September 18, 2014

Librarians, Media React to Launch of Kindle Unlimited

Kindle Unlimited In a long-expected move, Amazon on July 18 announced the launch of Kindle Unlimited, a new subscription service that will give users unlimited access to a selection of 600,000 ebooks and more than 2,000 audiobooks on Amazon Kindle devices and any device with a Kindle app for $9.99 per month. Amazon is not first to market with an “all you can read” commercial ebook subscription platform—it follows last year’s launch of Scribd and Oyster. But the online retailer’s financial resources, marketing clout, and massive base of Kindle users will doubtless raise consumer awareness of ebook subscription services while altering the competitive landscape for all providers of ebooks, including libraries.

“I’m enough of a realist to assume that consumers will gravitate to the cheapest, most convenient source of content, whether that’s Amazon or the public library,” said Jimmy Thomas, executive director of Colorado’s Marmot Library Network. “Amazon continues to set a high standard of convenience libraries should attend to. And every time this huge corporation does something on a massive scale, libraries should be reminded to approach services differently. Competing with Amazon on its own terms is not a good direction for libraries. But thinking about how to complement Amazon is worthwhile.”

Describing the service as a potentially “disruptive challenge to libraries,” Jamie LaRue, principal of LaRue and Associates Consulting, told LJ that “even in rural areas now, a lot of folks have ereaders, and find that they prefer ebooks. This kind of service, at that price point, will probably result in another market shift. $9.99 is a pretty good deal. And let’s remember that the average monthly payment per household for libraries is only $2.68.”

Amazon’s appetite for market share remains voracious as ever, noted Eric Hellman, president of Gluejar and its unglue.it site, which helps make specific ebook titles free under a Creative Commons license. “It’s clear that Amazon sees ‘free’ as its competition in the ebook space. And yes, libraries occupy space in the ebook market that Amazon wants for itself.”

The reviews are in

At launch, there are chinks in the armor of this new 600,000 title behemoth. While Amazon has publicized the availability of popular series including “Harry Potter,” “The Lord of the Rings,” and “The Hunger Games,” as many as 500,000 of the titles currently available on Kindle Unlimited were self-published through Amazon’s Kindle Direct Publishing (KDP) Select program, according to publishing industry newsletter Publisher’s Lunch. At least for now, the “big five” publishers—Penguin Random House, Simon & Schuster, HarperCollins, Macmillan, and Hachette Book Group—are not part of the Kindle Unlimited offering. So, despite the size of this initial collection, many libraries still have access to plenty of popular ebooks that are unavailable through the service.

“From a library perspective, Kindle Unlimited seems unlikely to affect demand for library materials at all,” said Sarah Houghton, director of California’s San Rafael Public Library (SRPL) and blogger at LibrarianInBlack.net. “Six hundred thousand titles is not a lot.  Our library participates in Link+, a cooperative lending project that makes tens of millions of titles from libraries across California and Nevada available in print to our communities—at no charge to them.”

SRPL’s ebook catalog also offers about 50,000 ebook titles, Houghton added. In terms of raw numbers, that might seem insignificant by comparison, but Houghton contends that “our selection is also much better than what you’d find in Kindle Unlimited, including most bestselling titles from the Big Five publishers.”

Amazon’s announcement was initially greeted with mostly unvarnished praise on Twitter and other social media channels, but several major media outlets gave Kindle Unlimited somewhat tepid reviews once they had the opportunity to explore the service.

Washington Post consumer tech reporter Heather Tsukayama wrote, “if you want any of the top five current New York Times fiction bestsellers, for example, you’re not going to find them in the Unlimited catalog…. I recently did a rundown of other companies that are trying to be the ‘Netflix for books,’ before this announcement. What I found is that no book subscription service has everything you want to read.”

An Associated Press review also highlighted the lack of bestsellers, with technology editor Anick Jesdanun writing that “it turns out the library of 600,000 is bit like a small bookstore with a few current titles such as ‘The Hunger Games’ [series], attached to a block-sized bargain bin of obscure stuff mixed with Robinson Crusoe and other classics that are in the public domain and available for free online anyway.”

Jesdanun did go on to praise an audiobook feature that synchronizes ebooks with their corresponding audiobooks, so that users can stop reading an ebook, and then have the audiobook version pick up where they left off. However, the ultimate verdict was that users would need to read three or more books per month to get any value from the subscription, and “the limited selection makes it tougher to find those three books a month, especially for those who already get a book a month for free through [Amazon] Prime.”

Similarly, Victor Luckerson at Time magazine’s Techland blog estimated that users “would need to read more than 16 books per year to derive a greater value from Kindle Unlimited than buying the books individually.”

Publisher problems

On The Economist’s Babbage blog, columnist Glenn Fleishman expressed skepticism about the possibility of Amazon negotiating subscription deals with any of the Big Five publishers in the near term, writing, “what people want to read should provide a strong market force. Publishers already wary of Amazon during its brutal Hachette negotiations may be disinclined to grant more power to the firm by allowing their catalogues to increase the volume of volumes on offer.”

