Friday, 4 January 2013

E-readers, Subscription Models and the Dumbing-Down of Reading

Let's start with a bromide: content owners, be they of music, film or text, continue to search for the Holy Grail of an online business model. One such model is the
subscription, and it has been applied to a variety of content, most notably music. And so the question: can a subscription model work for other forms of content and, in particular, for books? For the Polish start-up Legimi,the aspiration, if not the definitive answer, seems to be a qualified "yes." But there may be a social price being paid here. It may be that. for Legimi to succeed, it needs to rely on, if not encourage, a dumbing-down of reading habits. For those who believe that e-readers might lead to an uptake in reading, this is a matter of potentially substantial concern.

This scenario is conjured up by the December 31, 2012 edition of TechCrunch, in an article by Steve O'Hear, "Legimi Wants To Be The ‘Spotify For Ebooks’ With A Business Model That Relies On You Reading Less" here. In particular, Legimi believes that it can commercially succeed, without altering the pay-per-download framework, on the assumption that people will read less. As reported,

"[p]ut simply, Legimi aims to be the ‘Spotify for ebooks’ in which for a monthly subscription, users get access to a potentially infinite library of reading material, all accessible via the cloud." 
Instead of starting with the assumption that people want to read books on their e-reader from virtual cover to virtual cover, the premise underlying the Legimi subscription model is that people are more likely to be interested in reading only a snippet of a book's contents on their electronic reading device. As explained in the TechCrunch article,
“we [Legimi] pay the whole price of an ebook [only?--NJW] once an end-user exceeds its free sample (approximately 10 percent of the book),” Legimi co-founder and CEO Mikolaj Malaczynski tells me [Steve O'Hear]in an email. The premise being that most readers never make it past the free excerpt, but if they do, the company pays the full wholesale price to publishers. 'We have statistically calculated the average consumption for tablet users and smartphone users, which is lower than one book per month,' he says".
The article continues:
"As long as the number of books read past the free sample remains in line with the overall economics of a monthly subscription, then the model could work, or at least act as a bridge until such time when publishers are more willing to embrace the idea of a subscription model." 
Stated otherwise, at least for the moment, the Legimi business model seem to work only because it relies on "dumbing down" the reading experience in the e-reader environment.

But for how long? Even Legimi is not certain. As the company itself recognizes, the ultimate goal is "to find the sweet spot in terms of what to charge....Legimi is planning to launch in two additional European markets next, likely Germany and the UK. It’s at this point when the licensing ‘loop hole’ and assumptions about consumption will really be tested." The ultimate goal, it seems, is to convince publishers to come up with a pricing framework that may enable Legimi to jettison is primary reliance on the so-called loop hole based on de minimis consumption of book content in a subscription context.

Whatever arrangement is ultimately reached between Legimi and the publishers, the basis for the cloud-based subscription model is that money can be made on the assumption that people will read less, rather than more. Indeed, for the TechCrunch article, such a result is well-nigh a given. “In the end, a ‘Spotify for ebooks’ seems inevitable, as consumer habits find themselves ahead of the market once again. It’s probably more a case of when not if." If the ultimate result is a dumbing-down of reading habits, such a result is a matter of concern, however successful the Legimi business model may turn out to be.

No comments: