Which Authors Do Subscription Services Benefit?

By: Dana Beth Weinberg

Oyster recently added an ebookstore loaded with Big Five titles, a move that could in turn bolster the subscription model, potentially attracting new readers and making the brand more competitive with Amazon. Scribd is steadily bulking up on audiobooks. Two major publishers added ebooks to new the multimedia subscription platform Playster in recent weeks. Meanwhile, Amazon continues to grow Kindle Unlimited yet continues to pay participating indie authors at rates similar to those that spurred grumblings late last year.

What do these services mean for authors? Since, on the one hand, ebook subscription providers typically pay authors less than an individual book sale, they could ultimately undercut authorsÔÇÖ earnings in a market where so few are ÔÇ£making it.ÔÇØ But on the other, subscription services may encourage readers to take risks on new authors, aiding certain authorsÔÇÖ discoverability over the longer term.

The 2015 Digital Book World and WriterÔÇÖs Digest Author Survey investigated how authors are faring with ebook subscription services. We asked authors about their most recent traditionally published and self-published books, respectively, while hybrid authors weighed in on both sets of questions. We found that authorsÔÇÖ experiences with subscription services depended in large part on their level of sales overall.

AuthorsÔÇÖ latest indie books were twice as likely to be available through subscription services as traditionally published books, 40.0% compared to 20.6%. However, traditionally published authors were often unsure whether their most recent book was available through subscription services at allÔÇö33.6% compared to only 13.1% of indie authors.

Traditionally published authors were less likely to feel that their books were fairly compensated through subscription services (32.8%) than were indie authors (51.5%). This finding is particularly curious given that Kindle Unlimited, the largest of the subscription services for indie authors, gives traditionally published authors preferential treatment, paying publishers for borrows based on book price. With different contract terms for indie authors, Kindle Unlimited also requires exclusivity from all but an elite group of indie authors and pays a changing rate based on a fluctuating borrow pool. Moreover, the rate per borrow is the same regardless of the length of the book, with short stories, novellas and full-length novels all compensated the same way.

When the Digital Book World and WriterÔÇÖs Digest Author Survey was conducted in November and December 2014, the payout rate per borrow was $1.40 and $1.43, respectively, down from $1.86 in July, the first month of the programÔÇÖs operation. As of March 2015, the latest month for which data is available, that figure stood at just under $1.34, the second-lowest rate since launching.

Of course, compensation per borrow is not the only concern for authors when considering subscription services. A separate but related question is how borrows will relate to sales, either of the book in question or of other books by the same author.

Only a quarter (25.1%) of indie-published authors responding to the survey said that subscription services had enhanced their sales, and an even smaller share of traditionally published authors said the same (15.3%). Meanwhile, another 15.3% of traditionally published authors claimed that subscription services had actually hurt their book sales, with 13.7% of indie authors in our sample agreeing.authors ebook subscription services

Looking only at the subset of indie authors who were certain their ebooks were available through subscription services, we see a pattern in whether authors reported their sales were harmed or enhanced by subscription services.

The median annual writing income for authors in the camp claiming harm was $15,000ÔÇô$19,999, well above the overall median income for all indie authors, including hybrid authors, who responded to this question, $3,000ÔÇô4,999. These comparatively high-earning indie authors were also likely to have a substantial back-list, having published a median of six to seven books compared to the overall median of five books for all indie authors.

This same group of authors also reported substantially higher earnings from their most recent indie release, a median of $1,000ÔÇô$2,999, compared to median earnings of just $1ÔÇô$499 for all indie authors responding to this question.

As a group, the authors who reported that subscription services enhanced their sales had the same median number of indie books, six to seven, as the group reporting harm. However, they earned less annually on all of their books, whether indie or traditional, than those reporting hurt sales, with median annual incomes of $3,000ÔÇô$4,999, which was also the median for all indie authors in this subsample.

The more subscription-satisfied authors also tended to report only average earnings on their latest book, $1ÔÇô499, again the median for indie authors responding to this question.authors ebook subscription services

So what does all this mean?

The authors who responded to the survey are mostly writers of fiction, and it would seem that subscription services may place authors with strong back-lists and robust sales at a relative disadvantage, depriving them of income they might have otherwise earned from a la carte sales.

While itÔÇÖs impossible to know just how representative our survey sample is of fiction authors more generally, that finding might give indie authors pause when determining whether and which subscription models are in their best interests.

As for traditionally published authors, the sample was too small to draw conclusions and may not be comparable to the indie results given differences in contracts terms, but the implication that better-selling authors might see their sales undercut by subscriptions is certainly food for thought.

On the flip-side, ebook subscription services may be more advantageous to authors who likewise have relatively large back-lists but only middle-range sales on their latest books and have not yet broken out. And since the leading subscription services tout discovery as a key value-add of their businesses, it may turn out that they excel at bringing those sorts of authors the readers and exposure they might not otherwise have enjoyed.