“It’s hard to tell authors that it’s worth starting a new relationship with any of these new services,” said Ted Weinstein, an agent in San Francisco. “It is literally an unsustainable business model.”
Here is how Scribd and Oyster work: Readers pay about $10 a month for a library of about 100,000 books from traditional presses. They can read as many books as they want.
“We love big readers,” said Eric Stromberg, Oyster’s chief executive. But Oyster, whose management includes two ex-Google engineers, cannot afford too many of them. This could be called the Sizzler problem. In the 1990s, the steak restaurant chain tried to beef up sales with an all-you-can-eat salad bar, which got bigger as it got more popular. But as more hungry customers came, the chain was forced to lower quality, which caused customers to flee, which resulted in bankruptcy.
“Sure, if you had a buffet and everyone ate everything, it wouldn’t be a profitable business,” said Mr. Adler of Scribd. “But generally people only eat so much.” Only 2 percent of Scribd’s subscribers read more than 10 books a month, he said. These start-ups are being forced to define something that only academic theoreticians and high school English teachers used to wonder about: How much reading does it take to read a book? Because that is when the publisher, and the writer, get paid.
The companies declined to outline their business model, but publishers said Scribd and Oyster offered slightly different deals. On Oyster, once a person reads more than 10 percent of the book, it is officially considered “read.” Oyster then has to pay the publisher a standard wholesale fee. With Scribd, it is more complicated. If the reader reads more than 10 percent but less than 50 percent, it counts for a tenth of a sale. Above 50 percent, it is a full sale.
Both services say the response has been enthusiastic, but neither provided precise numbers. Looming over these start-ups is Amazon, which has already dabbled in the subscription area. Kindle owners who are members of Amazon’s $79 annual Prime shipping service are eligible to borrow from a library of 350,000 titles. The program has had limited impact because users can borrow only one book at a time, and it offers few best-sellers.Partially Read
