Kindle Book Subscription Model seems inevitable

We’ve now seen two moves in quick succession by Amazon that bring us ever closer to a Kindle Book subscription model.,

  1. It added the Kindle Owners Library to the Amazon Prime Program. That’s already 25% of the work towards creating a proper Kindle Book subscription model. The $79 you pay a year for Prime gets you 1 free book loan a month.
  2. It just allowed any Author/Publisher to offer books free for up to 5 days in every 3 month period. That’s hundreds of free books a day for Kindle owners to choose from. When you consider the jump in sales rank and awareness this creates – it’s hard not to think that more and more authors will start offering free books in return for the marketing opportunity and the sales rank jumps. Of course, Amazon gets 90 day exclusives as a bonus.

It’s far closer to a subscription model than you would think at first. The first hints of ‘more books than you pay for’, ‘read as much as you like’, and ‘huge range of books’ are already there. Everyone’s on the slippery slope now. Even Amazon can’t stop what’s coming – It is, however, very well placed to take advantage of it. The things that are missing will gradually and automatically be filled in.

  1. More participation from the Big 6 Publishers. This will increase as Amazon gets more and more of a stranglehold over ebooks. Right now Publishers probably are thanking the Heavens that B&N invested in Nook and Nook Tablet. However, sooner or later, they will have to make a tough decision and either forsake Amazon completely or embrace its view of ebooks as Gold Stars that lure customers into Amazon.com’s virtual aisles.
  2. Anytime loans instead of the limit of 1 book a month. This shouldn’t be too difficult – as Amazon gets more power, and as authors become more desperate, we’ll see a lot more of this. We’re talking about authors who are already fighting to get people to pay them nothing for their books. Amazon is just supplying the little psychological magic (the $500K that gets split amongst a mere 5 million indie authors). Authors feel it’s less hopeless than it really is.
  3. Enough money (or a large enough lottery prize) for authors so that they are OK with offering their books for free. As soon as Amazon can figure out just how much money free book offers generate, in terms of other products bought at Amazon, it’ll start increasing the $500K a month bounty. It’ll still work out to nothing for 99% of authors. However, the lottery mentality means that every author secretly hopes she can get 10% of that monthly bounty (plus sales from the periods when her books aren’t free). More and more authors will jump in – as the prize gets bigger and bigger, authors will find it easier and easier to ignore the millions of other indie authors jumping in.
  4. In the UK there have been a flurry of complaints over the last few years about how supermarkets and retail store chains use book bestsellers as loss leaders. Selling them for 4 pounds and 5 pounds and driving bookstores to their death. Grocery Stores in the US have been using bestsellers as loss leaders too. Amazon is doing exactly the same – except it’s replacing $4 with $1 and $0. It’s ebooks so Amazon can give them away – it just has to offer enough of a carrot to authors or create a good enough lottery. A Kindle Book subscription model would be the ultimate lure to draw readers into Amazon.com – especially if Amazon can make it a Kindle exclusive. Amazon will 100% push for lifetime exclusives – it’s already tried with Amanda Hocking and probably with other authors. The End Goal is obvious – Kindle books as the irresistible loss leaders that pull people in to Amazon.com.
  5. Enough books published by Amazon imprints to provide a significant part of the subscription value (even if it’s 10% of the books people hear about, it’s still significant).
  6. Enough distillation of indie authors and smaller publishers to make the subscription model more compelling. Do note that the quality does exist – as soon as the curation problem is solved (if it is, and it probably will be), Amazon gets all the good indie authors who are, strangely enough, willing to offer up their books for nothing. All for the promise of recognition and other things that fill hearts and not stomachs.

Amazon thinks it’s game over. Don’t know if it is but Amazon is certainly behaving as if it’s game over – there’s no other reason to show its hand so early. Everything leads to a Kindle Book Subscription Model that is not only very compelling for the amount of reading it offers readers, it’s also exclusive to Amazon.

This is the inflection point. The fact that Amazon has set up and kicked off a model where not only are authors falling over each other to offer their books free to Kindle owners, they are also giving Amazon 90 day exclusives. The fact that it’s already started a Subscription Model and turned it into a selling point for Kindle Fire and Amazon Prime. Don’t see any way the Big 6 can get out of this alive. B&N is in deep trouble too – It’s restricted by its need to make money selling books. This is the inflection point of inflection points. It will, in retrospect, make the other inflection points in eReaders and eBooks seem trivial. The Tragedy of the Commons = The Best Lossleaders Ever.

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