Ebook subscription service Scribd has ditched its unlimited lending deal and members will soon be restricted to a maximum of three books a month plus one audiobook.
The company had already limited members to one audiobook a month from last September after originally offering unrestricted access. It also removed many popular romance and erotica novels from its ebook selection after their popularity was costing it too much.
The latest move reflects the economic pressures facing ebook subscription services where royalty payments on borrows can outstrip the monthly subscription.
Scribd offers a subscription at just $8.99 a month, which is the cheapest of the ebook library sites. It faces a particular economic pressure in that its range includes many popular titles from the Big 5 publishers.
The exact terms of deals with traditional publishers aren’t known but it’s very likely that they are paid at around the rate they would expect for a full sale based on list price. Big 5 ebook prices rose sharply last year as they returned to agency pricing.
Self-publishers with Scribd (distributed through Smashwords and Draft2digital) were being paid royalties of 60% of normal list price for any book read past the 30% mark, plus 10 partial reads of between 10%-30% counting as a single sale.
If that 60% level holds true for the Big 5, then Scribd could be paying out the whole amount of a monthly subscription on just a couple of ebook borrows.
For example, its recommendations for February include The Color of Magic by Terry Pratchett from HarperCollins, which is priced at around $7.20 on the Kindle store, which means, at 60%, that would pay out $4.32.
Another February choice is The Argonauts by Maggie Nelson. This is published by indie imprint Melville House Books and isn’t available as a Kindle ebook but is on offer at Nook at $9.99, so, at 60%, that would pay out $5.94.
At that rate, the total paid out on just those two books would be $10.26 — 14% more than the $8.99 monthly subscription.
The most surprising thing to me about the Scribd move is that the company claims the changes will affect just 3% of its members in any given month.
This presumably means that only 3% of Scribd subscribers read more than three ebooks a month through the service, which seems low to me. It also surprises me that the firm is making the changes in light of such a low figure — can 3% of its total members be making such a difference to the bottom line?
Amazon’s Kindle Unlimited ebook subscription service, which has seen massive take-up since launching in July 2014, charges $9.99 a month but its library comprises mainly self-published authors as the Big 5 have refused to sign up.
Kindle Unlimited, by the way, isn’t actually unlimited as it sets a maximum of 10 ebooks per subscriber at any one time. This isn’t a monthly limit and new ebooks can be borrowed by ‘returning’ one or more ebooks so the 10-title limit isn’t exceeded.
In July last year, Kindle Unlimited moved from a flat-rate payment system for self-publishers to a pay-per-page read model. Instead of offering a standard royalty per borrow or page read, Amazon sets a KDP Select global fund each month and divides up the fund to authors according to the number of pages read.
As subscriber numbers have grown, the Kindle Unlimited payment to authors has steadily fallen, as Amazon is able to reduce the amount it pays out according to the amount of income it’s getting.
KU is reckoned to offer traditional publishers the same terms as for a normal sale but as so few trad firms have signed up this is obviously not proving to be a cost pressure.
Moving to a lower-cost pay-per-page scheme is probably not a viable option for ebook lending sites such as Scribd as the attraction for Big 5 publishers would be diminished.
Ebook subscription firm Oyster Books announced its closure last September and some of the company’s team moved to Google Play although there have been no indications since that Google is moving into ebook lending.
The new Scribd scheme starts in mid-March and membership will cover:
- Monthly Reads: three books and one audiobook of your choice from Scribd’s library of bestsellers and award winners
- Scribd Selects: a rotating collection of books and audiobooks handpicked by our editors, to which you will have unlimited access
- Substantial previews of any book or audiobook
- Unlimited access to sheet music and documents