All you can read

People have been asking me for my take on Amazon’s new digital subscription service, Kindle Unlimited:

After months of speculation, Amazon on Friday introduced a digital subscription service that allows subscribers unlimited access to a library of e-books and audiobooks for $10 a month.

The service, Kindle Unlimited, offers a Netflix-style, all-you-can-read approach to more than 600,000 e-books, including blockbuster series like “The Hunger Games” and “Diary of a Wimpy Kid,” nonfiction titles like “Flash Boys” by Michael Lewis, as well as literary fiction and classics.

So far, however, none of the five biggest publishers appear to be making their books available through the service. HarperCollins, Hachette and Simon & Schuster, for example, are not participating, representatives from the three companies confirmed. Penguin Random House and Macmillan declined to comment, but a search on Amazon suggests that they are not making their books available….

In offering the service, Amazon is entering an increasingly crowded marketplace. It will be competing with publishing start-ups offering similar services, like Scribd and Oyster, which charge a comparable subscription fee and have comparable digital libraries.

My initial impression is that this is excellent for serious readers. At $120 per year, and an average price per ebook of around $7, one only has to read 17 books per year to make it worth one’s while. Books are considerably more fungible than the average writer or publisher would like to admit, but at the end of the day, it is the act of reading that the reader enjoys more than the average title he reads. And the sort of people who will benefit most from the subscription model are the sort of readers who will make do with reading the back of a cereal box if nothing else is available.

Casual readers, book collectors, and fans of particular authors aren’t likely to be too fussed about it. The casual readers don’t read enough to spend the money subscribing, collectors don’t want to borrow books (the subscription model is more akin to paying for the loan of a library book than purchasing a book), and fans of particular authors are going to buy the author’s book whether it is available through Kindle Unlimited or not.

How will it effect writers and publishers? It depends. It is horrific for the Big Five publishers and their writers, as their unwillingness to participate indicates. The Big Five’s model depends upon the fungibility of authors within their ecosystem, and is increasingly dysfunctional as yet another channel outside their quasi-monopoly over the bookstores drains more book buyers from that ecosystem. As with the coming in-game retail channel I’ve spoken about for the past year, Kindle Unlimited is just one more way to free additional readers from the traditional publishing channel. Marketing and branding, two things that the Big Five have shown themselves to be remarkably incompetent at, are of increasing importance as the ability to buy shelf space becomes unimportant.

It’s neutral to modestly positive for independent publishers, their writers, and self-publishers. Neutral because they’re essentially already operating in the system via Kindle Select; this month Castalia’s books that are participating in the Select program vary from 5 percent to 30 percent loans as a percentage of their sales. Modestly positive because that drainage from the Big Five ecosystem will be flowing disproportionately to the indies and the selfies to whom that new channel is flowing. The challenge facing them remains exactly the same as before, namely, how to get people to notice they exist. It’s not going to get any easier for them, but unlike the Big Five, it’s not getting any harder either.

The reason the big authorial names are screeching is because they know that their predominance is, at least in part, the result of their favored position in the ecosystem. And, unlike the first step in the digital revolution which was within the traditional ecosystem, this second one will tend to lock them out to the extent they are contractually trapped by their publishers.

I expect the Big Five to eventually offer a competing subscription service, as that would be much easier than a joint bookstore. I also expect it to be clunky, poorly designed, and destined for a more complete failure than Nook. If they’re smart, they’ll simply buy Oyster and rebrand it. But I think events have proven that they are not particularly smart.