Market Insight

Amazon introduces Kindle Unlimited

July 21, 2014


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Amazon, the online retail giant, has launched an eBook subscription offer, Kindle Unlimited. The $9.99 per month service allows customers access to over 600,000 Kindle books and thousands of audiobooks. Subscribers also get a complimentary three-month Audible membership which includes access to all Audible titles. Audible is an Amazon subsidiary.

Kindle Unlimited is available in the US from July 18, 2014 and can be accessed from Amazon’s Kindle family of tablets and eReaders as well as the Kindle reading app on other platforms.

Our analysis

Kindle Unlimited serves two prima facie purposes for Amazon:

  1. It is a way to retain current customers in the face of competition from ebook subscriptions services like Scribd and Oyster. As with traditional ‘book of the month clubs’ for physical product both of these competitors has, so far, remained relatively niche. However, launching Kindle Unlimited should mean that Amazon continues to super-serve dedicated readers which have historically been an important segment for the company and by doing so it minimizes the competitive risk if ebook subscriptions become more like Netflix than physical book subscriptions.   
  2. As with Amazon Prime—including Instant Video and Prime Music—Kindle Unlimited should help to keep users engaged with Amazon and will should lead them to spend more money with the company.

eBook subscription services compare similarly to digital movie and TV subscriptions like Netflix in that they run on a windowing system. Historically, publishing ran on a windowed system with expensive hardbacks released first and cheaper paperbacks coming out at a later date. Digital creates a third window not dissimilar to windowing that occurs with movies and TV. eBook subscriptions services are able to exploit older content and provide them in digital format while also releasing newer content.

 

Geography
North America USA
Organization
Amazon
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