Skip to Main Content

May 18, 2011 | 4 minute read

The Ebook Revolution: 3 Emerging Payment Models

written by Amanda Dhalla

With ebook sales expected to triple to $2.8 billion USD by 2015, according to Forrester Research, new opportunities are opening up for publishers, booksellers, and device makers, while creating pressure to evolve outdated processes and business models. Bricks-and-mortar sales are declining as digital distribution and self-publishing rise. The rapid proliferation and adoption of ereading devices by tens of millions of US consumers are accelerating these trends. As spend shifts from print to digital, how can industry players maintain a foothold in this brave new world of book publishing? One idea: act fast with new ownership models and innovative products, according to Elastic Path's latest research Brave New Publishing World: Assessing the Impact of Ebooks on Consumers. Download a free copy of the full research report.

Outright sales are not the only way to monetize ebooks

Ebook sales are strategically important to publishers to create new revenue streams, attract wider audiences, and respond to customer demand. Many traditional publishers like Harlequin have created divisions to publish ebooks exclusively, and sites like Smashwords and Lulu where people can self-publish and sell their own titles are flourishing. But outright sales are not the only way to make some cash. Our research indicates that ebook readers are ready for new ways to access ebooks. Looking at the graph below, almost three quarters of those surveyed are interested in all-you-can-read ebook subscriptions or willing to accept embedded advertising to subsidize costs. And many like the idea of ebook rentals and discounts à la Groupon.

But where should a publisher or content owner look for real world examples of alternative monetization models?

Other content businesses like music can offer guidance to publishers

As Michael Wolf from GigaOM notes in his excellent article on ebook monetization models, digital books still fall significantly short of other forms of content when it comes to making money. Savvy booksellers, publishers, and the like should therefore look to the video, gaming and music industries for guidance in developing alternative ways to generate revenues. These markets are more evolved, offering sales, rentals, subscriptions, and ad-supported content of various types. Think Netflix, Hulu or Pandora. The publishing industry can leverage their knowledge of customers to innovate with individual ebook subscriptions, monthly or weekly rentals, sponsored links, shorter books, and add-on content like videos, courses, events, and games. All-you-can-eat subscriptions, or club models where the consumer receives a free ereader and pays a monthly fee to access books for a fixed term, show potential. Chapter or section sales – or other content chunks like images – either on their own or mixed and matched with material from other authors and publishers may work for the educational, professional, or similar industry segments. And a few recent events indicate that the book world IS evolving to follow other content businesses like movies and music to meet consumer expectations. All-you-can-eat ebook subscriptions A Spanish start-up,, aims to become the Pandoraof books by streaming books in the cloud. In beta since March 31, has signed up 10,000 testers to read free, ad-supported books. The official launch next month will include a paid subscription plan provisionally priced at €9,99 a month, €19,99 for three months or €59,99 euro for a full year.

Individual ebook subscriptions O'Reilly’s Safari Books Online digital library has been available via subscription for years, with authors commonly getting paid based on pages read. And now the company has launched individual subscriptions for their frequently updated computer ebooks. O'Reilly EbooksAd-supported reading Ads are displayed on the brand new $114 Kindle with Special Offers, subsidizing the cost of the ereader. Special offers and sponsored screensavers display on the screensaver and on the bottom of the home screen.

Still, a universal ebook format is needed to make ereading ubiquitous

To cultivate the widest possible audience for ebooks, the publishing industry should make interoperability by way of a universal ebook format a major goal. Just like the digital music world did a few years back. Downloading and installing multiple apps to read various types of ebooks can be frustrating and time-consuming. And closed systems like the Kindle or iPad, while very user friendly, control the purchasing and reading experience, denying buyers true ownership of their ebooks. Ebook revenues will reach their maximum potential only once every publication works on every ereading device without a proprietary app, no matter where you bought it or choose to store it.

Interested in more publishing content? Watch our on-demand webinar, Winning With Subscribers: Top Trends and Best Practices for Selling and Managing Subscriptions Online, where we analyze the risks and rewards of pursuing the subscription model. Alternatively, download a free copy of our research report, The Future of Magazines and Newspapers in the Digital Era.