(Updated) Inc. magazine just published a blog post titled Why Are E-Book Subscription Start-Ups So Hot? It mentioned Scribd, the PDF-and slideshow-hosting service which has just added a $9 per month subscription service for ebooks. Writer Stephanie Meyers concentrates on the tepid response from large publishers, but I wanted to highlight another view — what independent publishers and authors think about their ebooks appearing in a subscription-based catalog. I’m the founder of In 30 Minutes guides, and have authored many titles, including the just-released Twitter user guide, Twitter In 30 Minutes. I have some opinions about this topic, as well as some questions about how Scribd’s scheme works for ordinary authors.

First, it’s worth asking what authors will make from the service. It’s not clear. Scribd’s website urges readers to “support authors. Your proceeds go to writers” but the Scribd FAQ on the subject only says this:

Are authors being paid when I read books this way? Yes. Scribd’s subscription service operates legally through agreements with authors and publishing partners. Revenue that Scribd earns from monthly subscription fees is paid out to the original authors of the included titles, ensuring that they can continue to write great books.

GigaOM dug a little deeper, but no hard figures emerged:

Scribd — like Oyster — is a bit vague on how authors are being paid. Payments currently “vary a bit by publisher,” Adler told me, and said Scribd “[plans] to eventually be public about the terms.” But HarperCollins CEO Murray told Publishers Lunch, “We have negotiated very hard, to the point where if the whole business went this way, we and our authors would be very pleased, because the economics are more favorable…[it’s] the exact opposite of the music industry’s subscriptions models. The revenues that go to our authors is up, somewhat significantly.”

Murray is apparently referring to Spotify and other subscription-based music services, which are famous for paying content creators next to nothing. NPR reported last year that independent artists were getting $0.004 per play on Spotify, and many large artists refuse to place their music on the service. The same article reported that large music companies give artists less than a 20% royalty.

Think about that for a moment. Spotify and the labels get most of the money from subscribers and advertisers. The artists get the scraps. I’m very suspicious that HarperCollins’ arrangement with Scribd, far from being the “opposite” of the music industry’s subscription agreements with labels, will actually be very similar: The platform and the middlemen will make most of the dough, while the content creators get pennies.

So, Scribd, how much will authors get per read under your subscription plan? If it’s pennies per read, and it’s cannibalizing book sales, why would I ever sign up for such a scheme?

Update: See my follow-up post on this topic, Authors as an afterthought in the ebook subscription marketplace