Subscription models: a glossary

Nathan Hull
Opinion Thursday, 4th March 2021

A la carte or all you can eat? In advance of the IPG Forum next week, Nathan Hull offers an introduction to online subscriptions

As partner of the Independent Publishers Guild's (IPG's) inaugural International Publishing Forum (9-10 March), Beat Technology will be hosting a series of one-to-one meetings to discuss bespoke a la carte and subscription platforms, owning the reader relationship, the benefits of rich usage data, and subscription economics.
A key aim of Beat's is to myth-bust and arm publishers, agents and authors with a stronger set of questions about subscriptions, enabling them to strike agreements and terms that best suit their needs.

The terminology used around subscriptions and audio business models in particular has become very muddy. The words and phrases are often interchanged incorrectly, frequently leading to misinterpretations and poor decision-making. Here's a simple starter guide:

A la carte (or download) services - services and platform will allow the user to download a file at a fixed price for that file. A copy of the file is transmitted fully from the service's server to reside on the user's device of choice.

Subscription services - services and platforms which allow users or family groups to pay an agreed monthly/quarterly/annual fee in return for streaming access to content. The user is at liberty to choose files to play at will with no additional payment or obligation to complete a title.

All-you-can-eat - a subscription service normally comprising a vast collection of titles to consume for the user's regular subscription payment. This has no caps and allows unlimited usage.

Flat-rate - as above, with the phrase indicating that consumers pay the same amount each month regardless of how much they listen to or read.

Credit-based (or token-based) - while the service may consist of a huge choice of titles, the user's payment (usually monthly) is for a credit or token redeemed for a title of choice each month. Audible's original model is the leading example of this (although technically it is also a subscription service).

Streaming - streaming is the term describing access to a collection of files which the user can access in return for a payment. No files reside on the user's device. The file streams from the platform's server to the user to listen to via their mobile data or wifi connection.

Download to own - the actual file is downloadable to a user's device, where the user may play it at will.

Revenue share model - typically this remuneration model looks at how many times a file has been listened to proportionately from the total pool of titles available. In effect this mean an audiobook has no fixed value but a fluctuating value based on its popularity within the pool in a given timeframe.

Pay-per-book model - this remuneration model sees the platform pay the publisher against a pre-agreed price for any given title. Often the publisher would grant the platform a discount against the DLP (digital list price).

Time-based model - this relatively new model (popular in Scandinavia) sees the publisher remunerated based on the amount of an audiobook that has been consumed. Typically this is based on the number of hours listened to.

Nathan Hull (CSO) and Njål Hansen (CEO) are available for appointments at the International Publishing Forum on Tuesday 9 March (10-12GMT) and Wednesday 10 March (10-12GMT).

Nathan Hull is chief strategy officer at Beat Technology, a company specialising in building tailor-made subscription and retail platforms for publishers. They're the pulse within Fabel (Norway), Skoobe (Germany), Nubico (Spain) and Chapter (Denmark).