I read an interesting article by Joseph Esposito recently at The Scholarly Kitchen, “Everybody Wants a Netflix for Books“, and I’ve been rather slow about posting but since I did find it interesting, I’m going to chime in here. Better late than never!

In the article, Esposito posits that a “comprehensive and fully up-to-date-library for a low monthly price [for books]” will not happen. He discusses a concept that’s frankly over my head a bit, something about “aggregation” and “windowing”. What I could make out of what he’s talking about is that publishers don’t want to strangle their profits by releasing books that would be on demand elsewhere by making them available as part of a comprehensive service.

For example: As a writer, I’d want my book to be in as many hands as possible for a maximum in readership. I want to be read. But I’d like to eat too, so hopefully, some of those hands have shelled out some $$ to read my book. Publishers may not be as sentimental as I am but they definitely want the moolah.

So, if you know you can charge $3.99 on Amazon for a NYT-bestseller (as long as I’m dreaming here, right?), why on earth would you offer that as part of a paid subscription service where a potentially huge market could download it at no additional cost and you reap the meager profits?

You could argue, what about the exposure to your product and the chance they’ll buy it after trying it out?

A Case in Point

Esposito illustrates this point clearly in a personal anecdote about his subscription to Pandora. For the record, I love Pandora. But I’ve maybe only bought 1 CD based on my listening over a period of a few years. I also used to be a Pandora One member too but when you need to tighten the proverbial money belt, that subscription service is one of the first things to go when they have a freeware version available. Sorry, Pandora. I guess I just proved Esposito’s point there (blush).

Esposito also talks about how we need to develop relationships with consumers. That’s true, but what he doesn’t directly address in his article is the presence of D2C ‘Netflix for Books’ that are already on the market and may already be building these relationships. I’m aware of a few services offering D2C such as Oyster Books, Scribd, Amazon Prime, and OverDrive, which have a similar Netflix-feel.

What we need is to change how we market to consumers and market more to educational institutions who already have established relationships within our communities and a finger on the heartbeat of the literary scene.

The Solution: Educational Institutions As Direct Consumers

OverDrive has over a million titles available from over 1,000 publishers and its publications boasts having over 22,000 libraries and schools worldwide as partners. I’d like to add that locally, St. Louis Public Library and St. Louis County Library, are also partners. Here’s how it works: OverDrive will build the website, you select the content, and your library patrons or students get instant access to the collection.

Publishers have been marketing to libraries and schools for decades so with the demand for more digital content (and cheaper), why wouldn’t you market to these consumer groups?

OverDrive uses a one-copy, one-user model that controls access to materials in their collection in the same vein as a library can only lend a single book to a patron at a time. If there’s a huge demand for Samantha Shannon’s The Bone Season, then you need to order more copies. (Aside: isn’t it funny that a few years ago, we were all about Harry Potter?).

This model encourages libraries to purchase multiple licensed copies based on their user demand and ensures a stream of profits for OverDrive and presumably, the publishers using OverDrive as a middle-man. The content collection, in addition to being customizable, is not fully comprehensive, but you can purchase additional titles in the collection based on what you think your users would like.

Disclaimer: I was unable to find any figures publicly available on OverDrive’s website (but if you find them, please contact me, I’d love to take a look) and have not reached out to OverDrive to provide sales records.

A Personal Illustration

Speaking as a library patron who benefits from area libraries participating as OverDrive partners, I think that OverDrive excels as a model for the future of digital content distribution. I’ll explain. No library is likely to subscribe to individual subscription services, if even offered, by the Big Five. As a library user, even if my library DID offer access to five individual services, I’d be unlikely to want to go to the trouble of having to access multiple sites and logins.

And that’s precisely what makes subscription services like OverDrive, Oyster Books, Scribd, Amazon Prime, and the others on the market who act as a middle man for the big publisher so important to the future growth of digital media distribution.

Schools and libraries are a potentially huge market for profit and OverDrive’s model of a one-user, one-copy method. By offering the option of consumers to purchase individual licensing, you put into the consumer’s hands the power to custom tailor their collections for their local markets.  I think that that’s a wonderful thing.

With the increase in Amazon Prime from $79. to $99., cost is going to be an inhibitor to the average joe who likes to read digital but cannot afford an annual membership.  Libraries, most of which are supported on some level by a tax base, can fill in this gap, basically providing the “membership dues” by making OverDrive available as part of their membership benefits.

Staying Relevant

Because readers will have access to the full title, rather than a chapter preview (such as what Amazon offers), the experience leaves the reader the opportunity to decide whether they enjoyed the book enough to purchase the title later. E-readers, such as Amazon’s kindle, store the cover art on your device so you remember what you read, and include a link for purchase if you try to open the book after your borrowing time has elapsed (if using OverDrive).

As schools and libraries struggle to retain their relevance in a digital age, digital media collections (such as a ‘Netflix for Books’) are one way to provide new and noteworthy titles to the general public at a free or reduced rate. The customizable nature of OverDrive allows schools and libraries to build their own collections and act in a readers’ advisory capacity to introduce their students and patrons to all titles in the collection.

