As competitors in the e-book subscription market, Scribd and Oyster like to emphasize their differences. Yet the two share a common talking point: They both drop the name HarperCollins.
The New York-based publishing house, whose roots date back to 1817, was the only one of the Big Five publishers to offer some of its backlist titles — and perhaps more importantly, some of its prestige — to these startups at launch, helping to kickstart the fledging Netflix-like e-book subscription market.
"They intuitively got what we were doing right from the first meeting," Trip Adler, Scribd's CEO and cofounder, told Mashable in a recent interview about his interactions with HarperCollins. "They operate the most like a technology company in terms of their willingness to try new things."
See also: 5 Startups Working to Improve the E-Book Reading Experience
For HarperCollins, working with Scribd and Oyster is part of a larger strategy to experiment and experiment often, with the goal of being early to new digital reading business models, whatever they may be.
"If you are early, you get more leverage," Chantal Restivo-Alessi, HarperCollins' chief digital officer, told Mashable earlier this month. She argues that publishers like HarperCollins have more of an opportunity to "guide the thinking" of startups in a new space like e-book subscriptions when it's just getting started rather than when it's already fully off the ground. "If you are early, you can have a bit more say on the terms because you got a premium for being there early."
Restivo-Alessi, a former executive at music label EMI, joined HarperCollins in mid-2012. Some might say it was already late in the digital book game when she was hired. Amazon had pushed publishers to embrace the e-book market five years earlier with the launch of the first Kindle. In typical Amazon fashion, the e-commerce giant chose to exercise control over the pricing of digital books.
In his book The Everything Store, author Brad Stone recounts that the big book publishers were blindsided when Amazon announced at the Kindle launch event that e-books would be priced at just $9.99. That moment, perhaps more than any other, highlighted the power shift in the publishing industry.

While Amazon may go down as the company that helped spark the digital reading era by corralling publishers to accept e-books as a legitimate format, HarperCollins had made moves towards digital in earlier years. In 2005, for example, the publisher set out to create a digital library that would be easily searchable online through services like Google and Amazon. The person who championed that initiative, HarperCollins' group president Brian Murray, took over as CEO in 2008 and later brought on Restivo-Alessi to report directly to him with the goal of growing digital revenues.
Restivo-Alessi's staff consists of a mix of book publishing veterans and people from other media categories, such as the music business and the video game industry, who pursue alternative business models and product innovations. In addition to working with Scribd and Oyster, HarperCollins has partnered with startups like Curriculet to test the concept of e-book rentals for schools, and a company called Inkling to try its enhanced digital publishing platform.
The HarperCollins team is also working with Accenture to sell e-books directly to consumers — starting with the works of C.S. Lewis at cslewis.com and Narnia.com, with the possibility of more launches for other authors and genres — rather than going through intermediaries.
Each of the publisher's imprints has someone overseeing digital product development. That person consults with editors to find ways to experiment beyond the e-book, which Restivo-Alessi refers to as "an obvious element" of the publishing process. That might mean adding video content or creating a custom app to enhance the reading experience. To that end, HarperCollins recently released an app called Unbound that scans print books to pull up digital extras on your phone.

"Publishers have historically been the most innovative and creative of organizations," Charlie Redmayne, head of HarperCollins UK, said in a recent interview with The Guardian. "But I think that when it came to the digital revolution, we came to a point where we stopped innovating and creating. We thought, we've done an ebook and that is what it is."
Restivo-Alessi won't go quite as far as her colleague, but she agrees that the publishing industry is "very conservative" in experimenting with new business models in part because of the "healthy growth" in e-book sales in recent years. "I personally think that's short sighted," she says.
Every HarperCollins digital experiment is intended to contribute to the bottom line, according to Restivo-Alessi, whether through direct sales or indirectly by retaining and wooing more authors, but some of that might be wishful thinking. Allen Weiner, a technology analyst with Gartner, questions the wisdom of multimedia add-ons for books in particular, noting that consumers won't likely be willing to pay more for these features. As for whether it improves the reading experience, he believes it may be good for cooking and travel books, but for other genres like fiction, "it's a tick below nice to have."
HarperCollins' e-book sales increased 30% in the September quarter from the same period a year earlier and now account for more than a fifth of the publisher's revenue. Those gains haven't been enough to offset declines on the print side, however, as HarperCollins' overall revenue for the quarter dropped 7% year-over-year. That matches the general trend in global book publishing of growing e-book sales, but overall declining revenues, as seen in the chart below from PricewaterhouseCoopers.

The bigger incentive for publishers like HarperCollins, Weiner says, is to use apps, direct-to-consumer sales and other digital experiments to build a stronger connection with readers in the hopes of learning more about them. "One of the biggest issues facing publishers today is knowing a lot about the people who are buying their books," Weiner told Mashable. "When you sell through a third party [like Amazon], you really don't have that."
Chantal says HarperCollins has no interest in replacing Amazon or being a retailer — even though Amazon has become more of a publisher with Kindle Singles — but she and the company don't want rely solely on Amazon or Apple for innovation on the digital front, either. In her opinion, the best word to describe the publisher's relationship with these two tech companies is "frenemy."
"At times we are enemies and at times we are friends. When it comes to commercial negotiations, everyone is back on their high horse… but we are all there in partnerships to grow our businesses," she says. "I don't want to be only dependent on their innovation but I am always happy to talk and participate in their innovation, too."
HarperCollins certainly isn't the only major publishing house to invest in digital innovation. Random House has tried its hand at mobile gaming, Simon & Schuster has developed enhanced books and apps and MacMillan has taken the bold step of launching a dedicated venture fund to buy and develop "innovative technologies" for educational products. But HarperCollins is trying to be more aggressive than others in testing new business models.
"What you learn from digital companies and startups is the willingness to experiment is half the journey," Restivo-Alessi says. "You put out something, you learn fast and you ditch stuff that doesn't work, and then you carry on experimenting."
"Some things will stick and some things will hit big," she added, "but you don't know ahead of time."
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