Amazon’s ‘Netflix for Books’ is here

Amazon has launched its long rumored ‘Netflix for Books’. The Kindle Owners’ Lending Library allows Kindle owners having an annual Amazon Prime membership to borrow 1 book per month – free and with no due dates. While this is short of the expected ‘eat as much as you can’ plan, it certainly increases the attractiveness of the Prime service, which adds free books to its existing 2 day shipping and free movie streaming benefits.

 

Image via Amazon

This also seems to be a test of sorts for a much larger launch – perhaps an eventual ‘read as much as you can’ book rental service.

For the vast majority of titles, Amazon has reached agreement with publishers to include titles for a fixed fee. In some cases, Amazon is purchasing a title each time it is borrowed by a reader under standard wholesale terms as a no-risk trial to demonstrate to publishers the incremental growth and revenue opportunity that this new service presents.

Read more at Introducing The Kindle Owners’ Lending Library.

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Giving an eBook free for a limited time: A new business model?

Scott Berkun, who worked with Microsoft on Internet Explorer till 2003, now works for Automattic on WordPress.com, and is the author of three previous books, Confessions of a Public Speaker, Making Things Happen and The Myths of Innovation, is giving away his latest book, Mindfire, for free. Only for 48 hours.

This is an interesting mix of the Freemium model and sampling strategy. Most of the content in the book is curated from the author’s blog and hence is already accessible for free, albeit in piecemeal form. The hard copy of the book sells for $8.69 on Amazon and the eBook would also have a price after the free giveaway is over. By giving away the book for free, the author would benefit from word-of-mouth publicity and resultant sales. This would also increase the number and quality of reviews available for the book on Amazon, thereby positively impacting future sales of this and other books. Finally, people who like the free sample may be driven to purchase a copy of the author’s previous works.

Read more and get the book at Mindfire: Download free for 48 hours « Scott Berkun.

Digitizing Paper Books

1DollarScan.com offers to digitize any book @1$ per 100 pages. Ship your  books to them and they send you PDFs in return. To avoid copyright issues, the firm scans each book, destroys it and does not maintain master digital copies on their servers.

Implications of this service are huge – publishers will gain by the removal of books from the huge second-hand book market. However, they may argue that they are loosing potential digital books sales they could have made to the users of 1DollarScan.

There are also several grey areas – it is not clear which rights apply to the PDFs of hard copy books – owners have greater rights over analogue books as compared to digital books. For example, can one borrow a PDF of an analogue book without breaking the TOS of the digital version of the book? Also, when someone buys an analogue copy of a book, do they get the right to digitize it? Or would copyright law require them to buy a separate digital copy?

Read more at Media digitisation: Book transubstantiation | The Economist.

Content Wars: Amazon adds Fox

Amazon has announced that it will now offer movies and shows from FOX. This takes Amazon’s instant streaming offerings to 11,000 versus 20,000 for Netflix versus 5,000 for Blockbuster. The past week has seen several developments on the Content Wars front, with the release of Blockbuster’s Movie Pass and Netflix’s deal with Dreamworks.

Amazon’s announcement comes on the heels of its ‘Kindle Books through public libraries‘  deal. There are rumors of a Netflix for Books offering as well. It seems Amazon is adding content muscle in preparation for its Android Tablet.

FOX titles available to Prime members will include contemporary movies such as, “Speed,” “Mrs. Doubtfire,” “Doctor Dolittle,” “Last of the Mohicans,” and “Office Space,” as well as classics like “The Longest Day,” “All About Eve,” “9 to 5,” and “Butch Cassidy and the Sundance Kid.” FOX also brings to Prime members a selection of popular TV series including “24,” “The X-Files,” “NYPD Blue,” “Arrested Development,” “Buffy the Vampire Slayer,” “Ally McBeal,” and newly available on digital video, “The Wonder Years.”

via Amazon Announces Digital Video License Agreement With Twentieth Century Fox

Wither Netflix, Blockbuster Redux?

In 1998 Reed Hastings founded Netflix, the lar...

