Paperspine aims to be a Netflix for books
Founder envisions online rental service for readers

This from the Seattle Post-Intelligencer

By JOHN COOK , P-I REPORTER

Paperspine is trying to do for books what Netflix did for DVDs. In fact, Dustin Hubbard -- the Microsoft Corp. program manager who co-founded the Issaquah startup on a leave of absence this summer -- said he was inspired by the online movie rental company when he came up with the idea.
It happened one night while putting a book into a crowded nightstand. Hubbard, who has spent 10 years at Microsoft, started wondering why he simply couldn't return the book for another, a la Netflix.

The online book rental service was born.

Paperspine launched last week with 150,000 paperback titles and four subscription plans, ranging from $9.95 to $24.95 a month. (Hardbacks are to be introduced later this month.)
Subscribers can check out up to five books at a time. Like Netflix there are no late fees, and members return books in a prepaid envelope. They also can browse by category, say history, romance or science fiction.

But books have some unique challenges when compared with DVDs. For one, the weight and size vary depending upon title, which makes shipping unpredictable and costly.
Furthermore, the number of books that a person can read in a month is limited, while hard-core users of Netflix can buzz through two or three DVDs in a weekend.
Still, Hubbard -- who co-founded Paperspine with two other Microsoft employees (he declined to identify them because they are still employed at the company) -- thinks those hurdles are surmountable.
"Books are expensive," said Hubbard, adding that a person can easily drop $50 at Amazon.com on three paperbacks.
"If you read four or five books a year, the service is not that useful," he says. "But if you read one or two or more books a month the service really pays for itself."

He estimates that customers will receive new books in four to five days. In order to ensure that popular titles are available, Hubbard has joined with a third-party distributor that he declined to identify. Some of the books also will be shipped from Paperspine's offices in Issaquah.
The distribution system is designed to distance Paperspine from its competitors, which include online book rental services BooksFree.com and BookSwim.
Hubbard didn't want to provide many details on the distribution model out of fear that it could be copied.
Hubbard's leave of absence ends in early January, but he is contemplating whether to make it permanent. He's also just starting to kick around the idea of venture financing.
Online rental models have attracted investor interest recently. Most notably in the Seattle area is Bag Borrow or Steal, a luxury handbag and jewelry rental service that scored $15 million in June.

Another Seattle startup that shares a kinship with Paperspine is Shelfari, which is building a social network for book lovers. At this time, Shelfari does not have a formal system by which users can share books with one another.
Hubbard doesn't expect to compete with Shelfari, adding that he sees ways to incorporate user reviews and other community features from the book site onto Paperspine. He also doesn't expect competition from the 800-pound gorilla in the online book market, Amazon.com.
After all, Hubbard said, there is a fundamental difference between retailers and rental companies. "Generally, companies try not to mix those two," he said.