Netflix for Books? Riiiiiight.

So, the latest-and-greatest panic rumor is that Amazon is going to create a “Netflix for books,” where any Amazon Prime member can download (presumably) any ebook they want for nothing more than the cost of their Prime membership.

People on the net–particularly paranoid authors and lugubrious tech writers–have been speculating about something like this for a while now, and now, according to an article in Wired, Amazon’s actually putting out feelers to see if they can make it work.

Authors, needless to say, are in a lather, because they see the potential that a) their miniscule royalty share from publishers decreasing as more people effectively use the Amazon equivalent of a library instead of paying for books, and b) Amazon might use the sea change as an opportunity to give their e-publishers a big royalty cut (which has been the paranoid topic du jour ever since they bumped it from 35 to 70 percent).

Me? I think it’s bullshit, for several reasons:

First: This is a bit of a “duh” issue, but Amazon can’t actually offer any books that publishers (including indies) give them permission to, excepting books in the public domain. Do you think it’s terribly likely that publishers, many of whom are in the midst of trying to negotiate a HUGE industry-wide business model shift, are going to take kindly to the notion of licensing content on a basket basis for a low price?

Second: If Amazon did the Netflix for books thing, the big loser will be the bestsellers. I would be quite surprised if their contracts had proactively authorized the publishers to sublicense their work in this fashion (very few of the midlist contracts I’ve seen can be read this way, even by a highly motivated lawyer). So, if the publishers did jump at this, they’d be awash in lawsuits from the very authors that generate the bulk of their money.

Third: So let’s say Amazon can’t make their Netflix-for-books idea work without coopting their stable of Indies. They ammend the distibution agreement to give them the right to put books in the Prime store without further consent. If they did this, and then deployed it aggressively, the advantage of listing with Amazon pretty much evaporates for most of us–and all we have to do is take our books down, except perhaps for those we want to use as loss-leaders. There are a lot of other retailers, and the ones we do leave up can link to sites where our books can be purchased. At that point, the situation is the same as putting up the first book in a series for free and then including affiliate links at the end. And Amazon loses, because the purchasing business shifts to other sites. Which brings me to…

Fourth: Amazon is a retailer. Short term, they might seriously boost sales of the Kindle. Long term, though, they’ll make less money with subscription models if they managed to shift the bulk of their customer base over to them. From their point of view, this is about creating a stable baseline yearly income in the form of subscriptions. However, the people most likely to sign up for Prime are those who buy a LOT at Amazon–these are exactly the people who, if given the “free books with membership” option, are going to not buy as many books, and the bottom line at Amazon will hurt because of it. Amazon’s most optimal strategy will be to offer SOME books through Prime (for example, first books in a series) while keeping the bulk of their likely-to-sell-dependably stock in the normal retail store only.

Fifth: Despite what you’re hearing from some other writers who are currently really worked up about this, there are not only six publishing houses. There are over 1900, not including upstart collective labels that publish a bunch of indies. Amazon can not effectively make every, or even most, books available this way even if they wanted to. And the biggest labels are already very worried about Amazon’s current dominance of the retail space.

Verdict:
If Amazon pursues this model, it’ll be in a limited fashion. It might include magazines, first novels-in-series, public domain works, and the occasional book that an author or publisher is willing to license out specifically for the Prime distribution model. But it ain’t gonna include everything–nowhere near. And it’s not going to put us all out of business, or reduce the profession to ashes dominated only by hobbyists.

Katherine Hepburn used to say “Life is a banquet and most poor bastards are starving to death.” That’s the situation authors are in right now. We’re in the most amazing era (from an author’s POV) since the pulp era, and the fundamental economic drivers pushing it are creating FAR more (not less) opportunity for writers to make good livings. And yet, writers across the net are kvetching about falling advances, reduction of opportunity, and paranoid ideations of their profession evaporating.

But this is a business, and businesses change. You can’t stop change by complaining about it, you can only learn to roll with it. And when the changes are breaking ninety percent in your favor, the proper reaction is to seize the moment, not to sit around bemoaning the fact that things change.

In other words, relax. The doomsayer scenario isn’t going to happen. You can go back to writing now.

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4 Comments

  1. As an indie creator, I’m far from “in a lather” about the possibility of Amazon folding a lending system into their Amazon Prime program.

    I don’t have the numbers, but I’m guessing that there’s not a whole lot of overlap between folks who mostly buy Kindle e-books and people who subscribe to Prime (why pay an annual fee for free shipping when most of your commerce is electronic?)

    So: if I can get a piece of the Amazon Prime customer pie on top of my monthly Kindle royalties, fantastic. It’s another stream of income for my content.

    • Very good point — now I’m kicking myself that I didn’t think of that and point it out in the post. Thanks much for chiming in!

  2. There is another thing to consider, and that is more exposure for your content. It is not just about web searches either, but about allowing readers to find books that they might find interesting. Assuming of course, that the online retailer allows a healthy amount of fields when the product is listed. The lending option gives the consumer immediate gratification for folks that may only read the text once or twice, whilst still offering some income for the author.

  3. Pingback: The Week in Writing: 12th–18th September, 2011 » markaeology

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