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Amazon tests ebook subscription service

Amazon 'testing e-book/audio subscription service'

16 July 2014

The Financial Times - by Robert Cookson, Digital Media Correspondent

Amazon has started testing an ebook rental service called “Kindle Unlimited”, which would give subscribers access to more than 600,000 titles on any device for $9.99 a month.

 The online retailer, the world’s largest bookseller, plans to take the model that Spotify pioneered in music and Netflix did for online movies and TV shows and apply it to ebooks.

 Amazon uploaded test pages for the service to its US website on Wednesday but quickly pulled them down without explanation. The company did not respond to a request for comment.

 Kindle Unlimited did not have titles from the big five publishers – Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster – according to GigaOM, a news website that looked at the test pages while they were still active.

 Amazon’s push into a subscription model would be highly significant for the book industry, which is reeling from the decline in sales through bricks-and-mortar stores and the shift towards ebooks.

 It also comes as Amazon battles with Hachette over ebook pricing. That dispute has seen Amazon charge more for Hachette books, take longer to ship them and remove pre-order buttons from some forthcoming titles.

 However, many in the industry are sceptical about whether a subscription model will work for books, especially for services that lack the backing of the world’s top publishers.

 Richard Mollet, chief executive of the Publishers Association, a trade body, said: “It’s been a question around the industry for about three or four years: when is book publishing going to have its Spotify moment?”

 But he added that it was far from clear that the publishing industry needed a rental option because books can take days or weeks to read and sell to a far smaller audience than popular music tracks.

 Dozens of ebook subscription services already exist, such as Scribd and Oyster, but most remain niche propositions and the biggest publishers have been reluctant to sign up.

 Amazon itself made a limited foray into ebook subscriptions in 2012 with the launch of Kindle Freetime Unlimited, a selection of apps, videos and ebooks for children. That service is available only on Kindle hardware, and costs upwards of $2.99 a month.

 Publishers are worried that subscription models would shift many of their most voracious book buyers on to library-style platforms, hurting sales. Amazon has offered publishers the option to sign a new licensing agreement for Kindle Unlimited. But according to two publishers who asked not to be identified, Amazon is also including some books in its new service under existing licensing agreements for its Kindle Owners Lending Library, which allows people who have an Amazon Prime subscription and own a Kindle to borrow one book a month.

Additional reporting by Henry Mance

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