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Thursday Midday Links: Amazon Launches a Lending Library

If you own a Kindle device (as opposed to using an App) AND you are a Prime member, you can take advantage of Kindle Owner’s Lending Library.  It has about 5,000 titles in there and it’s all non agency books.  While Agency publishers (and others) are balking at the potential loss of revenue, I would think that the Agency model would prevent participation in the lending library.  How it works is that  Kindle owners can borrow one book a month.  Amazon pays the publisher either a flat fee or the wholesale price of each book when it is requested.

There are some popular titles like Hunger Games and Fast Food Nation.  What’s Amazon’s goal here? To bulk up Prime Memberships and sell Kindle devices.

According to this September 2011 article at Practical eCommerce, Prime members spend a lot more at Amazon than any other customer.

  • In 2009, Amazon had 2 million Prime members. In 2011, Prime has 5 million members out of a total 121 million Amazon customers. Although that represents only four percent of all customers, Prime is growing at over 20 percent year-over-year;
  • Once they join Prime, Amazon’s customers’ gross merchandise volume grows from $400 a year to $900 a year in their first year of membership;
  • For each one million Prime members, Amazon’s revenues increase by 1.5 percent;
  • Prime members spend 130 percent more than regular Amazon customers;
  • 92 percent of Prime members surveyed by Piper Jaffray plan to renew their membership.

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Harlequin had a good third quarter but the forex adversely affected them:

In the quarter, reported revenue fell to C$115.7 million from C$117.5, although sales would have been up C$600,000 excluding the impact of foreign exchange. Parent company Torstar said digital sales at Harlequin rose C$7.5 million in the quarter as the publisher continues to adapted to the growing demand for e-books while profits were helped by lower book returns. In the third quarter, excluding foreign exchange, North America division sales were up C$1.2 million and overseas down C$0.6 million.  Harlequin operating earnings were up C$2.0 million in the third quarter excluding the impact of foreign exchange, with North America up C$3.0 million and overseas down C$1.0 million.

Digital revenues were 15.8% in the third quarter.  I was actually surprised by the 18.5%. Many other publishers are seeing 20% of their revenues from digital and Harlequin has been at the forefront of pushing digital sales.  I would have expected to see Harlequin have higher digital numbers.  It does appear, however, that the digital sales are growing at a faster rate than the decline in paper books which might signal that Harlequin is expanding its audience through digital.  I’m unsure about this but that is what I gleaned from the reports by PW and Publishers Marketplace.

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Pearson, the parent of Penguin, has announced a 6% increase in overall sales.

Pearson increased sales by 6% and operating profit by 13% in the first nine months of 2011. Our businesses once again produced strong competitive performances in generally weak market conditions, benefiting from premium content and services, digital innovation and presence in developing economies.

Specific to Penguin, the press release states:

At Penguin, sales were level with 2010. With strong publishing and the continued rise of eBook sales – which more than doubled in the first nine months of the year – Penguin offset the industry-wide decline in physical retail markets. Publishing highlights in the third quarter included the trade paperback of Kathryn Stockett’s The Help in the US and, in the UK, Jamie Oliver, Marian Keyes and Dawn French. The fourth quarter is an important selling season in consumer publishing and Penguin has a strong publishing line-up of bestselling authors including Tom Clancy, Patricia Cornwell, Sue Grafton, Daniel Yergin and Steven Pinker in the US; and Jamie Oliver, Lee Evans, Rob Brydon and Jeff Kinney in the UK.

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According to PublishersMarketplace, Harpers’ revenue and profits were up for the first quarter, although no specific numbers were provided.

Instead they now say that for the fiscal year so far print books “sold through bricks and mortar retail” accounted for 77% of worldwide sales and 71% in the US.

 

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

19 Comments

  1. Tina
    Nov 03, 2011 @ 12:21:55

    I have to say I love my prime membership. Two day free shipping is no joke. I don’t own a truck and delivery from my local Home Depot would have been about $75.00. So what did I do? I bought my Weber Grill and my Black & Decker lawn mower through Amazon. Two-days later I am grilling and mowing.

    Same thing with the heat-wave we had earlier this summer. Not an air conditioner to be found within 25 miles. Two days later & free shipping, I am basking in the cool.

    Even on book purchases, even though I am like 99% e-book these days, but in the past the shipping & handling did make me hesitate before clicking and made me rethink the sale knowing that I could save 4.00 by simply by going to the B&N up the road. But there is something so seductive about no shipping costs and knowing you can still get it so quick. It does make you buy more.

    So yeah, I am a believer.

  2. library addict
    Nov 03, 2011 @ 12:33:17

    I have never sprung for the prime membership. With the $25 free shipping I am willing to wait the few extra days for my items.

