January 21, 2014
The concept of “literary Netflixes” has been gaining momentum in the past few months. Oyster, a book subscription service that launched four months ago, recently raised $14 million to expand. Many members of the publishing industry are cautious about adopting a subscription model for e-books because they believe it could cannibalize sales and devalue books. However, Oyster notes that despite the apprehension, it has been signing publishers and already has a library of more than 100,000 titles.
“Anybody who is not looking at subscription models is foolish,” said Tim O’Reilly, founder of O’Reilly Media. “First of all, recurring revenue models are great. Also, there is evidence in many areas that it’s what people want.”
Regardless of whether the subscription model would undermine traditional publishing businesses, it has yet to be proven whether books-by-subscription even appeal to readers. Additionally, the economics may make more sense for music and video than books.
“Oyster’s service costs $9.95 a month, or about $120 a year. (Scribd’s service costs $8.99 per month.) According to a 2012 survey by the Pew Internet & American Life Project, only half of people who read at least one book in the previous year had read more than six books. Buying books individually is likely cheaper for most people,” reports Businessweek.
Since Amazon currently offers 350,000 titles via the Kindle lending library, and its Amazon Prime subscribers pay only $79/year (cheaper than Oyster), including additional delivery deals and services such as streaming video, it may be challenging for other e-book subscription and publishing companies to compete.