You know what an e-book is, and you know what Netflix is (unless you have your head buried in the sand), but do you know about Oyster, the new “Netflix for books” start-up by a team of book lovers—Andrew Brown, Eric Stromberg, and Willem Van Lancker—who proclaim they sit “at the intersection of books and technology”?
Oyster is a newly launched e-book subscription reading app, currently only available for the iPhone and iPad, that has some in publishing wondering if it will revolutionize e-reading as we know it.
By offering an all-you-can-read smorgasbord of over 100,000 books each month—for a small monthly fee of $9.95—Oyster says it’s “pioneering a better way to read” and is digitally disrupting an already-disrupted market that is still trying to find its land legs.
In its shell right now, Oyster currently has one of the Big Five—HarperCollins—as well as other big publishers like Melville House, Houghton Mifflin Harcourt, and Workman. In addition, Smashwords—the world’s largest distributor for self-published e-books—signed a distribution agreement with Oyster to offer readers access to its more-than 250,000-book catalog of self-published e-books.
Sounds like a great deal for readers looking for cheap reads. But what about self-published authors, and even more importantly, publishers? Both authors and publishers themselves might stand to lose money with Oyster’s buffet-reading model. Especially if Oyster turns out to be like Spotify—it could mean a huge loss in profits for publishers and authors.
Spotify, which is another revolutionary platform that even Smashwords CEO Mark Coker has likened to Oyster’s e-book subscription app, offers a similar service for music lovers, with free and premium-paid services. With Spotify’s pay structure, music labels earn $0.0016 per song and musicians earn only $0.00029 per song, barely making minimum wage only after a song has been played a whopping 4,053,110 times.
It isn’t clear yet how royalties are being handled and what the pay structure is between Oyster and publishers. Without that clarity, everyone is left wondering if publishers and authors get paid whenever a reader downloads and reads a book or if content is paid for beforehand. Even Smashwords, which does not use DRM, hasn’t yet made the pay structure available to its authors, though it claims that it is “an author friendly deal” and expects that authors will be pleased with the arrangement.
Still, the e-book subscription model is new and hasn’t yet shown how effective it might be in this ever-evolving publishing industry. On such shaky ground, a Netflix-esque service like Oyster’s has a long way to go to solidify its place in the industry. Especially when authors like J.K. Rowling have already proven success with a direct sales channel—without the need for DRM.
At its heart, Oyster is only a book renting service and offers “access, not ownership”—according to one of its founding members, Willem Van Lancker. And Oyster isn’t even the only one of its kind. Scribd, eReatah, and other e-book subscription platforms are popping up all over the place. Scribd, which is offering a service nearly identical to Oyster’s—except for its slight price difference at $8.99—gives users access to unlimited books from any smartphone, tablet, or laptop device. Users will also have the opportunity to buy titles directly, instead of just renting them for a monthly fee. And like Oyster, Scribd also has HarperCollins in its pocket and is hoping to get other Big Five publishers on board. But how they respond still remains to be seen.
One thing publishers don’t have to worry about from Oyster, says Ariha Setalvad, is that its e-book subscription service is no danger to brick and mortar bookstores.
But sites like Amazon might have something to worry about. According to Hamish McKenzie, Oyster’s e-book subscription model “is a potential threat to Amazon’s status-quo ala carte model, [sic] particularly when it comes to casual readers who aren’t fussed about getting their hands on the new bestsellers as soon as they’re released.” It stands to reason that Amazon will be paying close attention to Oyster to determine whether it will attempt to offer a similar service, or just beef up its current Kindle Lending Library, which allows Amazon Prime members to borrow from more than 350,000 books for free on their Kindles.
Of course, if it’s within Amazon’s capabilities to counter with an e-book subscription service model, why can’t publishers come up with their own solution to rival Oyster’s e-book subscription model? Because publishers need to be innovative—they can’t afford to get left in the dust…again.
By building a direct sales channel, the way J.K. Rowling did for Pottermore, publishers can utilize the power of each individual author’s brand and marketing to reach readers better. With authors—self-published and traditional, alike—taking on more marketing responsibility in this new digital era, a direct sales channel also eliminates any walls or middlemen between publishers, authors, and readers. Which is something the publishing industry is in desperate need of right now.
So the question is, does Oyster’s e-book subscription service model have what it takes to be sustainable long-term? Or will it succumb to a digital disruption from the very industry figureheads it’s hoping to procure?