There has been a sudden influx of e-book subscription services that allow you to read as much as you want, for a low monthly price. Adults have been gravitating towards Entittle, Kindle Unlimited, Oyster and Scribd. When it comes to our kids though, there are scant options, aside from Amazon Freetime Unlimited. Is there room in the market for a major player to target kids?
The entire concept of Netflix for e-books really took off at the end of 2013, but 2014 was the banner year. Major publishers started to take seriously an alternative revenue stream that could run in conjunction with selling e-books on Amazon and libraries. Many of the companies involved in this space rely on venture capital in order to stay in business, because its a new segment of the industry.
Scholastic got involved with selling e-books back in 2012 when it launched Storia. They sold digital books on an individual basis and built a number of apps for Android, iOS and dedicated devices like the Kindle Fire. It wasn’t the success they had hoped for and they decided to scuttle the service in 2014. Readers were not left in a lark because Scholastic offered refunds on most content purchased.
In order to seem progressive, Scholastic launched a new e-book subscription model six months ago. Subscriptions start at $2,000 and will be based on the size of the school and the amount of users that will access the collection.
Currently there are 2,000 titles in the Storia School edition and teachers have the ability to make dedicated shelves and collections for their class. This assists in being able to customize the platform to suit age group and the overall focus of the specific class.
There has been no news from Scholastic since the program first launched. They have not issued in press releases or corresponded with the media in anyway. The only mention of Storia was from the latest financial quarterly figures for children’s books. “Segment revenue in the third quarter was $202.9 million, compared to $190.0 million in the prior year period, an increase of $12.9 million, or 7%. In School Book Clubs, higher engagement levels of both teachers and parents, evidenced by a higher number of orders, drove a $10.0 million, or 17%, increase in revenues to $70.2 million, compared to $60.2 million in the prior year period. In School Book Fairs, revenue increased by 2% to $91.2 million, reflecting higher revenue per fair, as compared to $89.2 million in the prior year period. The harsh winter weather in many parts of the United States and related school closures had an unfavorable effect on the number of fairs held during the quarter. In Trade, sales of the popular Minecraft Handbook series and core backlist titles, including the Harry Potter series, helped drive a 2% increase in revenues to $41.5 million, versus $40.6 million in the prior year period. Overall segment operating loss improved by $8.4 million, or 79%, to a loss of $2.2 million versus a loss of $10.6 million in the prior year period. The year-over-year improvement was primarily the result of the higher sales volume, together with lower operating expenses and lower technology investment, including in Storia School Edition, partially offset by higher promotion spending in Clubs in the current quarter.”
So is the digital e-book platform for Storia for Education viable? It does not look like its moving the needle on a financial level and I am always very concerned when a company never publicly talks about it. No schools have ever done business with them that frequent our website, and they are among the most tech savvy.
There is another iteration of Storia in the works that will be aimed at parents of young children. Currently there is zero information about the platform, other than it will launch “sometime” in 2015. It will offer the same catalog of content as the schools get, but is basically just aimed directly at the consumer. Will parents buy into this? Will kids want to choose from thousands of books, or feel completely overwhelmed?