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Oyster Takes a Crack at E-Book Subscriptions

Oyster Takes a Crack at E-Book Subscriptions

Will the subscription model be as transformative for books as it has been for music and movies? That remains to be seen. "The idea has great potential," opined Greg Sterling, principal analyst at Sterling Market Intelligence. "Most of the books we read, whether in print or electronic form, we don't need or want to own. So the idea of digital lending or digital subscriptions is valid."

By Peter Suciu E-Commerce Times ECT News Network
09/07/13 5:00 AM PT

The subscription model has already proven its mettle when it comes to music and movies, but this week Oyster unveiled a new service that applies the concept to books instead. Specifically, the startup on Thursday launched an invitation-only preview of an e-book rental service that's widely being described as the "Netflix of books."

Now available via an iPhone app that's free to download, Oyster offers a subscription service whereby users can read as many books as they want for a monthly fee of US$9.95.

Oyster

With publishing partners that include HarperCollins and Houghton Mifflin Harcourt, Oyster now has more than 100,000 digital books in its online library, including popular titles such as The Lord of the Rings,The Chronicles of Narnia series, Life of Pi and Water for Elephants.

"Oyster is for both the avid reader and those looking to rediscover their love for reading," Willem Van Lancker, cofounder of Oyster, told the E-Commerce Times. "We've worked very hard on our book discovery experience to empower users to pick up books they might not have otherwise read.

"With access to over 100,000 books anytime, anywhere, users no longer have to make purchase decisions," Van Lancker added. "They have access to the books they want, when they want them."

'The Idea Has Great Potential'

Oyster's iPhone app gives users a choice among five different themes as well as the ability to adjust text size and screen brightness and both search and discovery capabilities. The service's considerable library of books can be browsed by title, author and keyword.

No specific plans have yet been announced to offer the service on platforms other than iOS.

"We will be releasing on iPad this fall and intend to roll out Oyster to other platforms in the future," Van Lancker noted.

Based on the "all you can eat" model used by Netflix and others, the service aims to make discovery a key component of the application. In the bricks-and-mortar scheme of things, it's much more like a library than a bookstore.

"It's a different angle, subscription as opposed to purchase," Roger Kay, principal analyst at Endpoint Technologies Associates, told the E-Commerce Times.

"The idea has great potential," opined Greg Sterling, principal analyst at Sterling Market Intelligence. "Most of the books we read, whether in print or electronic form, we don't need or want to own. So the idea of digital lending or digital subscriptions is valid."

A Matter of Royalties

While Oyster has already signed up multiple publishers, it isn't yet clear how authors will respond.

"I'm assuming they have the royalty situation worked out, but that could be complex," added Kay.

"The question for Oyster is whether it can gain the coverage and rights to most popular titles," Sterling told the E-Commerce Times. "If the selection is there, it has a fighting chance. However, $9.95 per month might strike many people as too expensive."

Still, "at least half the U.S. adult population reads more than six books per year," Sterling added. "If they do the math, an Oyster subscription may be more desirable than buying equivalent print or even e-books outright."

The Amazon Factor

Also remaining to be seen is how Amazon might respond. The book-purveying giant came into the market in the mid-1990s as one of the first big online retailers and disrupted the way people bought books -- as well, eventually, as most everything else. The company likely won't give up the book market so easily.

"Oyster is new and Amazon has deep brand equity," noted Kay.

Oyster's model is also unproven, he added.

Most likely, "Amazon will watch for a while and see what happens, letting Oyster in effect do the market research free of charge for Amazon," Kay predicted. "If it seems to be catching on, Amazon can easily duplicate the functionality."

Then, too, of course, there's the humble local library.

'A Bit Hyperbolic'

While a novel concept and "one that initially has gotten a lot of buzz due to the seeming potential for this to be as disruptive to books as Netflix was to the movie rental industry, that's a bit hyperbolic," said Chris Silva, principal analyst at High Rock Strategy.

"Unlike movies, there's a value to keeping possession of books in a library for future reference or research, which Oyster does not allow," Silva told the E-Commerce Times. It is also "curious that the platform is limited to iOS at launch and included no support for e-readers.

"Looking at data from Publisher's Weekly from last year, while iPad e-book sales were growing, they still only accounted for a portion of the 50 percent of sales going to dedicated e-readers," he pointed out. "In addition, the Kindle Users Lending Library, while limited to one book per month, comes with all the benefits of Amazon Prime, including Prime Video."

'Not a Great Position'

The result is "not a great market position for Oyster," Kay suggested.

"Also, for this to make sense, Oyster has to find people who read enough to make the value prop work," he noted. "It's hard to compete against free when all you can offer is convenience."

Ultimately, though, the competitors with the most to lose may be brick-and-mortar book shops.

"It's another worrying development," Sterling concluded, "and a potential nail in the coffin for traditional booksellers."


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