Subscription services ADIBF May 7th 2015

Kåre Halldén CEO & Co-founder

Readly Books Stockholm, Sweden

The next 45 minutes

• Subscription services

• Small market perspective

• Lessons learned

• Global (?) market view

• Untapped opportunities

• Questions?

About Readly Books

• Swedish digital book subscription service

• All types of books

• Joint venture

About Readly

• Streaming Magazine service

• Available in Sweden, UK, US and Germany

• Books (Sweden only)

Our background

• - a Swedish Content Management System

• Digital publishing for international media companies, such as…

Our background

Sweden

Sweden

Sweden

Sweden - Literature

Sweden – Book market

• Total value sales about €350M (UK: €1,900M)

• Declining sales last few years

Sweden – tech access

• 91% of Swedes have a computer

• 73% of Swedes have a smart phone

• 51% of Swedes have a tablet

Sweden – tech access

• 37 % of e-commerce from mobile devices

• 84% of Swedish 5-8 year olds have access to a tablet

Sweden – Ebook market

• About 2%...

– Most of which is library e-lending

Why?

• Small language area – ROI difficult for publishers

• Digital rights slow to adapt

• E-readers never caught on

• No Amazon…

The challenge (Sweden)

• Every market needs a catalyst

• The attention economy

• Young people’s reading competence down

What we did

Timeline

March 2013

March 2014

Readly Magazines Launch (SE)

Readly Books Launch (SE)

Publisher terms

• Equal terms

• No risk, no obligations

• Revenue share – 70% to publishers

• Better content=more revenue

Publisher motivation

• Monetize backlist

• Stimulate growth in digital reading – right timing

• Free of charge. Zero conversion cost.

• Reading patterns

Publishers

Customer perspective

• All the benefits of a subscription service:

– Full access everywhere (incl. offline)

– Fixed cost

– Growing catalogue

General e-book offering

Full family reading service

Casual reading

• Cookbooks

• Exercise / dieting

• Music, photography

Children’s books

• Intuitive experience

• Alternative to Angry Birds

• No interaction, no sound, no buttons

• We rely on the narrative – the book isn’t broken

Our target group

• People who don’t like to read…

What do people read?

The Global Subscription Market

Ebooks: The final subscription frontier?

Subscription services: English language

Subscription services: International

Trends

• The Volume Game…

– Majority of titles backlist and self-published

• Target: the avid reader

– Selling the discount

• Globalization (?)

• Diversification

– Audio books, ebook sales, curation efforts

Opportunities

Focus on demand, not supply

No of available titles per category:

Children'sBooks

Non-fiction

Fiction

Focus on demand, not supply

No of page views per category:

Children'sBooks

Non-fiction

Fiction

Focus on demand, not supply

No of readers per category:

Children'sBooks

Non-fiction

Fiction

No of readers per title (average)

Children's Books Non-fiction Fiction

Children's Books Non-fiction Fiction

No of page views per title (average)

Reading distribution – all categories

Reading distribution – Children’s Books

Most popular sub-categories

What’s missing?

• #1 title in Readly Books: Gone Girl

What’s missing?

• #2 title: Husmanskonst

– Cookbook

– Released in 2006

– Out of print

– Not available as e-book

Limitations of current business models

• Short term publisher profit

• Misaligned motives

• Designed for certain book type – linear book consumption

Going global?

• Small language = broad content service

• Large language = niched services

Untapped opportunities

• Illustrated literature

• Children’s books, e.g. school library

• Non-latin script?

Questions?

(all but ”How many subscribers do you have?”)

Kåre Halldén, CEO & Co-founder

kare.hallden@readly.com

ph: +46 (0)733 624 685

Gustav Winberg, COO & Co-founder

gustav.winberg@readly.com

ph: +46 (0)72 187 79 70

Look forward to hearing from you