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Netflix and Spotify have built multi-billion dollar businesses by offering subscription services for film and music, respectively, but no company has really made this model work for digital books. Now, Oyster has revealed its first attempt to change that.

Oyster, a New York-based startup, made headlines late last year when it announced raising $3 million from Founders Fund to build out a service that would offer "unlimited access" to e-books. On Thursday, the startup launched its e-reading app for iPhone, which is available on a first-come, first-served invitation-only basis for now.

With the iPhone app, users get access to more than 100,000 ebooks from hundreds of publishers including Houghton Mifflin Harcourt, Melville House and one of the "big five" publishing houses, HarperCollins. Oyster will charge users $9.95 a month to read as many e-books as they like.

"People love accessing things when they want it with one price," Eric Stromberg, co-founder of Oyster, said in an interview with Mashable. However, he believes a few obstacles have held back most startups from trying to do the single price subscription model with e-books: "Any company that does this needs to be really good at technology, at product and on the partnership side of things, and building a core area of expertise in each of those."

eReatah, another new ebook startup, is also trying to make the digital book subscription concept work, but with a very different pricing model. Rather than charge on flat monthly rate for unlimited reads, eReatah offers three tiered prices ranging from $16.99 a month for two reads to $33.50 for four reads a month.

While the tiered pricing model could prove to be a better deal for publishers and authors, Stromberg says his team tried to learn from existing digital subscription services and put together a revenue model that "really puts the rightsholder's interest first and makes sense over decades." That said, the team is somewhat open to other pricing structures in the future. "If we can provide a great experience kind of in a freemium model, we'll work towards that," said Willem Van Lancker, one of the three co-founders.

The novelty of the subscription model for ebooks almost overshadows some of the more subtle but significant changes Oyster is trying to make to the e-reading experience. Like Netflix and Spotify, Oyster doesn't just provide easier access to content, but also aims to help users discover and share content. The books are organized into genres similar to Netflix and every user has a social profile in the app and can follow the reading activity of other users they're connected to. There are also built in options to share books to Facebook, Twitter and even Instagram.

Beyond that, Oyster made the interesting choice to concentrate on the smartphone reading experience first, rather than tablets, where one might assume most people do their long reading. The reasoning, according to the founders, is simple: many more people carry around smartphones than tablets. To make it work, though, Oyster's team rethought the e-reading design: Users scroll through the text from top to bottom rather than right to left, and they have more customizability over font type and size.

The two biggest issues for Oyster are of course price and selection. Oyster's 100,000 books includes a nice range of classics and modern titles, but at launch it's lacking many bestsellers and brand new releases. For the casual user, paying $120 a year for a service like this makes the most sense if you don't have to pay much more on top to read other releases not available to rent. In my own experience, many of the books I searched for — from well-known authors like Jonathan Lethem, George Saunders and Anthony Swofford — were unavailable. That may change if the service gets more traction among users and therefore increased leverage among publishers.

At $9.95 a month, Oyster is slightly more expensive than Netflix's streaming-only option. That is a better value proposition in the sense that you need only rent one ebook a month to at least break even, whereas you would need to watch multiple movies or show seasons a month on Netflix to come out ahead of typical rental prices in bricks-and-mortar video shops. Unfortunately, a Pew survey from last year found that just 27% of Americans read the equivalent of one or more books per month — digital or physical — which suggests the $120/year could be seen as steep price to pay for many.

For better or worse, the success or failure of Oyster may serve as the ultimate litmus test for whether digital devices increase the consumption of books — in the way that they might with movies — or undermine it.

"You see all the times someone says I'm really enjoying Breaking Bad, it's on Netflix, you have no excuse not to go at least give it a shot. We feel that same way with books," Stromberg says. With an access model, he says, "You spend less time thinking about making a purchase, less time thinking about whether you should read this book and really just start reading it. That's ultimately the way you'll be able to tell you like it."

Image: Oyster