At this point we know that the Kindle as a physical purchase is not where Amazon is looking to make their money. If anything, the fact that they have gone to ad support indicates that there has been a need to get inventive to further reduce prices while not actually losing money on every sale. Knowing this, we have to assume that the big focus will always be on selling the most content. With an emphasis on renting, lending, and sharing eBooks lately, though, is this a genuinely achievable goal?
Right now we are hearing about the fact that Overdrive will soon be bringing Kindle compatible library books. Definitely a selling point for Amazon, since up until now it has been a major complaint against the platform. We also now have textbook rentals that can save renters as much as 80% over the purchase price of the book. Between the two options, I’m seeing a theme forming and looking to other media rental business models that seem like they have a real chance of finding their way to the Kindle.
The obvious one would be the Audible.com approach. Get users to subscribe for a monthly fee, perhaps as a means of getting a cheaper or free eReader, which locks them into picking out a certain number of eBooks to add to their library on a regular basis. Amazon has experience with this one and it would certainly work as a way to reduce eReader prices even beyond what the Kindle w/ Special Offers has been able to do. I don’t think it will happen, though. For something like this to work, Amazon would have to be able to provide value to subscribers beyond what they have control over with the current Agency Model pricing. Lack of control means lack of options.
More likely, to me at least, is the Netflix model. Picture spending $10 per month to access as many books as you want, so long as you only have one checked out at a time. There would have to be some sort of artificially produced swap delay, of course, since otherwise subscribers could simply jump back and forth at will, but if the system only allowed a book to be checked out once per month or only allowed one change per day (which doesn’t seem unreasonable since the Kindle Store already generally provides sample chapters and this would only be for reading entire books) then it would work. The profit would be available since most everybody has periods where their reading tapers off in spite of best intentions, and one would have to assume that an arrangement for multiple-use licenses would still be cheaper overall than per-user purchases. If something like this could be managed in spite of the total control that publishers want over their distribution, it would be the next big thing for the Kindle. Admittedly, it is something of a divergence since reading has always had a certain element of collection attached to it for many people, but I think the opportunity to save the money would make all the difference.