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Subscription service Oyster hits the rocks

5 October 2015

The announcement that the subscription service Oyster is to close down has prompted a lot of ruminating on the subject of how these services work.

Simon Dunlop, CEO of the competing business Bookmate, said that Oyster had a flawed business model because of publishers' indifference towards the idea. In fact they were worse than indifferent and seem to have been hoping it would fail. That's why Oyster had a relatively small list of titles in their catalogue. Publishers have tended to see subscription services as representing a race to the bottom on pricing, as well as competing with their own ebook publishing.

Oyster, which was launched in 2013, offered about one million titles for a monthly fee of £9.95 and was widely seen as the Netflix of books. To try to bring the publishers round, they were also offering them a full retail price. Oyster was caught between the fixed costs of selling their catalogue and an ‘all you can read' approach for their customers.

The other competitor in this field is Amazon's Kindle Unlimited, where authors are paid by what's actually read at the rate of half a cent a page, ie around $1.50 for an average length book, and which pays according to what is read. This could be a particularly bad deal for an author if readers tended not to finish their books. Maybe this has a certain logic to it, but it is shifting the burden of risk in the purchase from the buyer to the author.

Others sites have also had difficulty with the subscription model, with Entitle closing in July and Scribd having to limit the number of books available in the categories of Romance and Erotica, because the readers simply read too much, making the whole thing too expensive.

But what does all this have to do with authors? Well, obviously it affects' authors earnings and thus risks diluting royalties. US Authors Guild executive director Mary Rasenberger said:

"While some authors would do okay taking less per book in a subscription model, whether because they are building a brand or making old books newly discoverable, most will lose money, and a lot of it. Asking everyone to take a cut to support a business model that works only for some is a non-starter."

Writers have to be assertive about protecting their income from their writing, which is under threat from all directions. Cheapening books by making them into commodities to support a risky business model is not in authors' interests.