Kindle Owners’ Lending Library
Amazon has something called the Kindle Owners’ Lending Library.
Basically, Kindle owners who are also members of Amazon Prime can ‘borrow’ one book a month.
There are some interesting nuances –
- There are 300,000 books that are part of the Kindle Owners’ Lending Library.
- All 7 Harry Potter Titles are available.
- Over 100 current and former New York Times bestsellers are available.
If you notice the figures, it’s 100+7 versus 300,000. The first question that comes up is – How many of those 300,000 books are books you’ll actually want to read?
I don’t know the answer to that question. But it’s definitely a lot less than 300,000. Some of the ones that you might want to borrow include –
- The Harry Potter titles.
- The Hunger Games titles.
- Most/Some of the books published by Amazon’s various Publishing imprints.
- Some of the books Amazon got Kindle exclusives for (including some titles from John Lutz and Philip Roth).
- A few big name authors like Michael Lewis and Stephen Covey.
Overall, the number of books you find interesting might run in the few hundred to few thousand range. Of course, you’re limited to one book a month, so those books would last for quite a while if you only read a book a month.
Amazon Kindle Indie Author Exclusives
Amazon has a program called KDP Select. Authors who enroll in this get some benefits and have to give up some things in return –
- Indie Authors who join KDP Select must let their books become part of the Kindle Owners’ Lending Library. There is a KDP Select Global Fund and authors get approximately $2.29 per book borrow.
- Indie Authors get to offer their books for free to Kindle owners for 5 days out of every 90 days. This ‘free marketing’ thing is the big carrot for indie authors desperate to get some awareness among readers.
- Indie Authors have to give Amazon a period of exclusivity. They cannot sell their book via any other ebook store while they are enrolled in KDP Select. No other ebook store includes the authors’ websites and blogs.
The big draw for authors is that they get to give away their books for free for 5 days in every 90 day stretch. This is free marketing. In return they must enroll their books in the Kindle Owners’ Lending Library program. They get $2 or so per borrow, so it’s not all bad.
The really tricky part is the Kindle Store exclusivity.
Are Kindle Owners’ Lending Library and Indie Author Exclusives a good thing for Kindle and Amazon?
At first glance they do seem to be an advantage –
- Amazon gets exclusives for hundreds of thousands of books from Indie Authors and some smaller Publishers and some published Authors.
- Amazon can claim, quite correctly, that it has more books for sale than any other ebook store.
- Amazon can beef up its Kindle Owners’ Lending Library. It certainly sounds impressive to hear ‘Borrow free books from 300,000 titles’. It is only afterwards that readers realize it’s 1 book per month and that only about 0.1% to 1% of those 300,000 books are of any interest to them.
- Amazon can sell more Amazon Prime memberships by dangling the carrot of the Kindle Owners’ Lending Library in front of Kindle owners.
- Amazon has more ‘free books’ thanks to Indie Authors and Smaller Publishers and some Published Authors offering their books for free. This attracts a lot more readers to the Kindle Store.
- Indie Authors generally price their books cheaper. This leads to Kindle Store having lower average prices than other stores. Again, this attracts more readers to the Kindle Store.
- Notice the beauty of this (from Amazon’s perspective) – Amazon is getting authors to give it exclusivity and readers to buy Prime Memberships for something that in a free market would happen naturally.
How could hundreds of thousands of extra titles not be an advantage? How could hundreds of free kindle books every day not be an advantage? How could hundreds of thousands of $1 and $3 and $5 books from indie authors not be an advantage?
Well, perhaps first we should look at what’s happening in the Kindle Store.
Please also see our post on The Relentless Fall of eBook Prices for more details on what the next section covers.
Kindle Store – Kindle Book Prices keep falling
Kindle Store is seeing a massive fall in the prices of the Top 100 Bestselling books.
Kindle Store Top 20 – 11 books below $5 and 4 books below $2 in the Top 20. That’s 55% below $5 and 20% below $2.
Kindle Store Top 40 – 24 books below $5 and 11 books below $2 in the Top 40. That’s 48% below $5 and 27.5% below $2.
Kindle Store Top 100 – 55 books below $5 and 24 books below $2 in the Top 100. That’s 55% below $5 and 24% below $2.
Kindle Store Summary – 1 out of every 2 books in the Top 100 is $5 or less. 1 out of every 4 books in the top 100 is $2 or less.
This is really quite stunning.
55% of the Top 100 books are now $5 or less. 24% are $2 or less. There’s not very much money you can make on books below $5. With books below $2 there’s hardly any money.
