Remember how disruptive the $9.99 ebook pricing model was when the Kindle launched in 2007? It set the standard for how much consumers expected to pay for an ebook. It was also a price far less than consumers were accustomed to paying for the same book in print format.
Amazon has evolved a bit since then and now also offers the Kindle Owners’ Lending Library (KOLL) program, where Amazon Prime members can borrow one book a month from a catalog of more than 500,000 titles. Since KOLL is free with your Prime membership the perceived value of KOLL-eligible ebooks drops even further.
I recently signed up for a similar model from Oyster: $9.95 per month provides unlimited access to Oyster’s 100,000+ ebook catalog. I’m sure some of these books are part of KOLL, so why would I pay an additional $9.95/month for Oyster?
One (hyphenated) word: All-you-can-read.
Oyster definitely has a no-frills feel to it. It’s currently only available on iOS and you won’t find a lot of bells and whistles with their reader app.
But Oyster also has a lot of great books I’m interested in, including several I hadn’t discovered before. In fact, I’m finding there are so many to read that I can’t possibly get to all of them anytime soon.
Here’s the problem traditional ebook retailers should worry about: A model like Oyster’s starts to squeeze out the other books I thought about reading. Ebooks you absolutely want to read will still be bought if they’re not part of an all-you-can-read subscription, but all others become irrelevant.
Why would I spend $10 for an ebook that’s not a “must read” for me when I can find plenty of others I want to read that are part of my $10/month, unlimited subscription? I had more than a dozen samples queued up in my Kindle account to read and now I don’t care about any of them.
How can Amazon compete with this? Their KOLL program is hamstrung by their existing deals with publishers. Publisher resistance is undoubtedly the reason KOLL only lets you read one book per month. Oyster, on the other hand, had no existing model or agreement with publishers and can therefore build their model and publisher relationship from scratch.
That sounds like a chapter from The Innovator’s Dilemma, doesn’t it? And how ironic that this disruption is happening to arguably the biggest disruptor of the Internet era?
Oyster’s catalog only has 100,000 titles so it’s clear many publishers aren’t participating. That’s OK though. I checked out a couple of my favorite genres and quickly found more than 10 titles I can’t wait to read.
The Oyster model further tilts the market towards the risk-takers as well as the self-publishing houses. The naysayers and other publishers who sit on the sidelines will need a compelling reason for consumers to pay full price for their ebooks and they’ll risk giving further ground to other, lesser-known titles and authors.
What a great time to be a reader…but what a challenging time to be a publisher or author. It doesn’t take a mathematician to see how an all-you-can-read model chokes the revenue stream for publishers and authors. This model may be new to written content but it’s been around awhile in the music sector thanks to Pandora and Spotify.
What sort of pain can book publishers and authors expect if Oyster and other all-you-can-read models take off? Check out this musician’s story. Her music was streamed 2.8 million times but generated only $5,022, or less than two-tenths of a penny per stream. What we don’t know is how many of those streams led to someone buying one of her tracks or albums. That type of upside potential is more likely in the music market than it is in the ebook market though.
Will Oyster cause the existing ebook model to implode? No, of course not. Amazon will probably use Oyster as leverage with publishers to create something even more compelling than KOLL. That, or they’ll just buy Oyster with Jeff Bezos pocket change. I hope the latter doesn’t happen though since it will be interesting to see how much of an impact Oyster can have on the current market.