[LINK] Kindle book lending (Amazon)

Tom Koltai tomk at unwired.com.au
Fri Nov 4 07:30:44 AEDT 2011

Not a good time to think about opening a dead tree bookshop.

Amazon's latest Prime gambit: Kindle book lending
By Larry Dignan | November 3, 2011, 2:28am PDT

Summary: The Kindle lending program may just be one part of the kitchen
sink Amazon plans to toss into its Prime subscription service.

Amazon keeps throwing the perks at its Amazon Prime subscription
service. This go-round Amazon is adding a Kindle Owners' Lending Library
to the mix just ahead of the Kindle Fire launch.

For the e-commerce giant, Prime subscriptions appear to be just about
everything. Aside from free two-day shipping, Amazon has added unlimited
streaming of shows and movies and now Kindle books. Why? Repeat after
me: Lifetime value of the customer. Also see: Amazon's Kindle Fire
economics: A focus on lifetime value of customer

Amazon hit that point on its most recent earnings call as analysts were
freaking out over what a $199 Kindle Fire will do to margins. The
company explained that it'll take a margin hit now for more revenue
later. Kindle Fire has an Amazon Prime subscription bundled in for a
month. If the bulk of those Fire buyers also become Prime subscribers,
Amazon garners a nice recurring revenue stream-a subscription is $79 a
year-and the promise of more loyal customers.

In other words, the Kindle lending program may just be one part of the
kitchen sink Amazon plans to toss into Prime.

The Kindle lending library includes more than 100 current and former New
York Times bestsellers. It's a handy library. Amazon bought access from
publishers for a fixed fee and will also buy a title at wholesale terms.
The aim of Amazon's purchase move is "to demonstrate to publishers the
incremental growth and revenue opportunity that this new service
presents." In other words, Amazon is offering a trial so folks buy more

Amazon has its template, but the goal is clear: Get as many Amazon Prime
subscribers as possible even if there's a margin hit at first.

Goodness gracious me, I am actually on topic for once.


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