Readersforum's Blog

November 4, 2011

Amazon Launches Lending Library Without the Big Six

By Calvin Reid with additional reporting from Rachel Deahl

As rumored for months, Amazon is getting into the digital book lending business, announcing the launch of Kindle Owners Lending Library for Amazon Prime members. Amazon Prime members—who pay $79 a year for free shipping on products and streaming movies—can now borrow one book a month for free. But there’s a hitch: none of the big six publishers, all of which use the agency model to sell their titles, are participating in the program.

Nonetheless, the model isn’t quite the all-you-can-eat lending subscription service many observers had rumored. Amazon Prime members can only borrow one book at a time, even though the service claims to have “no due dates” for finishing the book. While Amazon touts that the service offers “thousands” of books to borrow and at least “100 New York Times bestsellers,” none of the titles in the program are from the largest trade publishers–Random House, Simon & Schuster, HarperCollins, Macmillan, Penguin and Hachette. The program features titles from a variety of mid-size houses that continue to sell their books using the wholesale model, including W.W. Norton, Scholastic, and titles by well-known self-published authors such as Seth Godin.
Publishers using the agency model have complete control over the pricing of their books and, as some have noted, the model does not allow for the price to be changed or discounted. With the wholesale model, publishers cannot dictate final retail pricing. Amazon’s statement in launching the lending program said it is either paying a flat fee to publishers to feature its titles, or paying the standard wholesale discount for each book that is borrowed.
Nevertheless, PW has learned that some non-agency houses have declined to be a part of the lending program. One mid-size publisher that sells wholesale said the “fee” Amazon mentions is a “lump sum” payment that the publisher must allocate to its authors. The fee is said to be determined by Amazon by looking at the 12-month sales history of the titles in question. And according to our sources, some agents are starting to complain about the payment plan.
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