Well, it’s no cakewalk. Flooved were one of the first players in this space in 2011 when they used the moniker in their marketing outreach. With textbook prices having supposedly grown by 847%, the consumer demand for universal access at a monthly subscription price was beyond question. So why did Flooved quietly pivot to open access content in 2015? Simply put, they realised that they needed a critical mass of frontlist content from all of the major publishers, which proved almost impossible to achieve.

But why was locking down the supply of content so elusive? In a word, timing. With academic publishing turning huge profits, there was widespread reluctance to turn to an unproven digital platform that could theoretically cannibalise a well-oiled sales machine. Whilst enormously appetising for the consumer, the comparison to Spotify has proved detrimental in getting this model the traction it deserves in academic publishing. It raises fears of authors being squeezed financially in similar ways to recording artists, despite operating on completely different royalty systems.

Increasingly, there are whisperings in the industry (admittedly in amongst many doubters) that we’ve reached an inflection point. The last year was tumultuous for swathes of the academic publishing industry, and this was widely publicised. In turn, there has been an unprecedented upheaval of senior management at nearly all major houses. With Annie Callanan moving from ProQuest to Taylor & Francis, and Daniel Ropers moving from Bol to Springer Nature, a line is seemingly being drawn in the sand. Digitally-minded execs are coming in with a theoretically broader acceptance of subscription models. The advent of Cengage Unlimited this year has really flown the flag for subscription, with c.e.o. Michael Hansen even going as far as to say that there was a need to “revolutionise an outdated textbook industry model”.

Whilst this is a great step in the right direction for getting the model the traction it deserves, it raises a wider point. In the same way that no consumer wants a Netflix just for Miramax films, the consumer is equally publisher-agnostic in their appetite for a subscription service for academic content. Essentially, a relatively simultaneous ‘leap of faith’ is required from the major publishers to back the aggregator model with frontlist content. Crucially, for this to be practicable, it has to happen without the large-scale upfront purchase of rights, instead relying on a fair payment of royalties based not only on consumption, but also factoring in the publisher-set value of the content.

Timing, of course, isn’t enough on its own. There is a two to three year window whereby an aggregator subscription for academic e-book has the chance to capitalise hugely. Even with receptive major publishers, the user experience provided by the aggregator platform is of paramount importance. To draw a fair comparison with the music industry, major record labels initially engaged with the Spotify model largely to claw back revenue from users who simply downloaded pirated content. By making the experience on Spotify seamless and bringing accurate recommendation of content to the fore, it coaxed across users tired of the time-intensive process of getting the right content from torrent sites. In parallel to the music industry of the early 2000’s, if the distribution model is broken, piracy will be the direct result. With one major publisher privately reporting an estimated 31% loss of revenue from piracy in 2017, this is clearly a problem that needs to be addressed. Consequently of course, the aggregator platform must also guarantee the security of content. This has been best achieved by aggregator platforms streaming content to users directly, thus removing the chance of piracy further detracting from publisher revenue figures.

There is a common misconception that anyone looking to create the ‘Spotify for books’ must be looking to replace the print market. Quite to the contrary, the greatest asset of such a model is that it complements the print market perfectly. The reader who wants to read the entirety of a book, or perhaps has an emotional connection to that title, will still buy the whole book. But by allowing an audience to have wider access to titles, publishers are monetising even fleeting references to niche titles in a way that they simply couldn’t do otherwise. They are equally clawing back revenue previously lost to the secondary market and to pirated usage.

The road has admittedly been a bumpy one, but setbacks aside, the market could now be ripe for an aggregator that does things differently. By keeping publishers onside and working as a supplemental solution, a ‘sort-of Spotify for Books’ might just work. But it will require a whole lot more nuance, and a different approach, than has been tried in the past.