Blog

Some thoughts on an Amazon ebook subscription service

This week, Laura over at Gigaom broke the news that Amazon was working on an ebook subscription service for $9.99 a month called Kindle Unlimited.

Having looked at e-book monetization models for the last few years, I wouldn’t be surprised to find Amazon would be considering ebook subscriptions. However, the publishing landscape is a very different one now than just a few years ago when I first analyzed alternatives to traditional ebook retail sell-through, so it’s worth looking at the implications of what a possible Amazon ebook subscription service would be in today’s environment.

First, here’s what we know about the rumored service:

  • The service would have over 600 thousand titles at the start, including audio books.
  • Amazon has been speaking to US publishers for a while, but so far none of the big 5 are on board
  • Some big named titles that are already part of the Kindle lending program may be included (if them being included in promotional material about the service is any indication).

It sounds like a good start, but as I said, things are much different today than just a few years ago. Here are my initial thoughts about a Kindle Unlimited subscription service:

There are no big-5 publishers on board yet, and likely there won’t be.  Amazon has become more and more aggressive in its pricing negotiations, and in the last month the company’s tactics have become big news as they’ve been in a very public battle with Hachette. This battle has become a rallying cry for many in the publishing industry, including many authors, and I really doubt that any big 5 publisher would ever agree to submit to even more Amazon control over the ebook market.

Amazon’s genre rollup over the past few years has been interesting to watch, and I’ve always suspected part of the reason was to eventually accumulate enough titles and authors to give some meat to a subscription service.  Certainly, not having any big-5 publishers in the mix will cause some to say that the service is a hollow offering lacking in big titles, but I think that genre fiction readers in particular – who tend to be voracious in their consumption – would be fine with an offering that includes lots of self-published and Amazon imprint titles.

Which gets to the major point: the big winners with a Kindle Unlimited service is readers, particularly heavy readers. As Netflix and Spotify have shown in both video and music entertainment, consumers love bundle economics, and to this point most consumers haven’t favored (or likely even aware of) any particular all-you-can-eat offering. Sure, industry insiders are well aware of Oyster and Scribd’s offerings, but unfortunately for those companies, the average consumer is not.

Lastly: While Oyster and Scribd are fighting the good fight and have shown themselves to be fairly innovative, their lack of breakout success so far are part of a growing body of evidence that publishing and ebook startups have a really tough road ahead of them in an Amazon-dominated world.  As I discussed with Richard Nash – who has been a part of two failed publishing startups in Small Demons and Byliner – it’s really hard for any publishing startup to succeed, particularly those that rely on consumer mass-market adoption.

So, while Amazon is by no means first and come to market with a fairly incomplete offering, I have a feeling if they do launch Kindle Unlimited it will be fairly successful. However, the discontent with Amazon among authors and publishers could cause the growing anti-Amazon contingent to rally around startups like Oyster in terms of title and promotion support. And while publishing startups have the cards stacked against them, outside of publishers themselves creating something akin to a Hulu for ebooks, backing the Oysters and Scribds of the world in their efforts to create ebook subscription services may be the industry’s best hope of preventing even more consolidation of power by Amazon.