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Books as a service: How and why it works

Will a "Netflix for ebooks" catch on? 24Symbols is counting on it.

Justo Hildago (@justohidalgo), co-founder of 24Symbols — a kind of Netflix for ebooks — says books as a service not only benefits readers, but publishers as well. Hildago outlines his company’s business model and explains the benefits it offers in the following interview.

Hidalgo will also expand on these ideas at TOC Frankfurt 2011 in October.

How does 24Symbols’ business model work?

Justo HidalgoJusto Hidalgo: 24symbols is a subscription service that lets users read in the cloud, and it includes social capabilities. This means that the user does not need to download the ebook. The book goes wherever you go — read it on your laptop, iPad, smartphone, and so forth.

We have a freemium business model. Users can subscribe for free in order to read ad-supported books online. Or they can pay a monthly, quarterly or yearly fee to access a bigger catalog with no ads, and with additional capabilities, such as reading offline — on the plane, on the subway, or in any place where Internet connectivity is not available.

What we’re offering is quite different compared to what the big players are doing. We’re offering an alternative approach — a new channel where publishers can provide additional value to the readers, and where readers can take advantage of what the Internet is offering.

How does your model benefit publishers?

Justo Hidalgo: There are three main benefits for publishers:

  • Piracy — Though not as high yet as in music or movies, piracy in books is clearly increasing. Publishers can either wait until the numbers get so high that nothing can be done, or they can act accordingly. The examples of Netflix and Spotify
    show that if you give users a compelling way to consume paid content, they will pay for it.
  • Cannibalization — We don’t believe books are dead, but rather that they will co-exist with their digital counterparts. 24symbols helps in that coexistence as a way to easily re-direct traffic to retailers — if you love a book on 24symbols, give it as a gift; if you read for a while but still prefer the printed version, buy it.
  • Books as a service — The trend toward consuming content from the cloud is clear and inevitable. Publishers must start positioning themselves in an area that is already profitable in many businesses and clearly will be soon in the book industry. The benefits it brings to publishers — statistics and data gathering, close revenue control, and the ability to experiment — override the current concerns.

Additionally, we share revenue with publishers. The way to do this is by having a common revenue pool where we include all book-related ad revenue and the paid subscriptions. For a specific time range, such as a month, this revenue plus the number of pages that have been accessed throughout that period gives us the “price per page.” Then we just count the number of pages per publisher and pay each publisher accordingly.

TOC Frankfurt 2011 — Being held on Tuesday, Oct. 11, 2011, TOC Frankfurt will feature a full day of cutting-edge keynotes and panel discussions by key figures in the worlds of publishing and technology.

Save 100€ off the regular admission price with code TOC2011OR

How are publishers responding?

Justo Hidalgo: We’re finding lots of interest from publishers. Most of them understand how our model can help them and since we’re quite flexible regarding how to start, it’s easy for them to begin by publishing some content in order to experiment. We’re adding new books to our catalog every week, and we’re finishing some deals with big publishers that will provide a “seal of quality” to our project.

Is piracy a concern for you?

Justo Hidalgo: The project itself was born with piracy in mind. As I mentioned before, piracy is increasing in the ebook market. This doesn’t help the industry, as it didn’t help other cultural and entertainment industries, but it clearly shows a shift in how content is accessed and consumed. We offer a solution that’s based on a proven premise: if you provide readers with a convenient, unified and affordable way to access content, people will use it. Once that’s achieved, piracy doesn’t matter that much.

This interview was edited and condensed.

For more on how 24Symbols works, check out the video below:

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  • http://hollywoodbacklots.com Keni Arts

    It seems like only yesterday when I transitioned from buying physical books to downloading them to my iPad. Now it’s down with downloads and on to the cloud. It’s hard to imagine what is behind the cloud, but I imagine it will open up more opportunities fir authors Nd readers.

    First things first, I’ll be looking up to the cloud..

  • Adeel Khamisa

    I was just talking about a need for a Spotify for books with a friend. My question is how many Publishers are on board and English language books are available? As a test what % of the current NYT top Non-fiction books are available freemium vs premium models? Are they thinking of a textbook model? Paying 9.99 a month is worth it if textbooks are included, but I don’t see publishers agreeing to that especially since Amazon has the rental model now for a much higher price.

  • Kyle Johnson

    Um, you do realize there is already a free service that provides you ebooks with no advertising, right? It’s called the library. Many libraries provide ebook checkout from the comfort of your home that you can read on multiple devices and sync your location. Instead of buying a subscription service from a company, just get a library card. If you really want to spend money monthly, donate something to the library.

  • http://www.zylun.com/live-chat/ Zylun Live Chat

    It’s good to hear that publishers are accepting this business model, at least to some degree. 24Symbols is leading the way of the inevitable course for book consumption in the future. If publishers don’t jump on board, it is likely they will struggle to reach significant readership. The downfall of Borders highlights the significance of transitioning books to the cloud.

  • http://sami.salkosuo.net Sami Salkosuo

    I am an indie scifi author and after reading this interview, I contacted Justo Hidalgo about publishing my ebooks at 24symbols.com. I was positively surprised and I signed the contract with them and my ebook, Stories from the Strangers’ Universe, was released on Monday, August 22nd, 2011.

    For me, 24symbols is another channel to distribute my books and I am confident that more channels will mean more revenue in the long run. Especially for all indie authors without huge marketing engine that would promote our books.