Scribd’s Traditional Royalty System Proves Costly

Last week I wrote about how Amazon has changed the way royalties are paid out to authors when their books are borrowed from Kindle Unlimited or Kindle Owners’ Lending Library. They went from paying out a royalty when a reader read 10 percent of a particular book to paying out a royalty per page. I applauded the system because it’s more fair than the previous one. Now we’re given a prime example of what happens when you use a traditional royalty payment system for borrowed books.

Scribd does. They pay out a royalty for every book borrowed, regardless of how many pages are read. And it’s coming back to bite them in the you know what. They announced last week that they will be removing many romance and erotic titles basically because they can’t afford to keep paying the royalties. People are reading them too much and the $8.99 a month subscribers pay just isn’t going to cut it. So, titles are being removed from their catalog.

Now think about this. What if you subscribed to one of these services (Kindle Unlimited & Oyster being the other two) and your genre of preference is romance. And you’re reading along every month enjoying all these romance novels. And then the service decides to remove thousands of books that all happen to be in your favorite genre. Wouldn’t that be a little irritating? I think so. And it just goes to show that a traditional royalty system is not the answer to subscription based book services.

What do you think about Scribd having to remove romance titles because people are reading them too much?

14 thoughts on “Scribd’s Traditional Royalty System Proves Costly

  1. Wait, wait, I’m confused – just to clarify, do readers now have to pay per page? Or is it the authors that don’t get paid as much if half of their book goes unread? How does that scenario translate to Scribd having to remove its romance novels (shoot – I am in the wrong genre! haha) – if a subscription rate is $8.99 how would paying novelists per page read save Scribd money? Do people start the romance novels and not finish them…

    I read an article about this when it happened and at first I was outraged – but now it seems I just don’t understand… Interesting post, thanks for sharing.

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    • Amazon now pays per page read AND from a set amount of money they set prior to each new month. Which means that total royalty payouts depend on the number of pages read by a particular author relative to the total number of pages read during the month. Scribd doesn’t do that. They pay their royalties out according to the retail price of the book, and it doesn’t matter if the book is ultimately read or not. You see, Amazon does not take into account the retail price of the books borrowed through Kindle Unlimited or Kindle Owners’ Lending Library because people aren’t actually buying those books.

      Scribd is having to remove books now because people are reading romance books at a high rate and Scribd is being forced to pay high royalties that they can’t afford. Remember, the royalties are based on the retail price of the book. I read that close to 90 percent of the romance catalog from Smashwords that was available on the service will be removed. Unless it’s priced to be free.

      I have no idea if I even answered your questions, but you can always just Google yourself and find out that way if I didn’t.

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      • Oh my goodness – times are truly changing! Just a few years ago we were all reading paperbacks and if we didn’t finish that was our problem. Curious (and scared!) to see where this is all going – one thing we can count on. Humans will never tire of story.

        Thanks for your reply!

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      • Amazon’s new system only applies to borrowed books. Books bought are books bought. Doesn’t matter what’s read and what isn’t.

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  2. That’s just poor planning and foresight on their part.

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  3. Yep, that would be incredibly irritating. I’m a mostly romance reader and the reason I went with Scribd over Amazon Unlimited was because all the authors and books I want to read were offered by Scribd. The debate of AU over Scribd is a perennial topic that comes up in my reader circles and that is usually the general consensus, as well. They start taking my titles away, I’ll be taking my money away. It would behoove them to either up their subscription price a buck or two or follow Amazon’s lead.

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    • I’ve seen some suggestions that they should offer different priced tiers for their customers. But I have no idea if that would help solve their problem or not. They need to change something because removing titles just isn’t the answer.

      Liked by 1 person

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