Amazon Plans e-Library for Prime Customers
Amazon.com plans to launch an e-book lending library if it can get book publishers to agree. Copying the Netflix model for movies, Amazon could make a portion of its inventory of nearly 1 million digital titles available to its estimated 5 million Prime subscribers, according to a report by the Wall Street Journal.
Amazon.com Prime is a $79 a year service that entitles members to free 2-day shipping on Amazon merchandise and free access to 5,000 movies and TV shows. E-books would be a welcome bonus.
Book publishers may not be as enthusiastic about the e-library as the folks at Amazon, according to the WSJ report. Several unnamed publishers have said that the e-book library plan could “ultimately lower the value of the books,” despite the fact that publishers would get a “substantial fee” for participating.
Amazon Prime customers would receive free access to a limited selection of e-books . The Prime collection would consist of older titles and subscribers would only be allowed to “check-out” a few titles each month.
The Prime plan is similar to Barnes & Noble’s lending library for its Nook e-books. However, Nook users must purchase an e-book before it can be lent to a friend free of charge. The Nook e-book file automatically expires after a 2-week period and can no longer be opened.
If Amazon’s lending plan is launched with the support of publishers, it would not only increase the value of Prime accounts to potential customers, but could boost the appeal of Amazon’s top-selling e-reader, the Kindle, and add a compelling feature to Amazon’s upcoming value-priced tablet . The $250 7-inch tablet is scheduled to launch this November and the larger 10-inch version in the first half of 2012.
The Netflix effect
Netflix’s DVD-by-mail rental service followed by its streaming plan was largely responsible for the demise of video stores. Who wants to drive to Blockbuster when movies can be delivered to the door, or better yet, streamed on demand?
Amazon’s proposed e-library could pose a similar threat to public libraries. Many libraries across the country have launched online e-book lending services, but publishers have struggled with their own lending policies. Earlier this year, Harper Collins issued a new policy to libraries that required books to be repurchased once they had been lent 26 times.
While publishers and libraries struggle, Amazon continues to capitalize on the digital book revolution. According to analysts at SeekingAlpha, Amazon could own more than half of the U.S. book business across all formats before the end of 2012.
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