updated 11:15 pm EDT, Sun September 11, 2011
Amazon may try Netflix model with e-books
Amazon is actively exploring the idea of bringing a subscription model to Kindle books, sources claimed late Sunday. As discussed with publishers so far, it would parallel the strategy taken with Instant Video, where Amazon Prime customers paying the $79 per year get the media subscription as a bonus. Titles would primarily be "older," the WSJ understood, with a limited number of free titles every month.
The reception of the proposal isn't evident. It's unknown whether any publishers are already onboard. Some publishers' leaders are reportedly hesitant in the same way movie and TV studios have been backing away from Netflix. They worry that the flat rate would devalue the books and put them at odds with more conventional sellers, though this could include Apple's iBookstore and Barnes & Noble's Nook store, not just physical retailers.
Talk of the plans come just before the Android-based Kindle tablet and show Amazon hoping to return to its strategy of using low prices, if not selling at a loss, to build market share of the early Kindle hardware. Amazon had tried this with the Kindle Store at first, in many cases selling books below cost. Apple's arrival ended this as successful Apple pressure led to publishers demanding an agency model, which while keeping prices higher also prevented Amazon from setting prices that it couldn't necessarily sustain in the long term.
Subscription e-books are rare, in part because of the frequency of reading. While music and videos are easily and often consumed, relatively few are active enough readers to justify paying a subscription. Public domain books are also more of a factor, as some looking for older titles may skew towards free classics rather than younger but no longer current titles.