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Scribd’s ebook subscription service: Why authors should be skeptical

By October 4, 2013 May 5th, 2015 Blog

(Updated) Inc. magazine just published a blog post titled Why Are E-Book Subscription Start-Ups So Hot? It mentioned Scribd, the PDF-and slideshow-hosting service which has just added a $9 per month subscription service for ebooks. Writer Stephanie Meyers concentrates on the tepid response from large publishers, but I wanted to highlight another view — what independent publishers and authors think about their ebooks appearing in a subscription-based catalog. I’m the founder of In 30 Minutes guides, and have authored many titles, including the just-released Twitter user guide, Twitter In 30 Minutes. I have some opinions about this topic, as well as some questions about how Scribd’s scheme works for ordinary authors.

scribd subscription authors

First, it’s worth asking what authors will make from the service. It’s not clear. Scribd’s website urges readers to “support authors. Your proceeds go to writers” but the Scribd FAQ on the subject only says this:

Are authors being paid when I read books this way?

Yes. Scribd’s subscription service operates legally through agreements with authors and publishing partners. Revenue that Scribd earns from monthly subscription fees is paid out to the original authors of the included titles, ensuring that they can continue to write great books.

GigaOM dug a little deeper, but no hard figures emerged:

Scribd — like Oyster — is a bit vague on how authors are being paid. Payments currently “vary a bit by publisher,” Adler told me, and said Scribd “[plans] to eventually be public about the terms.” But HarperCollins CEO Murray told Publishers Lunch, “We have negotiated very hard, to the point where if the whole business went this way, we and our authors would be very pleased, because the economics are more favorable…[it’s] the exact opposite of the music industry’s subscriptions models. The revenues that go to our authors is up, somewhat significantly.”

Murray is apparently referring to Spotify and other subscription-based music services, which are famous for paying content creators next to nothing. NPR reported last year that independent artists were getting $0.004 per play on Spotify, and many large artists refuse to place their music on the service. The same article reported that large music companies give artists less than a 20% royalty.

Think about that for a moment. Spotify and the labels get most of the money from subscribers and advertisers. The artists get the scraps. I’m very suspicious that HarperCollins’ arrangement with Scribd, far from being the “opposite” of the music industry’s subscription agreements with labels, will actually be very similar: The platform and the middlemen will make most of the dough, while the content creators get pennies.

So, Scribd, how much will authors get per read under your subscription plan? If it’s pennies per read, and it’s cannibalizing book sales, why would I ever sign up for such a scheme?

Update: See my follow-up post on this topic, Authors as an afterthought in the ebook subscription marketplace

5 Comments

  • Joey says:

    Ian, good points in your article. If you get a moment, go to Nokbok.com and see our “How It Works” page. We are also a new subscription e-reading site launching early 2014, but we are working to ensure authors are paid well. And we are very open about how authors are paid. I’d love to know your thoughts on our model. Thanks Ian – Joey, The Nokbok Team

  • I did check out NokBok.com and click on “How It Works. I saw that “writer’s fees” are part of their business model’s income stream.

    Joey, do you really intend to charge writers a fee? If so, why should we pay you? This would be like if my boss made me pay a cover charge every time I showed up for my shift. Agents and publishers don’t charge fees to writers.

  • Ian Lamont says:

    Joey: Thanks for letting us know about your service. The basic consideration I am using to evaluate any other distribution platform are the net receipts per sale. It’s easy to see what those are for many authors/publishers simply by looking at the ebook price on Amazon and multiplying it by 70% (or 35% in some cases) and subtracting Amazon’s “delivery fees”. So, for an ebook I sell for $5, my net receipts are about $3.50 minus 30 cents … i.e., a little above $3.

    For Nokbok: 60% of net proceeds … is that the same as gross receipts? Anyway, let’s break it down a bit. If you have 1000 people next October paying the $5 sub, and you are getting revenue from a few other sources (ads, etc.) … let’s say that ads up to $7000 per month total. 60% of 7000 is $4200. Assuming each one of your readers reads 1.5 titles per month, that works out to about $2.80 per read. Not bad. Is this the type of calculation you are making? DId I miss anything, or are my assumptions incorrect?

    To Robert Ender’s question: Why do writers have to pay fees to be on your service? We’re supplying the content. There shouldn’t be any fee.

    In addition, what counts as a read? What if someone starts but doesn’t complete the title? Will the author be compensated? In addition, are the payouts scaled according to length or retail price? That is, if I write a 10,000 word book, and Jane Smith writes a 50,000 word book, will her payout be 5x? What if my ebook retails for $6, but hers only goes for $3? Any details will be helpful.

    Ian Lamont
    Publisher, In 30 Minutes guides

    • Todd says:

      Hi Ian,

      I’m Todd, with the Nokbok Team. Thanks for your comments. I just wanted to address a couple of your questions.

      Yes, Nokbok distributes 60% of Gross Receipts back to authors. This includes advertising, member fees, affiliate marketing, and it also includes commissions on book sales. Authors will have the ability to also sell their physical books and e-books on Nokbok and retain 80% of the retail value regardless of the price they set for the book. The 20% we keep is added to distributed revenue (Gross Receipts). We’re the first company to split our gross revenue with authors.

      Yes, your assumptions are correct, though we believe that when you include book sales commissions, affiliate marketing, and other revenue the per-read rate per month could be higher.

      The only fee a writer pays, is to join the community ($4.95 per month), and if an author uploads ten or more books to Nokbok, the fee is waived. See Nokbok.com “How it Works”. Consider the implications (regarding high volume of low-quality work)if anyone could participate in our 60% gross revenue split for free. Additionally, when Amazon takes a 30% cut from the sale of your book, they are charging a fee, they’re just not calling it a fee. Because we are subscription based, we have to take it on the front end, but ours is much lower.

      A work is considered “read” when at least 20% of it has been viewed by a user, and the payouts are not scaled.

      In the past month, we’ve had hundreds of self-published works rolling in, we’ve partnered with close to 20 publishers adding hundreds of books, and reader interest has been amazing. We’re working to create the best reader writer community out there; a place where readers are free to search and discover for a low cost, while authors receive fair (even competitive?) royalties.

      If you have any questions or comments, just email me or the Nokbok Team at Nokbok.com@Gmail.com, there’s six of us: Mike, Kailee, Joey, Shari, Konrad and myself. We’d love to hear from you :)

      Thanks again, and we hope to see you on Nokbok!

      Cheers,

      Todd
      The Nokbok Team