Streaming Options

Disruption in media continues with the rise of streaming media, creating major issues and concerns about the future landscape for all types of media. Streaming began back in the 1934 with the introduction of Muzak elevator music: “[S]oothing melodies were used in early skyscrapers to make people feel less nervous about stepping into a contrivance that looked like a death trap” (“The Soundtrack of Your Life: Muzak in the Realm of Retail Theatre,” David Owen, April 10, 2006; newyorker.com/magazine/2006/04/10/the-soundtrack-of-your-life?currentPage=3). Today, streaming music is available on tens of cable/dish stations along with streamed video, television programming, and other media.

In July 2014, Rupert Murdoch bid $80 billion for Time Warner. For a company with a strong portfolio in media, why worry about acquiring yet another set of media assets? Traditional media is facing stiff competition from technology companies (Apple, Amazon, Google, Netflix) as well as cable companies (Comcast, Dish—bought by AT&T), etc. A PricewaterhouseCoopers study released in June 2014 (afterdawn.com/news/article.cfm/2014/06/04/digital_film distribution will topple blu-ray_dvd_and_cinema_by_2017) found that both Blu-ray and DVD sales will fall more than 28% from $12.2 billion 2013 to $8.7 billion in 2018.

Netflix now produces hit programs (House of Cards, Orange Is the New Black). Amazon is reportedly putting major R&D into original programming efforts. And Google is using YouTube as a major distribution outlet for content owners. With cable channels continuing to create award-winning content as well—Mad Men, Breaking Bad, Orphan Black—we are seeing major fragmentation to the existing models of access. And this is now extending as an option for ebook access as well.

In 2012, Library Journal released a Patron Profiles report that noted a drop in the number of users who cited libraries as their primary source for videos—from 36% in 2011 to 27% in 2012—with many reporting use of other means, such as streaming, cable, etc., as part of their mix (“Latest Patron Profiles,” Alison Circle, May 19, 2012; lj.libraryjournal.com/2012/05/opinion/bubble-room/latest-patron-profiles). In July 2014, BISG released the first research report on subscription models for distributing digital books (“Digital Books and the New Subscription Economy,” bisg.org/news/digital-books-and-new-subscription-economy-major-new-bisg-research-study-releases-today). Jonathan Stolper of Nielsen BookScan noted that, as with early adopters of other technology, book subscribers tended to be young, male, and tech-savvy, with 5% of book buyers who use a book subscription service continuing to spend money on one-off book sales of $45 or more. Stolper says one challenge is determining the different market needs and how subscription models can meet them. “For example, a professional reader looking for targeted information on a specific subject may want a subscription service that delivers a highly curated selection where price is less important. Casual readers who want a range of options in different subject areas will want a broader selection where lower prices eliminate purchase risk and encourage sampling.” Consequently, consumers who are already accustomed to subscription for music, movies, or news and information will demand similar benefits from book subscription services as well.

Oyster and Scribd (scribd.com) have been providing Netflix-style streaming access for a monthly fee for some time. Each charges under $10/month for service and has strong catalogs to select from. Both require that you load these on devices that accept apps and work on iPhones, iPads, and Android devices. Oyster also works on nook devices; Scribd offers apps for Windows devices. Both now allow you to read on web browsers. Other smaller streaming services (such as Entitle; ereatah.com) exist, as do free services from libraries, Internet Archive, Open Library, Librivox, Project Gutenberg, the Digital Public Library of America, and other sources.

In July 2014, Amazon released Kindle Unlimited, a subscription service initially providing access to more than 2,000 audiobooks and 600,000 Kindle ebooks for a $9.99 monthly fee. The service allows access for up to 10 books at a time (amazon.com/b?ie=UTF8&node=9578129011). The free 30-day trial resulted in significant interest, but long-term subscriptions are still evolving. Amazon’s announcement was of interest because although it included many Kindle-only titles, there were none from the Big Five trade publishers—which was also true when the company launched its Kindle Owners Lending Library back in 2011. Authors receive a percentage for books selected but they must be a part of the KDP Select program. Reviewers have noted that most of the books in the initial Kindle Unlimited catalog are self-published or published by Amazon itself.

The issue of streaming ebook services focuses on the huge aggregators and their role in distribution systems that treat books the same as any other consumer product. These aggregators often lack transparency for authors on the use of their works and gather customer information for their own purposes. Efforts of the American Booksellers Association and major publishers to set up online book selling channels have not developed well.

