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Summary:

Oyster, a new startup that wants to be the Spotify of books, announced it has raised $3 million led by Founders Fund. The money will help Oyster build a library that allows members to access an unlimited number of books for a monthly fee.

oyster
photo: oyster

While Amazon launched its own lending library on top of its Amazon Prime service, there’s still an opportunity for other competitors to create a Spotify or Netflix for books. That’s the hope of New York City-based Oyster, a new startup which announced today it has raised $3 million led by Peter Thiel’s Founders Fund.

The company is preparing a mobile app that will allow users to get unlimited access to a library of books for one monthly price. The app will combine discovery with access and reading, so users will be able to get recommendations and immediately begin reading. The app was designed from the ground up to optimize the reading experience on mobile devices.

The app will feature a growing catalog of books, from national best sellers to classics, both fiction and non-fiction.  Oyster is looking at working directly with publishers, not with authors. The app is being tested right now with a small number of users.

In addition to Founders Fund, Oyster’s new funding comes from SV Angel, Chris Dixon, Founder Collective, Shari Redstone’s Advancit Capital, Sam Altman of Loopt.

OysterThe company was founded this past summer by Eric Stromberg, a former business development and product guy at Hunch; Andrew Brown, who worked at Google and Microsoft; and Willem Van Lancker, a former user experience designer for Google Maps. Stromberg told me the idea sprang from his fascination with the transformation of books and what they will ultimately look like in digital form. He said he wants to create a tool for helping people find and read a lot more books than they’re doing today.

“We want to create a product that fits into people’s lives and lets them find books and read all the books they wished they had read,” said Stromberg.

Stromberg said there’s no date for the launch of the app and no price yet. He said he wants to create a social environment that lets people recommend books to each other, similar to how Spotify users can share their tastes with others. And Oyster will also work in the background to learn from a user’s tastes and habits to suggest other books. Stromberg will be relying on his experience at Hunch, which provided personalization and recommendation services to companies.

For publishers, Stromberg said Oyster gives them another way to generate revenue and get their content in front of users. He said Amazon’s Kindle best seller list drives a lot of sales for publishers but it prevents other works from being discovered. Amazon’s lending library also plays in this market but it’s limited to Amazon Prime customers and only allows for one book to be borrowed a month.

There are still a lot of questions about Oyster and whether it can compete against Amazon and other competitors. A lot will come down to its book selection and how Oyster’s talks go with publishers. Stromberg said Oyster will try to focus on quality over quantity. With the success of access-related media providers like Spotify and Netflix, this might be a chance for publishers to test out a paid library model and also lessen their reliance on Amazon.

  1. My wife is an avid reader and book club member, and says she’d subscribe but only if the service had the latest books available. Just like Spotify then. I wonder what the publishers will make of that? Other lessons from Spotify: build the catalogue as quickly as possible, prioritise interactivity and personalisation to drive loyalty, and open the platform to app developers.

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  2. Quality over Quantity?
    Sounds like Oyster is planning to be one more gatekeeper for readers, deciding what constitutes “quality” rather than allowing for a variety of choices where readers decide.
    So far I’m not impressed with Oyster’s business model.

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    1. This looks more like a play to be purchased by B&N or Amazon and become another value add service to one of those companies.

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    2. If they want to truly create a library create it.

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  3. Hmmmm. Differentiation keys from say Goodreads or any other sites?

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  4. stairwellspirit Thursday, October 11, 2012

    Oyster might be useful if it improves not only on the Amazon Prime model but on the public library ebook lending system (which is similar to physical book lending in that only one person can check out a book at a time).

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  5. Anyone heard of 24symbols? google it, they’ve been doing this same thing for a while, and they actually have tangible apps and web

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  6. If you’re from London Oyster will sound wrong as a name

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    1. Katja Splichal Tuesday, October 16, 2012

      true

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  7. Katja Splichal Tuesday, October 16, 2012

    3M for a native app? congrats, sweet funding.

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  8. Why are they only planning to deal with publishers? Are they not aware that many signs point to self-publishing as the future? If they don’t want to deal with self-published authors, a lot of people will miss out on a lot of great books. Contrary to (sadly) still-popular belief, “self-published” does not necessarily mean “crappy”.

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