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[9 comments]

Amazon launches e-book subscription service

July 18, 2014

Can an online subscription plan work for e-books as it does for streaming movies and television shows? That question may be answered soon with the debut of "Kindle Unlimited" from Amazon.com.

The new service, which works across platforms, provides subscribers access to over 600,000 e-book titles and 2,000 audiobooks for $9.99 a month. Those interested can take advantage of a free 30-day trial of the service before joining. Amazon is also offering a complimentary three-month Audible membership to those who join Kindle Unlimited.

[Image: Kindle Unlimited]

Amazon had been rumored to be pursuing a subscription model for some time now. The field for e- and audiobooks remains relatively open with a small number of players, including Oyster (500,000 titles @ $9.95 a month) and Scribd (400,000 titles for $8.99 a month) offering subscription plans at the moment.

FINANCIALS:     [NASDAQ:AMZN] [ ]

Discussion Questions:

Will Amazon's e-book subscription service change the way Americans read books? What do you see as the biggest challenges facing Amazon's Kindle Unlimited plan?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How likely will Kindle Unlimited be to succeed?

Comments:

E-book subscriptions come with pros and cons for consumers. Pros: A fixed price to rent books that is cheaper than buying one book per month. A fairly wide selection. The inclusion of a limited number of audio books. Cons: The price per book increases dramatically if a consumer does not finish at least one book per month. The selection is not as broad as books for sale. There are a very limited number of audio books.

If you are an avid reader who reads at least one book per month, and if the subscription services carry the genres and authors you like, this new Amazon service could be a fit.

This is all part of the shared economy. Why own when you can have instant access and rent for a much lower price than ownership?

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Max Goldberg, President, Max Goldberg & Associates

Kindle Unlimited will likely be incredibly attractive to those who read more than one book a month, as that would be the perceived value tipping point of a subscription priced at $8.99. The question becomes, how large is that market? Other media consumption subscription models are doing well (Pandora, Netflix, etc.) making Kindle Unlimited a good bet for Amazon.

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Jeff Hall, President, Second To None

Let's face it: consumers don't "do the math"—they are willing to overpay simply for the "option value" to read books (or consume other forms of content) as they wish. This is greatly preferable to a "pay as you go" model, even if they end up overpaying on a per-book basis. That option value (and the associated prospect of an "all you can eat" plan) is worth a lot to consumers.

In other words, Amazon will do very well with this new model, and so will consumers.

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Peter Fader, Professor of Marketing, The Wharton School of the Univ. of Pennsylvania

Amazon's Kindle Unlimited will give readers the freedom to check out new titles or authors immediately and without having to commit to a traditional book purchase. Although other e-book services exist, Amazon's reach and scale mainstreams the service. Not all book categories are in play yet, and a quick review of my own Amazon wish list revealed zero Kindle Unlimited books. So the impact will be spotty based on your own book library, despite the natural demand that exists for such a service.

Biggest challenge to Kindle Unlimited is on the supply side of the equation. Authors are the content creators and everywhere we read about how content trumps all, but I'm not so sure what payoff these authors will collect for their work. The other supply node is the publishing houses whose powers are unevenly but ultimately eroding with the digitization of everything. They serve as gate keepers of a slowly vanishing print paradigm.

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

That subscription model has worked well for Netflix and for Amazon Prime. Expanding the idea to books is likely to be very attractive to those who download a lot of books. Success will depend upon how reasonable the price is, what attractive titles are included, which publishers will sign up and whether consumers perceive a value.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Amazon is no longer a website to buy "stuff." It has become part of our lifestyle. We download music, books, etc. Anything they do to enhance "using" Amazon versus just "buying" from Amazon creates a better connection with the customer.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

There's just no end in sight to the subscription model. Advanced analytics are going to make it possible for retailers to offer personally-recommended subscriptions for school supplies, apparel, food and lots more. Amazon will lead the way, but a lot more will follow.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Renting a library of a half million titles (initially) doesn't seem all that big a stretch. Once we started moving from physical books to e-books a lot of the values of ownership melted away—you don't worry about the quality of the bindings, or who to leave your books to, or even whether they get reissued. The pages don't dog-ear or fall apart.

You break a lifetime of ownership habits: pride in the stretch of shelves, showing off your erudition. Browsing your own books to re-read. All sorts of habits, eroded by e-books. I read. A Lot. I come from a publishing family and have been an author (poorly) and am related to others (much better).

In the end, it is just another answer to the question—what is there to read?

John Rand, Senior Vice President, Kantar Retail

It will definitely have a favorable impact on particular segments of users, especially those that read a great deal of e-books provided Amazon offers the relevant titles.

It could also result in the growth of a newer segment of users and result in the growth of the pie.

My view; it will impact both sides of the bell curve of e-book readers in a positive way.

Mihir Kittur, Co-founder and Chief Innovation Officer, Ugam

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