Here's a news video about Oyster:
I thought about a subscription model for books a few years ago, but I knew it would take a big publisher to come on board for it to be successful. HarperCollins, which had aquired the Eos line of science fiction books and renamed it Harper Voyager, will be the key to Oyster's success because it provides quality books. Smashwords, a distributer of indie books, on the other hand, provides the volume of books that Oyster needs to justify its subscription price and attract customers. I couldn't find information detailing the pay model for publishers and ultimately authors, so I'm not going to get into that discussion, but I assume it's by the number of views.
Here's how I think Oyster has great potential:
Authors can attract fans who otherwise would not have bought their book. Readers can recommend books within the Oyster community, and the recipient party doesn't have to risk paying extra for a book he or she may not like. Plus, one can explore subjects they would not have otherwise read. The subscription model also encourages more reading, because you'd want to get the most out of your subscription payment by reading as much as you can.
On the flip side, you can't keep the books. It's like a library. You can read all you want but have no sense of ownership. And speaking of libraries, many already participate in free ebook lending via OverDrive. Also, since not all the major book publishers have partnered with Oyster, there may be plenty of books you want to read but are not on Oyster, and therefore, you still have to buy them elsewhere. Finally, if you don't already spend about $120 on ebooks a year, it's probably not worth it.
Personally, I'm going to wait until science fiction books by Tor, Del Ray, and Baen are added to the service before I consider coming on board. But it seems that the service is great and will have a solid future.
What are your thoughts on the subscription model for books?