Heather Teysko, director of innovation and development for the Califa Library Group, also noted the lack of goodwill that Amazon has with these publishers.

“I can’t see the Big Five going to [Kindle Unlimited] any time soon because of the contract disputes, like with Hachette,” she said. Teysko noted that that Califa’s enki ebook platform doesn’t offer Big Five titles, either, but questioned how a commercial subscription service could work without them.

“I’m not the biggest fan of the Big Five, and we’ve taken the strategic decision not to ‘go after’ them for enki, but I’d imagine that if a patron is paying $9.99/month for something, they’d want at least some of them. I would.”

Meanwhile, several independent publishing advocates expressed their own doubts about the new service.

Mark Coker, founder and CEO of indie ebook publisher and distributor Smashwords, wrote on his company’s official blog that while he was “pleased to report” that Scribd and Oyster were the fastest growing retail channels at Smashwords, “Indies would do well to avoid Kindle Unlimited for one simple reason: it requires KDP Select exclusivity.”

Authors enrolled in KDP Select give Amazon the exclusive rights to publish their ebooks in exchange for free marketing via Amazon’s Kindle Countdown Deals and free book promotions. So, an independent author could not make their work available via Smashwords or any other ebook distributor.

While stating that Amazon deserves “massive kudos for catalyzing the rise of ebooks,” Coker argued that “exclusivity starves competing retailers of books readers want to read, which motivates readers to move their reading to the Kindle platform. This is why Amazon has made exclusivity central to their ebook strategy. They’re playing a long-term game of attrition.”

On his blog, Hugh Howey, author of the sci-fi hit Wool—which was originally published via Amazon KDP—noted that the Kindle Unlimited service relies on a two-tiered payment system. “Traditionally published authors get the full price, because their publisher gets the full sales commission,” Howey explains. “Self-published authors get a flat fee, probably something around $2 per read. There have been howls over this bifurcation, with people claiming that Amazon, for the first time, is treating indies worse than traditionally published authors. But that’s not true. Amazon has often treated indies worse than traditionally published authors.”

Don’t mention it

Regardless of how the service and its available selection are ultimately viewed, Amazon’s sheer size and influence over retail and publishing ensured significant media coverage during the past week. And while Slate did syndicate an Inside Higher Ed reaction column written by Gustavus Aldolphus College librarian Barbara Fister, some librarians found it vexing that the vast majority of reviewers and reporters failed to mention libraries as part of the modern ebook lending landscape when comparing Kindle Unlimited to competitors such as Oyster and Scribd. Or, less frequently, writers used the announcement as an opportunity to pen op-eds about the death of libraries.

“This massive amount of press attention is not only discussing a new service—and who knows how it will turn out—but more importantly, they rarely mention libraries and what they offer,” said Gary Price, editor of LJ infoDOCKET. “So, it’s as much [a point of concern] about mindshare and relevance as it is about a new Amazon service.”

This low level of awareness regarding ebooks and other online resources available for free through public libraries remains troubling, Price added. Even in a best-case scenario—in which these subscription services have no direct impact on library circulation or library ebook book borrowing—their marketing efforts, combined with media coverage that regularly ignores libraries, does shape public perception regarding the relevance of libraries.

“I found that the mainstream media made a big deal immediately about comparing it to the other subscription programs out there, like Oyster and Scribd, but only recently through pop culture media, such as The Awl and Jimmy Kimmel) to get out there and say ‘Hey, libraries already do this too?’” said Kristi Chadwick, advisor, small libraries, for the Massachusetts Library System (MLS), emphasizing that she was expressing a personal opinion and not speaking on behalf of MLS.

It’s not that librarians aren’t trying to get this message out, she added, “but where Amazon is concerned, I feel we are shouting into the void at times.”

Linda Braun, youth services manager at the Seattle Public Library, noted that “what’s problematic is that it shows that other media don’t understand what the role of the library is—that we do have these resources and we do play an important role in the community.”

Noting that Netflix had grown from startup to 36 million subscribers—30 million now streaming—in 15 years, Price added that libraries ignore the growth of these services at their peril. Amazon, he reminded infoDOCKET readers, already has three years of data on library titles that were borrowed via OverDrive using a Kindle device or app, giving them an edge should they choose to target library users with this service. And arguments that libraries will always be unique in their offer of free content may no longer be accurate if one of these services decides to pursue an optional ad-supported model, akin to Spotify. The entrance of a major new competitor into a market often drives such innovations.

“The apparent entrance of Amazon into subscription market is exciting for the industry as a whole,” Scribd co-founder and CEO, Trip Adler, said in a statement to the press. “It’s validation that we’ve built something great here at Scribd. Publishers, authors and readers alike have all seen the benefit, so it’s no surprise they’d want to test the waters. Successful companies don’t fear competition, but rather embrace it, learn from it and use it to continue to fuel their own innovation which is exactly what we intend to continue doing.”

