Subscribe

Change Text Size

+ + + + +

All-You-Can-Read Kindle eBooks With Amazon Prime?

Will self publishers be left out in the cold?

There was a short piece in the Wall Street Journal today by Jeffery Trachtenberg and Stu Woo reporting that Amazon is in talks with book publishers about launching an all-you-can-read service for a fixed fee. Book publishers are reported to be less than thrilled with the idea.

In a recent post about the future of intellectual property, I wrote about a scheme for directly compensating authors for eBooks based on the number of times they were read. The two have more in common than you might think.

Amazon’s goal is to capture and hold customers so that they do more and more business through the Amazon store. Amazon has never focused on bottom line income, they continue to be valued as and behave like a growth company. They apparently believe that enticing more and more people to join their Amazon Prime program, which includes free second day shipping and a number of other perks for a $79/year membership fee, is the best way to increase their marketshare. And providing Kindle owning Prime members with a number of free eBooks that would otherwise cost them some dollars apiece would be phenomenal perk to offer, especially for those of us who don’t watch TV.

But the interesting part from my point of view is it would establish a system for sharing a pool of money with a pool of rights holders. The WSJ article implies that Amazon would offer publishers a fee for participation, in return for which, the eBooks included in the program would be available for free to Prime members. That’s a very different model than selling one title at a time, it’s more like the licensing fees paid for broadcasting rights to a season of sporting events. Amazon would likely be generous, at least in the early years, and publishers with solid backlists who are struggling to pay their bills may be tempted.

Once established as a specialty program, the question becomes whether there’s a model for Amazon to try to set up a broader subscription program along the old paid lending library framework, where Kindle users might be offered a variety of all-you-can-read packages. Perhaps a casual reader might be tempted for $9.95 a month for a dozen titles and a serious bookworm would be willing to lay out $29.95 a month unlimited reading rights.

Publishers with a stable of bestsellers may not even be tempted to look at the economics, and it’s hardly a safe bet from Amazon’s standpoint either. There’s the risk of shifting people who spend big dollars on books or eBooks every month to a lower cost plan, while infrequent book buyers wouldn’t sign up for a monthly fee to average costs out. Amazon might still benefit on the top line from locking in more shoppers, but the bottom line damage would eventually catch up with them.

From the standpoint of the self publishing author, the greatest danger would be getting locked out of such a system. Amazon might ignore self publishers as not adding any marketing value to such programs, or they might offer independent authors terms based on the average performance of self published books on Amazon, which would prevent anybody from making a living.

If an all-you-can-read program catches on, self publishers could be in real trouble. Unless Amazon bases compensation on the number of times a book is read as I suggested in my earlier blog post,  it won’t make any sense for self publishers to participate in the program in return for some small fee. Unfortunately, Amazon customers who do sign-up, and I believe the majority of voracious readers would, will be very uninclined to purchase individual eBooks outside the program after they are already paying a monthly fee for all they can read. 

New authors with no sales record would either be unable to include their books in the all-you-can-read program or would only be offered a pittance to do so. And without being in the program, they’d never be able to demonstrate strong sales numbers. It’s only the established trades and perhaps a few big name self publishers who could negotiate reasonable terms based on their backlist sales.

As a reader, I’d love to be able to sign up for a program that would save me a lot of money on reading books. As a long time self publisher, I have a hard time seeing how such a program could do anything other than put self publishers out of business, unless the program bases compensation on the number of times a book is read rather than negotiating fixed fees.

I hope Amazon figures this out and ends up basing their program on dividing a pot of money between all participating publishers based on the number of reads, perhaps with some adjustment for the original cover price of the book. The size of the pot could be flexible, maybe a straight percentage split of the money received in subscription fees with some bonus money if Amazon’s goals for customer retention and engagement are met. But if Amazon basically goes over the heads of self publishers and does a deal with the trades, we’re all in trouble.

8 comments to All-You-Can-Read Kindle eBooks With Amazon Prime?

  • Clara

    “…the majority of voracious readers would, will be very uninclined to purchase individual eBooks outside the program after they are already paying a monthly fee for all they can read.”