Many in the industry see a potential for less diversity and more centralized control by huge monopolistic companies that would marginalize the position of publishing, focus on short-term profits instead of author development, or focus on smaller niche markets. The further erosion of any sense of “ownership” of personal copies of media programming is another concern, especially for libraries having the responsibility of serving their communities and developing not just mainstream collections, but the widest possible range of viewpoints. Given the seemingly cutthroat negotiations Amazon is apparently having with Hachette, perhaps some of these concerns are valid.

Self-Publishing

In July 2014, a report (authorearnings.com/report/july-2014-author-earnings-report) was released from Author Earnings, a group whose purpose is “to gather and share information so that writers can make informed decisions.” (Its secondary mission is “to call for change within the publishing community for better pay and fairer terms in all contracts.”) This latest report found that in the first 3 months of 2014, self-publishing was a key source of revenue for book sellers. In fact, self-published authors accounted for 31% of Amazon’s book sales during that time period. Self-published authors earned nearly 40% of all ebook royalties on the Kindle store. “The days of looking at self-publishing as a last option are long gone,” the report concludes. “Self-publishing was once decried as a foolish choice for authors … We have also seen from this data set that DRM has a deleterious effect on ebook sales, which matches what other entertainment industries have learned. And we have seen that self-publishing is not just for a handful of genres; it dominates those genres and represents a significant share of all ebook sales.” Author Earnings data is based on ranked Amazon ebook bestseller lists and available for free downloading for further manipulation. (See Figure 3 below.)

At a recent webinar, Sybil Smith of Smith House Press Publishing Consultants identified three significant trends:

Amazon is now selling more electronic editions than paperbacks, and in the U.S., net revenue from ebook sales has exceeded net revenues from hardback sales.Eight of the top 20 titles on USA Today’s Best-Selling Books listed for the week of her talk were ebooks.A quarter of the top 100 Kindle books sold by Amazon are written by self-published authors.

Today, according to Smith, fiction is driving ebook sales, with children’s books gaining a strong audience. The average ebook reader is a woman 45 or older (70%) with a middle to high income. About 56% of adults 18–39 today own some form of e-reading device and purchase 16–21 books each year.

“While the Big Five do not give as big a royalty cut,” notes Bowker’s Dawson, “they do provide much wider distribution than any individual author can manage on his or her own, and they confer prestige.” Because of this, Dawson adds, “I think self-publishing makes the most sense in a ‘hybrid’ environment, where authors can work out for themselves what rewards each model brings, and pursue those rewards accordingly.”

Self-publishing authors still need services, especially in writing and editing. Positive reviews enhance any book’s creditability; studies show 72% of consumers rely on online reviews. Getting into libraries has become easier with Smashwords (smashwords.com), a key resource for writers. In 2014, Smashwords, the world’s largest e-distributor of independent ebooks, announced an agreement with OverDrive (overdrive.com), the biggest library ebook dealer. This will enable a more seamless uploading of indie titles into the OverDrive platform and thus easier reader access.

“By holding seminars and classes, and by bringing local authors together with readers and aspiring authors, libraries are uniquely qualified to orchestrate community resources and talent to help local writers become professional self-publishers,” Smashwords founder Mark Coker believes. Coker sees libraries “unleashing” the talents of their local community’s writers. “[Libraries] can also help ensure a steady future supply of library-friendly authors who will want to supply their ebooks to libraries.”

Los Gatos Public Library has established its own eBook Self-Publishing Partnership with Smashwords to provide just these types of services to the local community (losgatosca.gov/1968/eBook-Self-Publishing-Partnership). Coker sees the rise of ebooks placing public libraries at a crossroads. “Some book publishers, fearful that library ebook lending will cannibalize retail sales of books, are reluctant to supply ebooks to libraries at the very time that library patrons are clamoring for greater access to such materials. Rather than standing idly by as publishers jeopardize their future, some libraries see an opportunity to take control by proactively cultivating a newer, more library-friendly source of ebooks. These libraries are developing community publishing initiatives in partnership with self-published ebook authors.”

The Library Publishing Coalition (librarypublishing.org) was formally established in 2014 to promote academic and research libraries’ roles in publishing. Through these types of organizations, academic libraries are working to provide opportunities for both accessing and creating ebooks by expanding their reach and extending their missions to meet 21st-century opportunities and challenges. [See Stephen Arnold’s article “Libraries as Publishers: Easy to Create, Hard to Find” in the November/December 2014 issue of Online Searcher for more detail on library publishing. —Ed.]