Room for everyone

More competitors may soon follow. On July 22, the Book Industry Study Group (BISG) released the results of an extensive survey of 4,000 industry professionals including publishers, libraries, book sellers, and aggregators, and 80 percent of respondents said they believe that ebook publishing was inevitably moving toward subscription-based models. Libraries may want to start considering the possibility of a world in which a retailer—such as Amazon—has managed to get all of the Big Five on board with an affordable subscription service, and how they might respond.

“It seems like everyone is seeing these subscriptions as an inevitable way that the business is going, and I think that, for libraries, it just means that differentiating your collection and focusing on what makes the library collection unique is even more important,” said Teysko. “Offering the bestsellers through vendors won’t necessarily be as appealing if the Big 5 come on board, and patrons can borrow them for $10/month, but at the same time, highlighting local authors, encouraging local authors, showcasing local history; these are all things that the library can do to differentiate themselves.”

As surveys by LJ and others has shown, regular library users tend to read many more books each year than the average U.S. consumer. They borrow more, buy more, and use e-readers more frequently. For now, Chadwick said she thinks that these new subscription services will likely fold into many users’ reading habits without an adverse effect on libraries.

“Honestly, I think that it has its place in the whole ecosystem of ebooks and readers, from a holistic viewpoint,” she said. “It gives access—as do we—and people are going to choose what they want to have access to based on their needs. We just need to ensure that libraries stay part of that need as new programs and models appear.”

Braun pointed out that as these subscription services emerge and become more popular, libraries will need to be prepared to provide access to content to users who cannot afford subscriptions, and to help other patrons learn how to use these services, much as libraries continue to do with e-readers, tablets, and more recently, streaming devices.

“The public library is part of the local community, which is something Amazon—and Google, for that matter—can never be,” Thomas noted. “Working on services in and with the community seems like an advantage public libraries will long have.”

LaRue agreed, noting that “even if it’s multiplatform, and authors approve, and they have all the best sellers, there will still be a place for the libraries—children’s services, sanctuary, meeting space, study space, maker space. But for most public libraries, circulation is the driver—and this is clearly a shot across the bow.”

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Matt Enis About Matt Enis

Matt Enis (menis@mediasourceinc.com; @matthewenis on Twitter) is Associate Editor, Technology for Library Journal.

Comments

  1. Jan Elkins says:

    I am a librarian and an Amazon user. I signed up for the free month trail and already I have found some titles that are available on Unlimited that we do not have at the library and probably will not add. I think it is going to be a great source in addition to the library.

  2. sue harvey says:

    I’ve read some of the Amazon books and from my experience, I won’t add another bill to my household. Poor editing, spelling, grammar on some. Not complaining I can tolerate because they were free. But $120/yr no thanks. Love my library and ebooks available thru them

    .

  3. One reason the eBook offerings of public libraries are often overlooked in pieces such as this one is that access to eBooks via Overdrive is complicated and difficult, selection is limited, and availability is even more limited. (I gave up on acquiring eBooks through my PL long ago.) Along comes a Kindle Unlimited, and public libraries have a very tough time competing, or even being perceived as competitive.

    If publishers, writers, and public libraries don’t get together very soon and forge a service that would be a huge benefit to everyone involved (such as the one I describe in Part II of my series, The End of Libraries, at http://alltogethernow.org/showtag.php?currid=85), then we will all be delivered into the arms of predatory capitalism (and I don’t blame Amazon for acting as any capitalistic enterprise should act).

    There is a better way, and it’s time all parties involved woke up to that fact, and took the steps necessary to implement it.

    • If you haven’t tried Overdrive in the past 6 months, give it another shot. There have been huge changes to reduce the number of clicks and streamline the entire process of borrowing e-material from libraries. The hardest part is the Adobe ID and once you’re over that hurdle, everything is easy and takes seconds to get a book onto a device. Also from my experience, requesting e-material is faster than requesting the hard copy from the library even when there are more copies of the physician item.

  4. ” But for most public libraries, circulation is the driver— and this is clearly a shot across the bow.”

    Maybe we should stop funding libraries based on circulation statistics. Especially since we provide so much more than books.

  5. Any coincidence that Amazon’s stock price has fallen recently – investors are getting tired of it not having returned a profit since its inception. Other companies, like Overdrive and now 3M, don’t have the long “honeymoon” which Amazon has had.

    Stockholder pressure could cause Amazon to raise prices and limit offerings very quickly.

  6. Matt Enis Matt Enis says:

    Hi Dan,

    Mr. LaRue occasionally posts comments on LJ and TDS, so maybe he could answer you directly. I got the impression that this was more of a general statement that ereader and ebook use are growing in rural areas as well. This issue would be of particular concern to small libraries serving rural communities, since ebook licenses and platform fees are priced out of reach for many of these small libraries.

    LJ’s recent materials survey indicated that ebooks account for about 3% of circulation at rural libraries, compared with 8% to 10% in systems serving 50,000 or more people.
    http://reviews.libraryjournal.com/2014/03/collection-development/materials-shift/ That could be due to availability as much as anything else.

    Hope this helps

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