    I don’t agree. Voracious consumers of films and music (who pay monthly fees to services such as Netflix and Rhapsody) still buy DVDs and CDs, and use other pay services such as Amazon Prime. I think it’s the non-voracious consumer who is more likely to stick to a single service.

    But I agree it could hurt self-publishers, since they won’t get the same level of promotion.

  • Clara,

    I didn’t do any research about how subscription services such as Netflix and Rhapsody affect the buying habits of users though I assume such work has been done. Are you aware of some some published data I can look at or are you basing your comment on a limited sample of friends, etc? It strikes me as highly unlikely that consumers would continue spending constant dollars on DVDs and CDs despite having a subscription. Some would spend something, but I think it’s impossible the subscriptions wouldn’t displace a large percentage of individual purchases simply because most people don’t have enough disposable income or credit to manage that. It’s sounds more like the early days of Kindle when Amazon was claiming it drove paper book sales up – you don’t hear that anymore.

    Morris

  • Uri

    Morris,
    I can’t see Amazon basing compensation on the number of times a book is read as that leaves them subject to open ended liabilty each month, and investors like to have a clear idea what costs will be. Unless Amazon pays so little per book sold (as Spotify and Pandora, etc. do for music)that no stockholders would feel threatened. Either way, authors will lose if this goes through.
    Uri

  • Uri,

    My suggestion is that Amazon divides a fixed pool of money proportioned to the number of reads, so there’s no uncertainty on Amazon’s part. The uncertainty is all on the publishers part, they won’t know how much they are earning ahead of time, but that’s standard in the book business. The pool of money could be an arbitrary amount, or it could be based on subscription revenue.

    For most authors it will amount to very little per book, but the authors who sell a lot of books would have the opportunity to make a lot, and in the meantime, reach a lot of readers. If self published authors are closed out of the system entirely, either by design or by low fixed payments that aren’t proprtional to sales, those authors will never have the opportunity to to break through the noise, like hundreds have done in the last couple years with 99 cent books on Kindle and Nook. Only a few dozen are making really big money, but hundreds are seeing enough sales to see how they can make a living, though it may take a few more titles.

    morris

  • A kindle holds about 3 gigs of memory. What’s to keep a reader from downloading enough to fill it with enough books to last 5 years or more then dropping out of the program? Are they going to have some way of limiting you to a certain number of books at a time or some way to deactivate the reader when you drop the program? Any book without drm would belong to the reader forever, and as time goes on I suspect drm will become more and more unpopular.

  • Stephen,

    That’s an excellent question. I think in the case of the Amazon Prime model, it would be just one among many perks, so people wouldn’t rush to drop out. The newspaper article did suggest that there would be a monthly limit to protect the publisher, but I suppose it would help Amazon as well.

    In the pure subscription model that I imagined, you would need a similar limitation, though it would have to be quite high as some people read several books a day. But I suspect most people still won’tdo the load and quit, for one thing, it’s hard to navigate large numbers of books on the Kindle unless you do something to organize them. For another thing, people are lazy. Even using something like my list sof free Kindle classics:

    http://www.fonerbooks.com/free.htm

    downloading book after book without reading gets old tiresome pretty quickly. At most, I may download ten books before I run out of patience:-)

    Morris

  • Rick H

    I’d envision it working a lot like their new public library lending system. You check out a copy of an ebook for a designated period like 1 week, and it syncs to your Kindle with a built-in time limit after which it’s disabled. You can only have 6 ebooks checked out this way at one time. Amazon might then add some limit on the total number of checkouts per month as well, to keep the publishers happy.

    I suspect it’s no coincidence that this initiative comes right on the heels of Amazon getting their public library lending system up and running. There’s probably a lot of overlap.

  • Rick,

    I was just telling a friend today (she’s a public library trustee) that Amazon had finally launched a library option but that I didn’t know anything about it. Sounds interesting. So the libraries buy a clock of books and patrons are allowed to borrow them from the library’s account?

    Morris

Leave a Reply

 

 

 

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>