The music, film and TV industries have all undergone radical transformations over the last fifteen years. In contrast, the publishing industry is only now feeling the full force of technological change.
Ebooks and ereaders are changing consumers' reading habits and throwing up serious questions about how the industry can go forward on a sustainable footing. Major players in the music industry eventually solved their own sustainability issues by embracing change and incorporating subscription-based services in their business models. However, ebooks pose different problems. Subscription services alone particularly in emerging markets where content piracy is rife, do not seem viable. The magic bullet could be 'social'.
In emerging markets subscription-based, or indeed any form of payment model has struggled to take off for companies producing media-rich content. Piracy is rife and compounded by cultural attitudes that generally regard content as something that should be free. Put simply, many people in countries like Russia don't feel like they should pay for ebooks, digital music or TV media. This was the acute challenge that faced us when we started Bookmate in Moscow. Our solution was to build a sticky social layer with features like author pages and book playlists, coupled with access to ebooks via subscription on their phones. We found consumers became much more willing to pay as they came in search of a book on Bookmate but stayed for the all the other features.
But why are social features so appealing to ebook consumers? By integrating a user's social network accounts, their reading is shared through several different and complimentary networks. This leads to exponential growth, as a book is shared, commented upon and recommended across several networks all at once. Research by Shoutly, a monetisation platform for the social web, revealed that a friend's recommendation on social media is the most influential factor when buying software or ebooks, much more influential than an advert on TV or in online search results. Over 90 per cent of consumers said they would be more likely to buy a product if it had been recommended to them by someone on social media. Add to this the fact that consuming media has become a much more social activity and it makes perfect sense to integrate social media and chat functionality on ebook platforms.
Other media forms are inherently social: We watch movies together, we go to concerts and enjoy music together and it is human nature to want to experience and share together however reading is a mostly solitary affair. Despite the fact that a reader's experience with a book lasts over many hours and days and often the relationship with the characters may extend across multiple titles and so the emotional engagement is arguably higher. Online and mobile technology gives us the tools to incorporate new functionality into reading apps opening up the possibilities for a richer social experience.
Currently, even the big players like Amazon have not been able to fully capitalise on the possibilities offered by social functionality. The standard course of action has been to spend a lot of time and money producing algorithms that recommend books for users based on behaviour.. As good as these algorithms may be, we feel they cannot replicate the success of recommendations from friends, family or like minded readers. Intuitive social functionality combined with the convenience of a subscription model is a winning formula and we've found the value it creates in the eyes of the consumer makes a subscription model viable.
The ebook industry has mostly replicated of the traditional book industry and we are still to see the wave of real innovation start to impact the industry. Richer social functionality leads to more time being spent on services and a greater emotional investment from users, which in turn opens up new monetization opportunities.
Looking ahead, as the ebook market in the West becomes saturated, the need for all ebook players to experiment with value adds to make their offering more appealing in emerging markets will grow. The lessons learned asebook companies seek to break emerging markets will undoubtedly have a reciprocal effect on the services that are offered in Western markets and even on other media verticals such as music, film and TV.
The future for the ebook industry is very bright. For ebook companies and traditional publishers that embrace the necessity of expanding their technical offering to crack emerging countries, there is a huge, lucrative, untapped market. From the perspective of consumers, reading ebooks will only become a more social, flexible and enjoyable experience.
Simon Dunlop is founder of social ereading service Bookmate