4 thoughts on “Responding to ‘Everybody Wants a Netflix for Books’

  1. At the risk of belaboring the obvious, books are not movies.

    Everything, from initial production costs to file size to the devices on which they are viewed is different about them. The economics of video streaming and book downloading are completely different. The markets and the way that they are marketed are different.

    The entire concept of “Netflix for books” is based on faulty reasoning–what Chesterton would call “the fallacy of the umbrella stand”. The fact that both books and films can be delivered over an internet connection does not make them the same, just as an umbrella and walking stick can both be stored in an umbrella stand, but they are very different objects.

    Sales models work for some goods and not for others. Films and television shows still make the majority of their profits on initial release and direct sales. I saw “The Avengers” in a theater (twice, actually) and I own the Blu-Ray. I have also streamed it on Netflix, when I was too lazy to get up and put the Blu-Ray in the player, However, Marvel has already made it’s money from me, so whatever per-view they get from Netflix is incidental.

    A television show like “The Walking Dead” is released first on the network, available on a pay-per-episode basis from Amazon shortly thereafter, and only available on Netflix after the entire season has aired through other venues.

    While book marketers have traditionally taken advantage of initial sales–release first in hardback, with the highest profit margin, then in trade paperback, then as an e-book–books tend to have a much longer “tail” in sales than video. With the exception of a few high profile and much-hyped series such as Harry Potter, most books are discovered by readers long after the initial release. It is not front end sales but longevity that counts in the fiction market.

    Consequently, going to a Netflix style model for novels would cut revenues for a particular title at exactly the time when it begins to do its heaviest earning.

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    1. Thank you for commenting, MishaBurnett, and sharing your insights on the book market! 🙂 I understand the “tail” model that you mentioned about book sales, but I disagree that a Netflix-style model would hurt sales on titles.

      I think that most consumers want “a good value”. For me, a good value in an e-book purchase is knowing the product before you buy it. Sure, Amazon offers chapter previews (and not all previews are created equal), but unless the title really stands out, I don’t want to risk $3.99+ on a book I haven’t read before.

      Since I’m not a large e-book buyer, I rely heavily on library copies to see if it’s a book/e-book that I want for my permanent collection. That’s just being a savvy shopper. I think that the value in something like OverDrive is that it exposes readers to titles after they’ve been out for a while. If I like a book after I’ve read it, it’ll go on my “Wishlist” and probably within the next 3-6 months, I’ll purchase it.

      That shouldn’t stop publishers from testing the waters with new releases though, any more than marketing hard copies to libraries. If a reader likes the book, they’ll buy it. I know some people might argue, “well why buy if I can rent/check it out for free?” How about the instant access? The ability to mark the item up and make it as dog-earred as you like, highlighting those favorite passages. Lending it out to a friend. The lack of waiting periods due to high demand/availability.

      I think I am probably a light user of Overdrive, maybe 5% of my Kindle collection has been library titles. Out of that, a 1/10 of those titles are books that I liked enough that I would want to re-read. Those are the titles that are going on my Wishlist for future purchase. Yes, I’m talking fractions of fractions but what it amounts to are sales in the long-run, sales from books I might never have picked up off the shelf (virtual in this case) without a Netflix for Books-like system available.

      If there are other buyers out there like me, then maybe they shop the same way too. If a publisher’s titles are included in a digital collection, and that leads to future sales, I think that would help, rather than hinder, sales growth. Even on a small level.

      Appreciate your thoughts, thanks again!

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      1. There is also a difference in perception of value. I have no problem spending 2.99 or 3.99 on a book by an unknown author. I’d spend that much on an independent film or an album by an artist that I don’t know. It’s a price that many people are willing to pay for a cup of designer coffee.

        There is the question of perception of risk for consumers which has always been an issue with indies. In music, film, books, standup comedians, and heck, even restaurants , consumers have a choice between going with an established brand which has a higher price but less risk, or taking a chance on an unknown. The majority of consumers will always be on the risk-adverse side, which is why studios keep churning out sequels to established franchises.

        However, there is also a core group of consumers who are drawn to the uncertainty. I pick up cheap DVDs at the dollar store knowing that most of them will be terrible, but I find the occasion gem that pays for all the others. I tend to look at indie e-books the same way–if I buy ten for 30 bucks and three of them are worth keeping and rereading, then I consider it a net gain.

        In traditional sales models the publishers of content assume the risk, and consequently charge a higher price. The Harry Potter novels retail for 30 bucks a shot in order to cover the volume of returns from all the also-rans. Artist-centered production shifts that risk to the consumer, and so the unit price is lower.

        One way or another, the end user pays for the content, or the content doesn’t get produced.

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  2. I see your point about risk. I’m not sure about the music industry but I know with the film industry, it’s the big sequels that are “money in the bank” that fund the riskier films that may not prove to be successful investments, whether it’s due to a lack of a built-in audience or other factors.

    Not to get off track but I think that some audiences want studios to be more of a risk-taker, at least that’s the impression I get from watching Red Letter Media with my husband. 😀

    I may have to rethink how I buy ebooks after your comments about “the occasional gem”. I’m probably not one of those risk-taking consumers but I do recognize a good deal. Either way you look at it, 10 e-books for 30 bucks is a great price. You’d spend that much on a single new hardcover. That said, I think it’ll be interesting to see how things play out over time on the future of digital content.

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