GW Cohort 9 Publishing eNewsletter

MPS in Publishing's eNewsletter for Fundamentals of E-Publishing PSPB6251

Subscription-based Digital Publishing

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Just when you thought the eBook business couldn’t get anymore complicated, two start-up companies have launched an eBook subscription-based platform for consumers.  The two companies at the forefront are eReatah and Oyster. The Digital Book World article focused on eReatah’s service.

So does this business model mean consumers are renting the books instead of purchasing them? Not hardly. How this business model works is the subscription service provider places DRM (digital rights management) software around the book to avoid resale by the consumer. Based on eReatah’s model, the company offers consumer three different pricing strategies:

  • $16.99 (two ebooks/month)
  • $25.50 (three ebooks/month)
  • $33.50 (four ebooks/month)

What the article did not disclose was how eReatah created that pricing strategy; what business intelligence did they use to base the pricing structure?

The other questions that come to mind are:

  • What if the consumer wants to purchase more than four ebooks/month?
  • Why would a consumer pay around $8.50/ebook for a subscription-based service, when he could pay around $5-7/ebook through a purchase? (And especially if he’s still going to end up “owning” it instead of “renting.”)

Considering how quickly technology changes and that many publishers are still trying to figure out what works best for them, it’ll be a wait-and-see season before this consumer will jump in.

Submitted by Lillian Laitman-McAnally



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