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Amazon: Early Data Shows Kindle Owners’ Lending Library Increases Sales

Amazon’s early data from the Kindle Owners’ Lending Library, which allows Amazon (NSDQ: AMZN) prime members who are also Kindle owners to borrow one free e-book per month, “suggests the possibility of an increase in customer purchasing,” Kindle content VP Russ Grandinetti said at Digital Book World today.

Grandinetti said “we’re trying to be skeptical about this” but Amazon’s early data “suggests you can get people engaged in a book that they weren’t interested in otherwise.” Amazon compared two customer groups of Amazon Prime members who have owned an e-reading device for more than six months and have made at least one recent book purchase in the last 30 days. The members of one group used the Kindle Owners’ Lending Library and the members of the other group did not. Grandinetti said that after after the average customer’s first borrow from the KOLL, he or she went on to purchase 30 percent more books.

“Many publishers in this room give away books for free every day in a very coarse effort to increase demand,” Grandinetti said. He argued that the Kindle Owners’ Lending Library is a more refined approach backed by a lot of promotion on the Amazon website. “Some customers may be willing to try authors and series they might not otherwise have discovered,” he said. He gave an example, the very popular Hunger Games trilogy by Suzanne Collins. Nineteen percent of customers who borrowed The Hunger Games from the KOLL later purchased one of the other books in the trilogy instead of waiting another thirty days to borrow it.

The Hunger Games books appear to be among those included in the Kindle Owners’ Lending Library without explicit publisher permission. Instead, Amazon is paying the publisher the wholesale price for the book each time a customer borrows it. This is different from KDP Select, which allows self-published authors to include their books in the KIndle Owner’s Lending Library if they agree to sell them exclusively through Amazon. (Some KDP Select authors have found that this exclusivity pays, while others are skeptical.)

Amazon clearly hopes to convince traditional publishers that it is worth their while to agree to include their e-books in the KOLL, as well as to decrease skepticism about the program. It was unclear if publishers were convinced. Later in the day, Publishers Marketplace’s Michael Cader asked publishers if it’s true that the Kindle Owners Lending Library increases sales. “Are you just netting more revenue because you’re getting paid by Amazon for the read?” he said, referring to the cases in which Amazon pays the wholesale price each time the book is borrowed, rather than coming to any other kind of agreement with the publisher.

Bloomsbury’s Evan Schnittman pointed out that Bloomsbury runs similar promotions already. For an upcoming children’s series, for example, Bloomsbury released three free prequels leading up to the launch of the first book in the series. He pointed out that Grandinetti’s Hunger Games example was also about a series and it was unclear how giveaways affect paid sales of single books, especially if the author in question has not published any other titles that might enjoy a resulting sales bump. Also, as Cader noted, when publishers run the giveaways themselves they can control the timing and the length of the promotions.

Grandinetti stressed the data is “early.” “I don’t want anyone to think we’re definitive on this,” he said, “but this is the actual data on this and we’re doing our best to really map this out.”

The Digital Book World conference took place in New York this week. See all our Digital Book World coverage here.

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