Amazon.com, Inc. (NASDAQ:AMZN) has gotten a lot of negative press recently for its high profile fight with Hachette over the price of the publishing house’s e-books and how much of a cut Amazon gets to keep, but it is pressing ahead with new pricing models nonetheless. Today Amazon officially announced Kindle Unlimited, a previously leaked subscription service that lets customers download as many books as they want for $9.99 a month.
Catalogue of 600,000 books available on Kindle Unlimited
Of course not everything in the Amazon.com, Inc. (NASDAQ:AMZN) catalogue is available in Kindle Unlimited, but Brian Fung at the Washington Post reports that it there are more than 600,000 books and thousands of audio books available at launch. Newer books (or just books whose publishers won’t agree to the new program) aren’t unavailable but as with Netflix, Inc. (NASDAQ:NFLX), the most obvious comparison to the new service, the depth of options will make up for the holes for many readers.
New payment model gives Amazon another way to pressure publishers
For readers this makes choosing books a lot simpler – browsing a few pages or chapters doesn’t cost you anything so there’s nothing to stop you from browsing widely and only reading the books that really catch your attention (comparisons to Netflix, Inc. (NASDAQ:NFLX) binge-watching seem optimistic). But for authors and publishers the subscription model makes payment more complicated. They will have to negotiate with Amazon.com, Inc. (NASDAQ:AMZN) at what point a book is considered to have been purchased, with the knowledge that the line can be moved in future negotiations as yet another way for Amazon to leverage their position.
Right now that might be 20% – 25% of the book (Kindle keeps track of where readers are in all of their books), but if its past tactics are any guide Amazon.com, Inc. (NASDAQ:AMZN) will push for better terms once the service catches on. This model also doesn’t work well for certain types of books: imagine a collection of short stories who sales are driven by one popular author, if readers don’t get around to a few other stories it might not be picked up as a sale.
The one bright spot for publishers is that this could finally give them a way to monetize the older paperbacks that used to float around used bookstores. Now Kindle Unlimited readers can pick them up without an additional cost, and the authors will actually get something out of the deal.