Many commentators have claimed that the
whole ebook subscription business is unsustainable, but Amazon is in a unique position of never worrying too much over whether it's making a straightforward profit, but instead more concerned about whether it's building business.
Commenting on Amazon's entry into
the ebook subscription business, Scribd's CEO Trip Adler said, «Successful companies don't fear competition, but rather embrace it.»
Spotify was cited by the entrepreneur I met as a motivation for him to start
his ebook subscription business.
Simon Dunlop, CEO of Bookmate, says that publishers» lack of commitment to or understanding of
the ebook subscription business led to Oyster's demise.
As we all wait with bated breath for the 15th (or thereabouts) of the month which will reveal August's borrow rate for ebooks on Kindle Unlimited (my bet is on a range of $ 1.60 - $ 1.70), I thought I'd set out a few numbers I've crunched about the effects of the first couple of months of Kindle Unlimited and
the ebook subscription business in general.
Oyster announced a couple months ago they were exiting
the ebook subscription business, probably because they lacked the resources to make the model work.
The economics of
the ebook subscription business, however, mean that increasing numbers of members and borrows mean that bigger funds don't translate into higher payout rates to authors.