October 16, 2013 Last Updated 10:29 am

Oyster updates iPhone app to add iPad support, seeks to expand Netflix model to eBooks

The start-up company Oyster wants to expand the Netflix model to eBooks and has updated its iPhone app, originally launched in August, to add in iPad support. Oyster is a stand-alone app that only works if you have created an account with the company online. If you remember, this is the way the Netflix app launched before eventually adding in the ability to create an account in-app.

Oyster-app-icon-smOyster’s model is to offer unlimited eBook access for $9.99 per month. The company offers more than 100,000 titles, it says, though it is limited right now to the iOS platform.

The question that is obvious is whether consumers have room for yet another subscription service. Everything has gone to subscriptions, from online news websites, to movies and music, to now books.

Oyster is also limited to reflowable ePub book files. This means the format is perfect for novels and other text heavy genres, but not for art heavy works that require fix format layouts.

Although Oyster does not give precise details as to how this all is to work for publishers, it does hint that deals are struck with publishers on a case by case basis.

Oyster-screen-lg“We’ve worked hard to create a sustainable business model that provides value to readers while providing attractive economics to publishers and authors,” the Oyster website states. “In order to deliver readers the best content, Oyster has direct agreements with publishers and aggregators, to whom Oyster regularly makes payments based on how often their books are read on Oyster. These companies then pay authors based on the specific agreements they have with their authors.”

Oyster does not currently work directly with authors, but it does partner with Smashwords.

To attract major publishers Oyster will need to be able to throw some money around while it is trying to build its base of subscribers. To that end, the company has raised $3 million from the San Francisco based venture capital investment firm Founders Fund.

The problem with the business model, from Oyster’s perspective, is the lack of barrier to entry (other than money). Pandora and Netflix may have pioneered the unlimited access model for music and movies, but Spotify, Google, Amazon and Apple are now in the space. There is certainly nothing to prevent others from entering the subscription space for eBooks except working out the publisher deals.

From the publisher perspective, the attraction is two-fold: Oyster is not about new releases, so profiting from back catalogs is attractive, as is the added distribution channel. Whether it actually makes money for publishers, though, or instead simply lowers the value of books is to be seen.