Amazon looks at the Netflix model

There’s been a lot of talk this week about the reports that Amazon is considering a Netflix-style digital book library that would offer people all-you-can-read access for an annual fee.

I’m skeptical this will come to fruition, though. The Big Six legacy publishers aren’t going to part with their backlists on the cheap. Everything they own the rights to, they’re going to roll out onto the Kindle over time. There are huge profit margins involved here and selling backlist material at $3 to $5 allows them (in their minds) to justify the $8 to $12 price of new bestsellers on the Kindle.

Amazon could force publishers and independent authors into the program in exchange for the right to publish on the Kindle, but that kind of scorched-earth move would backfire in a hurry. Instead, I think we’re more likely to see Amazon acquire a publishing house or two in the coming years and increase its footprint as a digital publisher.

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