Amazon Goes Netflix on Books

by Rich on September 12, 2011

It looks like Amazon plans to launch a Netflix-like service for books.  Nobody has details about it yet, but it could shake up all of publishing.

The effect on indies is likely to be pretty complicated, with some significant benefits and some potentially serious hardships.

Will indie publishers be able to participate? Amazon appears to be working out expensive deals with large publishers to include their books in the program. Complicated and expensive deals don’t work on a small scale, so Amazon will need a simple one-size approach for indie. That may not be easy to define (or easy to define favorably) depending on Amazon’s revenue expectations.

If they can participate, indie publishers gain a significant benefit: No incremental cost to readers to try out their books. Your entire book becomes a sample, and the discovery-risk new readers face approaches zero. They risk their reading time, which they can stop giving bad books whenever they want. Potential for discovery and new readers goes way up.

Revenue and royalties, though, could get complicated. Sell a copy, receive royalties on a copy is a simple model. Sell a subscription and receive a portion of the monthly fee is much harder to do. This is where the one-size deal Amazon would have to offer indie pub is difficult. Big publishers need Amazon because Amazon sells so many books, but to launch a new service, Amazon needs big publishers more than indie. Traditional publishers will have a lot more negotiating weight at the start of this arrangement, and there’s no trade group to represent all of the independent authors at the table.

Without details, nobody can say how good or bad the service will be financially for indies. The thing to watch at this stage is who Amazon considers important stakeholders. The subscription pie will get divided. How big a slice Amazon gives indies will show how important Amazon thinks indie publishers are.

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