Amazon is “in talks” with publishers? We’ve heard that before.

In other news, Google is “in talks” with the music industry. Anyone here buying songs from a music service powered by Google? Yeah. We’re not either.

At any rate, we were asked if we’d seen the recent Wall Street Journal news report that Amazon is currently negotiating a “Netflix-like” subscription service for books. We hadn’t, but now that we have, we’re not going to lose any sleep over it. 

First, we’re hearing that these talks aren’t very far along — this isn’t something that is likely to launch soon, and certainly not alongside Amazon’s impending Kindle tablet. 

The paucity of detail in the WSJ piece — paywall ahead — makes this feel like a coordinated leak, a bargaining tool meant to kickstart a discussion rather than finalize one.

What little we kinda sorta know:

  • The service would likely be tied to Amazon Prime, which currently runs $79 a year.
  • "Older titles."
  • There may be a per-month limit on the number of books a given user could read.
  • Amazon is promising publishers a “substantial” cut of the $79 fee.

Amazon’s pitch is likely this: “We’ll give you a cut of every Amazon Prime membership, even when people don’t ever download a single book under our subscription plan. This way, even assuming some people use our service rather than buying books, you’ll still come out ahead.”

In other words:

"You won’t really be selling books, anymore, you’ll be an add on incentive for one of our services."

Which leads us to this:

It’s unclear how much traction the proposal has, the people said. Several publishing executives said they aren’t enthusiastic about the idea because they believe it could lower the value of books and because it could strain their relationships with other retailers that sell their books, they said.

There’s nothing new or surprising about publishers expressing public skepticism about new and innovative business models — check Lendle’s library for evidence of that — but the skepticism is understandable in this case, because it’s definitely unclear how well a “Netflix-like” model will translate to books.

Why?

Reading isn’t quite like listening to music or watching movies — and our gut tells us that purchasing habits are different, as well. Let’s assume that there are three categories of readers:

  1. People who don’t read
  2. Casual readers
  3. People who read obsessively

Now, let’s assume a model, based on what we know:

"User pays $79 for the ability to read 5 books a month from a limited back-catalogue of titles."

Those in category A don’t read, so they’re simply not interested.

Those in category B probably don’t read enough to get anything out of the service, and what they do read (new, bestsellers) most likely won’t be included anyway.

Those in category C read dozens of books in a month, in which case they’re suddenly paying a subscription fee for a mere five books a month and then a la carte for anything above and beyond those five. Sounds like a great deal.

What does all this mean for Lendle?

It’s hard to say, really. Optimistically, Amazon offering any service that doesn’t directly compete with Lendle is good news. Pessimistically, Amazon could eventually decide that lending isn’t going anywhere — and ditch it altogether in favor of a subscription model.

If we had a say, $79 (or whatever they raise the price to) would involve everything described above, but Amazon would also work to convince publishers that it also buys lending rights — as they exist today — for all titles, even newer titles, when bought a la carte.

Doing so would provide a value-based incentive for customers to continue to buy books alongside the ability to stream them, which would go a long way toward placating an industry that doesn’t want to lose the ability to sell an actual product.

(Frankly, we wish Amazon would put some negotiating muscle behind their existing lending service — which is still half-baked — before they start talking about new services. It’s all very wishy-washy.)