Oyster, the e-book subscription service that offers more than 1 million books to digital-age bibilophiles for a flat monthly fee, is going retail.
On Wednesday, the company announced that it is launching an e-book store on its platform. Oyster says it has corralled all of the Big Five publishers to contribute their book offerings to the service, including Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster. That means users can buy and read virtually any book from those publishers on their smartphones or tablets, including new releases and pre-orders. It’s also opening up the store to non-subscribers.
The new retail store is an expansion to Oyster’s existing book subscription service, which some have dubbed “Netflix for Books” because it offers a similar “all you can eat” option, except for books instead of video. The internet already offers an almost limitless number of digital things for individual purchase—books, movies, songs. But increasingly, people are choosing subscription services instead, which lets them get a comprehensive catalog for a few bucks a month instead of downloading each item piecemeal. In Oyster’s case, users pay $9.95 a month for access to books from three of the Big Five publishers.
So why bother adding retail to the equation? According to Oyster, it’s because there’s rarely a way for subscribers to browse and discover certain books on these services—especially new releases and pre-orders. Oyster says it wants its users to have the best of both worlds.
“For us, this is a natural extension of the product to allow the readers to do all of their reading on Oyster,” says CEO Eric Stromberg. “This launch takes the best of what we built with our subscription service and adds the e-book purchase model.”
Amazon’s Own Game
Last summer, Amazon launched Kindle Unlimited, which now gives subscribers access to more than 800,000 titles for $9.99 a month. But it doesn’t have the Big Five publishers on board—and it may not be close to striking any deals with them. The internet retail giant has clashed badly with the publishing industry in the past, most recently over online book pricing with one of the top five publishers, Hachette. The conflict was settled only last November.
This conflict also creates an opening for companies like Oyster and Scribd to exploit. But beating Amazon at the broader a la carte e-book sales game is a more daunting prospect. The main advantage Oyster appears to have is its relationships with top-tier publishers. The model works like this: Oyster pays publishers a sum of money each time “a fair portion” of a book is read on its subscription service. It also shares valuable reader data with publishers in the aggregate. It’s an unusual practice; subscription services in other media rarely share data with content producers themselves, so publishers have good reason to get on board. Now, with Oyster adding a retail store into the mix, publishers can target new releases and pre-orders to an audience they already knows to be interested in a particular book or genre from their catalogs.
“If you look at the industry, there’s about 8,000 books published by the Big Five publishers every year, compared to about 120 films released in theaters by the Big Three movie producers each year,” says Stromberg. “There’s a lot more great books that are published every year in books, and only a fraction of those—less than five percent—get meaningful marketing. What the subscription model is really good at is finding an audience for those books.”
Since launching its subscription service in September 2013, Oyster says it’s seen major growth. The company doesn’t publish data on its monthly active users, but it says that last month, users read over 100 million pages, compared to 8 million pages in December 2013. It may never catch up to Amazon, whose Kindle finally sent e-books into the mainstream. But by playing nice with publishers, Oyster has at least created one way to set itself apart.