Simon Dunlop

Oyster was a great purist reading experience for its customers but it was a deeply flawed both as a product and a business model. Being US-East Coast-centric, it was taking on Amazon’s more sophisticated readers who expect the widest possible selection of books just a click away...

Although some have hailed Oyster's decision to launch an ebook store allowing users to purchase titles à-la-carte, there is reason to meet this decision with some skepticism. Previously a subscription-only service, similar to Bookmate and Scribd, Oyster has launched its new ebook store in conjunction with new deal announcements with Penguin Random House and Hachette, publishers that have famously resisted making their titles made available through subscription services. With this latest move, Oyster has effectively blinked first -- bowing to the pressures of major publishers -- arguably weakening the position of ebook subscription services.

The latest EU ruling which excludes ebooks from reduced VAT rates follows a long battle between the European Commission and two EU member states: France and Luxembourg. As it stands, paper books continue to qualify for reduced tax rates while their electronic counterparts are now subject to full VAT. This price increase for ebooks isn't just a blow to ebook publishers but a blow to the publishing industry as a whole.

Simon Dunlop, founder and CEO of ebook subscription service Bookmate and co-founder of emerging markets music streaming service Zvooq, discusses how changing consumer behavior calls for a different approach to ebook pricing.

Spotify outstripping iTunes in relation to royalty fees paid to musicians in Europe is a strong validation of the subscription and streaming model and an indication that consumers are turning away from digital downloads. The explosive growth of Spotify is an example of what happens when an industry gets behind a new technology and business model.