Image via Wikipedia

Considerable online and print real estate has been dedicated to the recent announcements by Netflix and Blockbuster. However, it seems that neither company has paid much attention to the critical B word – bundling.

First, a recap.

Till recently, Netflix was the darling of Wall Street. It was also a much analyzed case study in class rooms. Netflix was toasted as an example of how to disrupt an industry with a new technology enabled offering. The success of Netflix was in many ways responsible for the bankruptcy of Blockbuster, which was a behemoth of the traditional movie rental market. Netflix offered a eat-as-much-as-you-can streaming option along with a 1, 2 or 3 DVD-in-the-mail option. Bundled together.

Then, Netflix did two things – first, it increased prices by 60%. Second, it announced a split of its bundle. It announced that streaming and DVD-in-mail services will be separated into two different companies, with different websites.

Outraged users have been leaving in droves. The Netflix stock is down by more than 50%.  However, this might just be the beginning. The real value destroying act is not the price increase, but it is the impending unbundling.

Blockbuster on the other hand, after being acquired by Dish Network, has announced a combined streaming, mail and on-demand service. It promises a 100,000 strong library and unlimited DVD / BR exchanges through its  numerous retail locations.  While the offering sounds strong at first look, the fine print shows that only Dish subscribers can avail of it.

Why did we get here?

Netflix clearly understands that digital streaming services are going to disrupt the industry, much like its DVD-in-the-mail plan did in the nineties and early noughties.  It also realizes that it has to increase the size of its streaming library, and hence pay top dollar to the content owners. These seem to be the most plausible reasons behind its recent actions. While this is a great strategy in the medium term, a medium term strategy is only good if you are able to survive the short-term.

What’s the bungling / bundling issue?

This Wikipedia article on bundling suggests

Bundling is most successful when:

Consumers appreciate the resulting simplification of the purchase decision and benefit from the joint performance of the combined product.

Netflix users appreciated the joint performance of the bundled product as it fulfilled two needs simultaneously:

  • I need to watch something, at this time.
  • I need to watch this thing, at some time.

With the unbundling of this product, Netflix users have been greatly inconvenienced. They have to pay 60% more, and have to spend much more time maintaining two separate queues of movies on two different websites. Consequently, they seem to be looking to shop elsewhere for their needs. For example, to meet their ‘I need to watch this thing, at some time’ need, they may go to iTunes or RedBox. Similarly, to meet their ‘I need to watch something, at this time’ need, they may turn to Blockbuster. Or so seems the thinking at Dish headquarters.

However, the bundle offered by Dish is a $30 quad-play. It contains the DVD, streaming and on-demand plus Dish cable. Hence it is more likely to appeal to customers who are primarily searching for a cable provider. Furthermore, reports suggest that Blockbuster’s streaming library is less than 5,000 titles – as compared to a paltry 20,000 for Netflix. Hence it is not a one for one replacement.

Clearly, both companies are bungling the bundling.

Thus there is now a large unmet for a bundle that offers unlimited streaming and DVD, at an affordable price, in a convenient manner. Netflix’s abandoning of this market has hurt it already and will certainly continue to hurt it in the short-term. If it is lucky and no serious competition arises during this period, then it may be able to flourish in the medium and long-term.

Storing Annotations on the Cloud: Kindle books at libraries

A Picture of a eBook

Image via Wikipedia

Amazon has announced that Kindle books can now be borrowed from local libraries in the US. There are two key points to this announcement –

  1. Availability – these books will be available at over 11,000 local libraries.
  2. Advantage of ebooks over traditional paper books – customers will be able to take notes & make annotations (which Amazon will store, for free, on its amazing Amazon cloud). Thus if you borrow or buy the book in the future, your notes will still be there.

This may have major implications on consumer buying and consumption habits – for example, no more waiting for a book to get returned (assuming that there will be no limit to the number of Kindle copies of a book that are ‘stocked’ at a given library). Also, the books will feel like personal copies of the book due to the annotations.

Instant access and a personalized book reading experience – guess some folks may decide not to buy a copy of that ol’ book that they revisit once every few years!

Here is the Amazon press release – Kindle Books Now Available at over 11,000 Local Libraries.