Is a "Netflix for e-books" nearing viability? Yesterday, Smashwords, the largest distributor of self-published e-books, announced a new deal with Scribd, the document-sharing platform that has reinvented itself as an e-reading service, including an $8.99 all-you-can-read plan. "They’re trying to do for e-books what Spotify does for music and Netflix does for films," Mark Coker, the CEO of Smashwords, told Fast Company.
The Smashwords deal greatly expands Scribd’s service, making over 200,000 titles available; it also makes these titles available for individual purchase through Scribd’s platform (for readers who still prefer a la carte pricing). A competitor called Oyster is trying something similar at a similar price point; Coker has a deal with them, too.
But is the all-you-can-read model really viable in the long term? How will such a service alter the publishing landscape? And who reads books anymore anyway, when there are so many great GIF listicles competing for our attention? We caught up with Coker—who last crossed our radar as defender of erotica against a squeamish PayPal—to explore these and other questions.
FAST COMPANY: How does the all-you-can-read deal with Scribd work for Smashwords authors?
The first 10% of every book from page one forward is available as a free sample. If readers read an additional 20% more, the author and publisher get credit for a full sale of the book, 60% of the list price. Another interesting component is that Scribd will also pay in cases where the reader reads more than the first 15% of the book, but less than 30%. In that situation, the author gets a "browse credit." For every 10 browses, they get credit for a full sale.
It strikes me that a business model like this, if it caught on, could actually shape the forms of books people write. It seems that there might be an incentive to write shorter books to trigger credits sooner, and it seems like authors might prefer to write "modular" books—short story collections instead of novels—if readers' attention is divided.
It’s an interesting question, and it’s an unknown. If content creators start modularizing content in a way that interrupts the enjoyment of that content, it will reduce sales. And if everyone starts writing shorter books but continues to charge high prices, that would undermine the economic model of businesses like Scribd.
There is some debate over the viability of the business model to begin with. What do you think?
I think the model can work. The subscription model creates a cool experience for the reader—it creates what I call a frictionless reading environment. The reader can surf around without regard for price, so the reader is relieved of the cognitive load that the reader would normally have to bear when browsing through a typical bookstore. Another reason this model can work has to do with the rise of self-publishing. The average book on Smashwords is priced at $2.99. Over 30,000 are priced at free, which means that Scribd customers read them without Scribd having any obligation to pay a fee to the author.
If you’re an author and you price a book at free and it becomes a runaway best-seller, then... that was kind of dumb, no?
Many of our writers doing free books are using free as a promotional tool to introduce their author brand to readers. Once a reader trusts your brand, they seek out your other books that carry prices. A lot of our best-selling authors write romance. They’ll write a multibook series, and price the first one at free to get the reader hooked. But many writers are writing for different reasons than just making money. If making money on one’s written works was a requirement, there would be very few books in the world. Writers write because they need to write.
Why do you think subscription services like Scribd and Oyster are potentially important to publishing as a whole?
Everyone is always looking for the magic silver bullet, the best way to sell books, but the answer is that consumer behavior is as diverse as humanity is. People like to consume and discover books differently. People like to shop at different places. I think the subscription model is going to appeal to readers who want access to a lot of books at a low fixed cost per month. The world I would like to see in the future is a world of many virtual bookstores, with many book consumption methods, and many successful companies that are dedicated to putting books in front of reader eyeballs. I think the world will be a better place if these subscription services can gain a foothold and survive and thrive.
I’m a little bothered by the idea of a world full of books that were only read a fifth of the way through. Then again—in the days before the e-book, how often did people actually read the books they bought in the store?
I think it’s a well known dirty little secret—not even a secret—that many books are purchased that are never read. I can step into my library at home and see thousands of books my wife and I have purchased that we would like to read or aspire to read but will probably never read. Reading is an aspirational activity—all of us aspire to read more books than we actually do. Which is another reason this business model can work. It’s like health club memberships. Come New Year’s, people feeling guilty from Thanksgiving and Christmas turkey make a resolution and join the health club. They go a couple of times, but don’t go for the rest of the year—yet they’re paying the subscription fee every month. I think that kind of aspirational purchase will happen with these subscription services. On some months, I imagine Netflix loses money on me, but many other months they keep my entire subscription fee and I don’t consume anything. Services lose money on gluttons every month, but I’m betting the vast majority of subscribers will be moderate consumers.
I know the feeling of having books piling up, and sadly admitting to yourself that there are many you will never read in your life. And it's only grown more difficult over the last few years.
I feel the same way. These pressures that we all face will only grow stronger in a world where our attention is fragmented. But I also think that for the people who can find refuge in a book, it offers them focus. It offers a break from that fragmented world of sensory overload. For people who do manage to read, it’s one of the most precious things in their lives.
Related in Fast Company: "George Plimpton Never Did This"
This interview has been condensed and edited.