Industry responds to Oyster closure

In the US, publishing industry consultant Mike Shatzkin and Smashworlds CEO Mark Coker have commented on the viability of ebook subscription services following the news that Oyster is shutting its operations. Shatzkin said in a blog post that Oyster’s business model—‘paying full price for each use of a book with a threshold trigger at considerably less than a complete read while, at the same time, offering consumers a monthly subscription price that barely covered the sale of one book, let alone two’—was ‘inevitably unprofitable’. Shatzkin said ‘it would be a mistake to interpret Oyster’s demise as clear evidence that “subscriptions for ebooks don’t work”’, citing the success of services such as Safari, 24Symbols, Scribd and Kindle Unlimited, but observed that ‘a stand-alone subscription offer for general trade books could not possibly work in the current commercial environment’ given the terms offered by the major publishers. In a post on Smashwords’ blog, Coker also pointed to the failure of Oyster’s business model. ‘Oyster faced the same headwinds Scribd is facing—namely that romance and possibly other genres were too popular with their subscribers and therefore too expensive to make profitable under the current model. The solution is you either need to pay authors less, charge readers more (or limit their reading), or something in between,’ he said. Coker also argued that Amazon’s Kindle Unlimited business model was making it difficult for other ebook subscription services to compete. ‘Unlike Oyster and Scribd which pay Smashwords authors and publishers full agency rates for qualified reads (after the reader reads more than about 10% of the book, it triggers a sale), Kindle Unlimited pays authors by the page, and at a rate that typically works out to only a fraction of the 70% list KDP authors get for single-copy sales … How can Oyster, Scribd or any bookseller compete when Amazon can pick the pockets of authors and give the savings to readers?’

Category: International news