When Amazon began offering one free (ostensibly “borrowed”) e-book per month to members of its new Prime program, I was intrigued. I don’t know if a free digital book a month from Amazon is a good thing or a less-than-good thing, or whether the terms are good, bad, or indifferent. What I do know is that refusing to participate in Amazon Prime denies publishers, authors, and agents one thing they need most: data.
Amazon’s offering free content to Prime members could be interpreted many ways: as a demonstrable belief in digital reading; a continued push for the Kindle platform; a test to evaluate the impact of free content on purchase behavior; or even a revival of the “book of the month” concept. So far, authors, agents, and some publishers seem to think of it another way: theft.
To be clear, Amazon is paying publishers, and through them, authors and agents. Some publishers are receiving lump sums, and others are being paid the full wholesale price for each e-book borrowed through the program, just as if it were a sale. And Amazon is releasing only one title at a time, one per month, for any given account, and deleting the prior month’s book when the new one is picked up.
In effect, Amazon is conducting an experiment with hundreds of thousands of digital readers. Yet all the Big Six publishers have opted out of the program, and organizations like the AAR and the Authors Guild are offering advice on how to keep Amazon from offering people even a whiff of “free” digital reading.
There are valid concerns, of course. For one, the largest publishers all have agency agreements that limit what Amazon can do with e-books. And, for some, the Prime offering might qualify as a license, an arrangement that might provide authors with an improved revenue split.
But rather than summarily withhold all their titles, wouldn’t publishers (and publishing) be better served using Amazon’s program to test the impact of free or low-cost content on trial and purchase behavior? Admittedly, Amazon has not always led the way when it comes to data transparency. But that doesn’t mean we should assume their interests here are antithetical to the interests of publishers and authors. Assuming this, turns what could be a learning opportunity into a potentially costly negative-sum game.
“Free” digital content is already a well-established promotional vehicle. In a 2009 research paper examining the impact of free digital content (including pirated titles) on paid book sales, I looked at several experiments that used free digital content to promote authors, series, and (in one case) to revive a title after almost a year in print. Others, too, have also written about the use of “free” content in consumer promotions. The sample sets are small, however, and the conclusions reached are necessarily limited. Amazon, on the other hand, is one of the only retail platforms that can offer us a deeper look at the impact of digital promotions on both physical and digital sales.
Sometimes we forget that, relative to other entertainment options, reading books is hard work. It takes hours of active engagement. Personally, I think that’s a good thing, but as a somewhat slower reader, I feel the competing demands on my time. With that as a backdrop, I favor things that can lower the barrier to entry and make books more easily read. A limited number of “free” e-books may help do that and may grow the size of the pie, benefiting not just current authors and publishers but future ones as well.
Certainly, that’s Amazon’s argument, although, as O’Reilly Media’s Joe Wikert has blogged, Amazon’s terms may not be what publishers want or deserve. Here’s the thing about terms, though: most of them presume a static world. The world of content distribution is changing, however, and the models for delivering content are evolving at a rapid pace.
For the moment, we need not qualify the Amazon Prime e-book lending program as the future of publishing or its inevitable demise. We need to call it what it is: an experiment. I can understand how free digital content undermines contracts written for the physical world. We might yearn for higher prices and windowed releases. But at some point, the cost of holding fast to what we’ve known exceeds the benefit. Maybe it already does.
Brian F. O’Leary is founder and principal of Magellan Media, a management consulting firm that works with publishers.