Amazon Enters the Book Subscription Business

On Friday, Amazon rolled out its Kindle Unlimited service, where for a fixed fee of $9.99 a month, readers can read as many books as they want…from a certain subset of the ebooks sold by Amazon.  It also includes a limited number of audio books from Audible.com.  Amazon is offering a one-month free trial, and sweetening the deal by giving all new members three-months of audible membership as well.Here is how the numbers break down:

  • 2,769,500+ ebooks in Amazon
  • 645,790 books in Kindle Unlimited (about 23%)
  • 2,157 audio books (about  .3% of the Kindle Unlimited Books
  • 2,773 books in KU are free (even if the reader isn’t subscribed to Kindle Unlimited)

With this new service, Amazon joins other subscription-based services including Oyster, Scribd., and Entitle. Which service is going to win the book-subscription war? It’s too early to say, but my thought is that when it comes to subscription services it’s all about who has the best content–the books readers WANT to read. So how does Kindle Unlimited stack up?Unfortunately not very well.  But let’s look at where it’s getting it’s 600,000+ titles from.

  • Self-published authors in KDP Select (By far the largest number of titles – by some estimates 500,000)
  • Amazon Imprint Authors (Of course these were going to be here – and prominently featured)
  • Titles from some progressive small presses who opt in their titles (like Open Road)
  • A few titles that Amazon has special arrangements with (like Harry Potter)
  • A few titles that Amazon has put in against the publisher’s wishes (like Hunger Games)

I’ve been reading articles on Kindle Unlimited since it leaked as “coming” mid last week and I’ve seen no reports of any of the big-five participating. I do think subscription services will play an important role in the book reading ecosystem and to me the big winner just might end up being Oyster.  They already have the biggest selection of top titles, and I see Amazon’s entry as actually increasing their offering. Here’s why. Publishers won’t want to give Amazon more rope to hang themselves, so they will keep their titles out of Kindle Unlimited, but the fact that Amazon sees this as a viable way to sell books, it’s going to validate the business model. Oyster doesn’t have too much of a head start (they launched their service in September 2013, and were founded in 2012), but they have the advantage of being “not Amazon.”

As for Amazon and top titles, current contracts with some publishers allows Amazon to put their titles in without consent but they pay a huge premium to do so. In fact, they have to treat every download as if it were a full sale and as there will be many flocking to these A-list titles it will be costly, especially since Amazon is offering the first month for free and those that are getting in on the free month are going to go right for the big names.

My guess is the traditional publishers will bolster Oyster to help defeat Amazon. If they are going to move some titles into the all-you-can-eat buffet they will do so at Oyster (who they think of as just another distribution channel), whereas Amazon is both their best (because they sell so much) and worst (as they already wield too much power) retailer.

That being said…Amazon has a knack for succeeding at whatever it sets its mind to, so if you bet based on track record, you have to think Amazon will, one way or another, win the book subscription war. Also, they have one other advantage the others don’t…they work with the non-tablet kindles (in other words anything not a “Fire”). I don’t know how many of these are on the market but they are in the millions.  In fact when I first signed up for Oyster, my wife’s number one complaint is she had to use the ipad to read Oyster titles…she LOVES her old Kindle with the keyboard.

In any case, it will be interesting to see how this plays out and it proves just how volatile the publishing industry is. We are living the Chinese wish/curse of “living in interesting times.”

As for the “author” end of what Kindle Unlimited means…I’ll be talking about this quite a bit in the near future.  This marks the first time that I have seen Amazon sacrificing self-published authors and giving traditionally published authors preferential treatment, a sign I’m very disappointed to see.  Look for my article on this “two-tier” system on Digital Book World.

For my own part, I’m going to try out Kindle Unlimited both as a reader and as a writer. Some time ago the rights for my short story The Jester (which was previously published in the Unfettered Anthology) reverted and I released the audio book for free on Audible.com. I’ve also added The Jester to the Kindle Unlimited library, so if you do go for the free month subscription, please check it out…and be sure to read (or page) to at least 10% as that is what triggers payment.

coverSo what do you all think about Kindle Unlimited, are you going to give it a try or have no interest in it?  I’d love to hear your impressions in the comments section.

Michael J. Sullivan

Michael J. Sullivan is a speculative fiction writer who has written twenty-five novels and released nine. Eight of his fantasy books (The Riyria Revelations, and The Riyria Chronicles), were published by Hachette Book Group’s Orbit imprint. Hollow World, a science-fiction thriller was released by Tachyon Publications. The first four books of his new series, The First Empire, has sold to Random House’s Del Rey imprint, and the first book is scheduled to be released in the summer of 2016. He can be found on twitter, through his blog www.riyria.com, and on his facebook page and his publisher’s page for the series.

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