How much do people read? Nobody's too sure, but it looks like an extremely long tail distribution -- not just a matter of 80% of the books being read by 20% of the readers, but of 80% being read by maybe 5-10% of the readers.
The $9.99/mo price point will work fine for the major publishers if the readers end up on average reading $9.99 of retail-value ebooks per month, but not too much more, and if AMZN's accounting back-end pays them pro-rata for loans. It's like an all-you-can-eat restaurant buffet; some people will pig out, but most people don't fill themselves to the point of nausea, and it all averages out in the end.
However, I suspect it's no coincidence that this is surfacing at the same time that AMZN are renegotiating their ebook pricing contracts with the big five (starting with the current dust-up with Hachette). It's another form of leverage: Amazon can offer it as a tasty extra -- in effect, a commercial library access channel -- for compliant publishers, but can also threaten to withhold access to the new channel if they won't play ball over discount structures.
We actually have a pretty good idea. According to Gallup/Pew research[0], the median American reads 8 books a year. Slightly less than a third read more than one book a month. I doubt any customer who reads less than one ebook (let alone a physical book) per month would find it worth signing up for this service. That leaves the service with mostly heavy consumers of books, which is going to really stretch that $10/mo price point. Since the major publishers already think that a single ebook is worth at least that, I can't see them joining a program that will almost certainly deliver less revenue.
The problem is, those figures aren't granular enough to use for marketing purposes. For example, it's known that about 50% of genre SF/F book sales go to about 20% of customers -- and about 45% go to less than 10% of customers! Some folks are reading over 100 books/year. (I know plenty of them.) We know there's a curve; we just don't really know it's shape in enough detail to predict how an all-you-can-eat book buffet will pay for itself.
> We know there's a curve; we just don't really know it's shape in enough detail to predict how an all-you-can-eat book buffet will pay for itself.
The thing is, Amazon might. They can read the distribution of books bought per unique user annually straight out their database, and them being the size they are, that seems like quite a good proxy for how many books are read per year by people.
How is the deal structured? Per stream, per 'play', per open? What about books that have higher list prices? etc. Existing ebook rights contracts are based on the agency model (70/30 split with retailer, then some portion of the 70 for the publisher and author). What happens in this model? Authors and agents will probably want to hold out for 'streaming' rights as a separate thing, perhaps. Not sure how Oyster and Scribd are structured, but i suspect that one thing limiting the major houses for streaming is contractual question marks.
I bet Amazon, Apple, and B&N's Nook have data on how much people read.
In fact, I know that Amazon tracks how much people read. They know how many copies are sold, what people bookmark, what page they are on, etc...
I bet they have analytics somewhere that could tell you all kinds of amazing things about each book. That would be incredibly useful to an author that cared to dig into how people interact with their work.
How much do people read? Nobody's too sure, but it looks like an extremely long tail distribution -- not just a matter of 80% of the books being read by 20% of the readers, but of 80% being read by maybe 5-10% of the readers.
The $9.99/mo price point will work fine for the major publishers if the readers end up on average reading $9.99 of retail-value ebooks per month, but not too much more, and if AMZN's accounting back-end pays them pro-rata for loans. It's like an all-you-can-eat restaurant buffet; some people will pig out, but most people don't fill themselves to the point of nausea, and it all averages out in the end.
However, I suspect it's no coincidence that this is surfacing at the same time that AMZN are renegotiating their ebook pricing contracts with the big five (starting with the current dust-up with Hachette). It's another form of leverage: Amazon can offer it as a tasty extra -- in effect, a commercial library access channel -- for compliant publishers, but can also threaten to withhold access to the new channel if they won't play ball over discount structures.