‘Kindle Free Book Lending Holy Sh*t!’

That’s the full text of an e-mail my dad sent me this morning. He’s referring, obviously, to Amazon’s launch of the Kindle lending library for Prime members who own both (he is one of those people, as am I). This program is pretty much totally great news for Kindle owners, and I wanted to take a moment to recognize that before I launch into the rest of this post. Update: Whoa, users aren’t the only ones saying “Holy sh*t” today. Click through for more details on a shockingly ballsy move by Amazon.
Update: According to a report from Publishers Lunch, Amazon did not actually receive publisher consent for all the titles that it is including in the program. In those cases where it’s buying the books one at a time, it’s doing so without the publishers’ permission. Michael Cader received this statement from an Amazon spokeswoman:

For a minority of titles in the service, we added titles that we currently sell under wholesale terms, which we are purchasing in exactly the same fashion as when a customer buys a book a la carte from the store. It is essentially an Amazon-funded promotion, much the same as a Kindle Daily Deal or our long-standing 4-for-3 deal in children’s books, where the author and publisher are compensated identically regardless of whether a book is purchased or borrowed.

For a lot more, click here (registration required). Important note here is that some publishers are not actually aware that their books are included in the program. I’ve started a Google Doc to list all of the titles included; if we crowdsource it, we should be able to get a complete list fairly quickly. Update 2: Here is the list on Amazon.
The rest of my original post:
This is also a big achievement for Amazon (NSDQ: AMZN). We’ve heard the idea of a “Netflix (NSDQ: NFLX) for books” tossed around so many times now, and the fact that the company now actually has this program up and running–less than two months after the rumors first trickled out, though it’s probably been in development for longer than that–is impressive. Not only that, but Amazon has actually gotten publishers to participate. The library includes 5,157 books at launch, from publishers including Scholastic, W. W. Norton, Algonquin, F+W, Bloomsbury, Grove/Atlantic, Lonely Planet, RosettaBooks and, of course, Amazon Publishing.
Missing from that list are some big names–all six “Big 6” publishers, in fact. They are wary of devaluing books and harming their relationships with other retailers, despite the fact that Amazon is offering them a lot of money to participate in the program.
Amazon really wants these publishers to participate; in fact, I was struck by the extent to which the press release announcing the Kindle Owners’ Lending Library is directed toward publishers. It contains two quotes from book publishers who are participating: David Nussbaum, CEO of F+W, and John Boris, EVP of Lonely Planet. “We’re excited about any program that helps readers discover our authors and their books,” Nussbaum says in the release. “We think this will lead to more people reading F+W’s books, and more profit for our authors.” Amazon is using publishers who have already signed up to make its case to other publishers.
Also, for possibly the first time in history, Amazon answered a question I had in its press release. The company publicly explains how the arrangements with publishers are working:

For the vast majority of titles, Amazon has reached agreement with publishers to include titles for a fixed fee. In some cases, Amazon is purchasing a title each time it is borrowed by a reader under standard wholesale terms as a no-risk trial to demonstrate to publishers the incremental growth and revenue opportunity that this new service presents.

That’s right: Amazon wants publishers to participate in this program so badly that, in some instances, it’s actually buying the book from them every time someone a user borrows it. That is not the kind of information that Amazon usually shares, but in this case it’s doing so to entice wary publishers: “Don’t like the fixed fee idea? No problem, we’ll just buy the book from you every time someone wants it.” I’d love to know which publishers are participating in which type of agreement; sadly, I don’t think that info is forthcoming any time soon, but I’m sure it was a good way to get a few more popular titles into the library.
This is a great deal for Kindle-owning Prime members, since it allows them to borrow books without any waiting lists at the library. (Of course, they’re limited to one title per month, but it’s twelve more free books a year than they had yesterday.) It’s a deal that Amazon believes will pay off. As for the publishers participating? They’ll have to wait and see. Update: As for the publishers not participating, but participating? This has been a really weird day for them and it’s unclear how they are going to proceed. Publishers Marketplace notes that they may not even know yet whether their titles are being included, since the full list is only available through a Kindle e-reader and not on Amazon’s website. I expect the full list of titles–as well as a lot more reaction–to trickle out now that the news has broken.