Keep in mind that Amazon uses weighted algorithms to try and keep down cheaper books. Cheap books are taking over the Top 100 List despite Amazon’s best efforts.
Amazon is, in effect, causing this Fall in eBook Prices to Happen
- Devaluing books by offering ‘Free Book a Month’ in the Kindle Owners’ Lending Library. If readers can get 300,000 books for free via Amazon Prime, then why pay $10 for a book?
- Devaluing books by letting authors offer their books free 5 days out of every 90. This means that there are hundreds of free kindle books from indie authors and smaller publishers EVERY SINGLE DAY. Why pay?
- Massively handicapping Publishers. Indie Authors get their free promotion days and get more publicity. Indie authors get their Kindle Lending Library exposure and get more awareness. They suddenly are on an almost equal footing with Publishers.
- Until recently, Amazon used to carry over free book downloads into the Paid Charts. You’d see a book that was #1 in the Free List show up as #50 in the Paid List. So, even without any actual sales, free books would seem to have sold well. Amazon also does this with books that are the Kindle Daily Deals. This is unfair to books that are actually selling for full price.
- Amazon is pushing its own books hard. That blurs the line because the difference in polish and quality between indie books and Amazon published books is less than the difference between indie books and the NY Times Bestsellers. Please Note: I mean the ‘average indie book’, not the very good ones.
- Amazon is massively promoting ‘free kindle books’ and ‘cheap prices’. Thus it’s bringing Kindle owners into the store and ecosystem with the ‘free and cheap’ mentality.
- Amazon is massively promoting ‘free’ and ‘cheap’ without considering the consequences. Amazon just wanted to beat Nook and Sony and never realized that it would kill the golden goose of book profits if it created a rush for free kindle books. It wanted to steal the cake and keep it for itself. It’s about to realize – Giving away free slices to every reader means the cake is already gone.
Amazon wanted both benefits –
- To use free kindle books to beat Nook and Sony. To use ‘free loans of books’ to sign people up to Amazon Prime.
- To sell $10 books to Kindle owners and make money.
Now it’s finding out the hard way that it isn’t possible. You can’t destroy a market to conquer it – then expect it to revive itself the instant you’ve consolidated your victory. In life, there are long-term consequences to our actions.
All those people who got lured to Amazon and Kindle by the promise of free and cheap? They want free and cheap forever. And they are going to get it.
Because all those indie authors Amazon invited in to fill up its eShelves and create the largest ebook store – they like free and cheap even more than readers.
Amazon will have to lie in the bed it has unmade
Amazon is fighting the Book Wars on two fronts –
- It is trying to kill and replace Publishers. Witness all the Publishing imprints it is creating. Witness how it keeps promoting smaller Publishers and Indie Authors to try and destroy the ‘awareness and perception’ gap between Big Publishers and everyone else.
- It is trying to kill its competitor devices and stores – iBooks, Nook, Nook Store, Kobo, Sony.
It decided, for some strange reason, that the best way to accomplish this is via cheap ebook prices. The strategy worked. Perhaps better than Amazon hoped.
The only problem is –
- If you destroy the value perception of books to win the Books Market, the prize ends up being not worth winning.
Amazon is winning the Book Wars by effectively driving the value perception of books to $1 and $0.
If it does end up winning and controlling all of Books – It is stuck with $1 and $0.
It can’t just go in and un-train readers and indie authors. Both parties are now wedded to $1 and Free. Neither is going to switch to $9.99.
The $25 Billion a Year Books Market will be $3 Billion a Year with Zero Profits if Amazon Wins
Books in the US are supposed to be a $25 billion a year market. In 2012 eBooks are supposed to have earned $5 billion.
However, that’s what Publishers have created.
Amazon is creating a market where everything is $1 or $0.
The market that Amazon is driving us towards won’t be $25 billion a year. It’ll be $3 to $5 billion a year. Furthermore, there will be zero profits in the market. This might suit Amazon because it hopes to sell those people bananas and faucets and computer cables. Books, for Amazon are just loss leaders.
However, what about authors and editors and Publishers and everyone else who makes a living from books? Well, their entire careers are being burnt down by the spark Amazon has ignited with its free and cheap strategy in ebooks.
Kindle Lending Library and Indie Author Exclusives aren’t an advantage for Amazon. They are just means to accelerate the destruction of the Books Market. Even as Amazon wins the eBook Wars, it is doing everything it can to ensure that the prize is completely worthless.