E-book subscription service online by summer

Start up looks to take advantage of growing popularity of tablets and smartphones

Entrepreneur Morten Strunge is looking to change reading habits in Denmark when his latest venture, mofibo.com, opens for business this summer.

Strunge said that he has invested a considerable part of the 120 million kroner he earned selling his share of the telecommunications company Onfone into a new e-book subscription project.

"I was in New York last week and saw people everywhere reading on their iPads and mobile phones,” Strunge told Berlingske newspaper. “Most people in Denmark have a tablet or smartphone, and I think that we can get people to read more by starting this service."

Mofibo will offer books from several major publishers, including Gyldendal and Lindhardt & Ringhof. Strunge said customers will be able to choose between new releases and classics, but added that not every book would be available right away. 

"I believe that we will be able to offer about half of the titles on the current bestseller lists," Strunge said.

Mofibo will use a subscription model similar to the one used by music service Spotify, which allows users to stream and download an unlimited number of songs so long as their subscriptions are up to date. Mofibo's service works the same way, with e-books taking the place of tunes for less than 100 kroner monthly

Most listeners stream or download music today rather than purchasing CDs.

Netflix has transformed the market for TV and movies in much the same fashion, with viewers purchasing subscriptions that allow them to watch what they like on demand, rather than using commercial and public broadcasting.

"We are the first in Denmark to offer this kind of service for e-books and publishers have been very positive,” said Strunge. “In the US, 30 percent of reading is done on tablets and I am sure the same will happen here. I believe the market is ready for this service.”

Other countries in Europe – notably Germany and Spain – already offer subscription services, and publishers are interested in seeing how the concept plays in Denmark.

“Subscription services make sense,” Cliff Hansen, the general manager at Lindhart & Ringof, a publishing house, told Berlingske. “When Netflix can get nearly 400,000 subscribers in Denmark in almost no time, it is obvious that the model works.”

Hansen said that to be successful, authors and publishers will also need to be convinced that a subscription service is valuable to them.

“Mofibo must hit those customers that ordinarily would not come into a bookshop,” said Hansen. “Hopefully, it could help move catalogue works that have stopped selling in hardcopy, but there are no guarantees.”

Penguin head Tine Smedegaard Andersen said e-books still represent only a very small part of Danish book sales, but she is excited to see how the market will develop.

"It is always exciting when people try something new,” she told Berlingske. “We will be watching to see whether the model is sustainable for publishers, authors and customers.”

Public libraries, which have offered an e-book service eReolen since 2011, said that the new service poses no threat to them and will actually help increase overall awareness of e-books.

"The market for e-books currently represents less than five percent of the book market in Denmark,” Vagn Ytte Larsen, head of Danmarks Biblioteksforening, the library association, told Berlingske. “New models help increase awareness of digital materials.”

Pernille Drost, president of the librarian’s union, Bibliotekarforbundet, agreed.

"I think Mofibo will be a benefit to the public libraries by creating a stronger overall market for e-books and other digital materials.”

Drost hoped that once publishers realised the benefits of allowing e-books to be part of a subscription service, they would also be more inclined to collaborate with libraries to lend their materials.

Following its November 2011 launch, eReolen, which allowed e-books to be borrowed for free with very few restrictions, became so successful that some publishers began to fear for their earnings and pulled their titles.

In 2012, several publishers, including major players Penguin and Lindhardt & Ringhof, started their own service – eBib.dk – that permits a book to be lent four times before the library must purchase a new license.

"They argued that eReolen cannibalised the market and sent the message to potential customers that e-books were free," said Drost.

The two lending services each have their own content. The eReolen service is available at all libraries, but Copenhagen and Aarhus libraries do not offer eBib.

Larsen said libraries needed to able to offer digital materials to those who cannot afford a subscription service.

“It is important to find solutions that preserve the commercial market while respecting the long-standing Danish tradition of free access to information and knowledge that public libraries have guaranteed for over one hundred years.”