Concern grows in US over Kindle lending

Concern is growing in the US over the launch of Amazon's Kindle lending initiative. Amazon launched the new service last week aimed at Kindle-owning Prime users, but publishers have expressed concern over titles appearing in the programme without agreement, while agents said they were worried over how the 'free' loans would impact royalty rates.

Kindle owners who subscribe to its Amazon Prime programme will now be able to download one free e-book a month from a selection of 5,000 titles in the library. However, according to the US trade website Publishers Marketplace, publishers and agents said that some featured titles had been placed in "this new initiative without the consent or affirmative participation of the publishers and rightsholders". Amazon has already admitted that in some cases "it was 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".

The Wall Street Journal reports that none of the six largest publishers in the US was participating, with PM citing concerns over how the initiative would "empower" one retailer over another. Under agency terms Amazon would not be able to price-promote titles without the publisher's consent.

The WSJ notes that the new service, called Kindle Owners' Lending Library, cannot be accessed via apps on other devices, which means it won't work on the iPad or iPhone. This restriction is intended to drive Kindle device sales, said Amazon.

The Association of Authors' Representatives said it was concerned about how individual authors would be rewarded for the loans of those books for which Amazon does not have to pay a fee. According to a note on its AARdvark site there are worries about how publishers who are paid a lump sum by Amazon for including titles will go about rewarding individual authors, and whether these 'sales' are to be considered a secondary right, under which publishers would be required to pay a higher royalty rate, possibly as high as 50%.

"The Kindle Owners' Lending Library is a great new benefit for Kindle owners and an entirely new growth opportunity for authors and publishers," said Russ Grandinetti, vice-president, Kindle Content.

Publishers included at launch are Lonely Planet, Rosetta Books, and F+W Media.