    If Prime covered their sellers I would probably get it though. Most of the books I order from Amazon are used ones from their marketplace (or whatever it is called).

    I still get my subscription books in print from Harlequin, but bought a ton of Harlequin Treasury titles (about 80% of which I already own in print from back in the 80s/90s).

  3. Joy B
    Nov 03, 2011 @ 12:39:11

    If only Kindle read ePub….

    I love Prime. I got it when I needed rush shipping on a large item last year and meant to cancel but of course forgot. Since then I love the two-day shipping on almost anything I’ve wanted. In addition to the few print books I buy, it comes in handy when I’m really busy at work and don’t have time for basic shopping.

  4. Christine
    Nov 03, 2011 @ 12:50:55

    Chiming in to sing the praises of the prime membership. Amazon really knocked it out of the park with this. I cannot tell you how many things I have bought from Amazon in the past few years since getting the membership. It is also “shareable” with family who live at the same address.

    Whenever I am going to buy anything I check Amazon first. They also offer the choice of overnight shipping for $3.99 which is an incredible deal if you need something ASAP.

  5. Lynne Connolly
    Nov 03, 2011 @ 13:40:49

    Maybe this is the right place to announce that author Mlyn Hurn has died.
    She wrote some kick-ass books in the early days of Ellora’s Cave. I never knew her, just enjoyed her books, but please lift a glass to her tonight.
    Here’s the link to her EC books:
    http://www.jasminejade.com/m-87-mlyn-hurn.aspx

  6. Gwen Hayes
    Nov 03, 2011 @ 13:44:13

    I’m still confused about how to get my kindle book from lending library. Perhaps I’m having an off day. Are they all in one place? Do I have to get the book THROUGH my Kindle or can I get it online and send to my Kindle. Because I hate browsing on the device. And when you see a book that says “0.00 Prime” online, I see nothing to click for lending.

  7. Ktweedy
    Nov 03, 2011 @ 13:50:08

  8. DS
    Nov 03, 2011 @ 13:54:02

    Yes, Prime is the greatest thing since sliced bread. We have it for the business and it has reduced our mileage expense since we can now have supplies and equipment delivered rather than sending someone over to Office Depot. There’s also triple credit card points on our Amazon card for purchases. The free streaming is good entertainment when someone is working late or weekends.

    @library addict: While Prime doesn’t cover all sellers, several have their warehousing and shipping done by Amazon. Look for Fulfilled by Amazon for this deal. I always look for these books because they are covered by Prime and while the book may still be $4.00 instead of a penny plus $3.99 you still get 2 day shipping at no extra cost and sometimes the price of the book is as low as $2.60 with no extra cost for shipping.

    Sorry, I don’t know how the free shipping for $25 orders would factor in when it comes to fulfilled by Amazon purchases.

  9. Gwen Hayes
    Nov 03, 2011 @ 14:00:29

    @Ktweedy:

    Thank you…that was the page I saw earlier, but I was hoping their would be a centralized page online to actually check out the books instead of going through the device.

    It’s just…well…5156 books is a lot of pages to wade through on my ereader, ya know?

  10. Statch
    Nov 03, 2011 @ 14:09:35

    We became Prime members last summer, and our spending at Amazon has gone waaay up as a result. The Kindle Special Offers has also increased my spending there. I think Amazon is on the path to ruling the online world, and especially the ebook world. (Not sure I’m happy about that, but it is what it is.)

    I would love to see Harlequin offer an ‘ebook club’ through Amazon where for a monthly fee and purchase of a Kindle, you could read all the Harlequins you wanted. I bet that would be a good seller for Amazon (increasing the sales for Kindles) and for Harlequin.

  11. Brian
    Nov 03, 2011 @ 14:43:08

    @Gwen Hayes: There appears to be no centralized page that lists what’s available at this time. Give it a little time and if Amazon doesn’t do something I’d bet someone else will put something up unless it’s too hard to compile the data.

  12. Gwen Hayes
    Nov 03, 2011 @ 14:45:33

    @Brian:
    Good to know I wasn’t just unable to follow simple instructions. I’ll wait. *waits*

  13. Tina
    Nov 03, 2011 @ 15:25:40

    @Gwen Hayes:

    it looks you have to do it through the device only at this point. But you can narrow your options. When you’re in the Owners’ Lending Library page, up in the upper right corner is a link that says ‘View Subcategories within Owner’s Lending”

    If you click on that, it will break them down by genres/categories. In romance, there are 330 titles available currently.

    And then once you are in, say, the Romance subcategory, you can again click on a link in the upper right that says ‘View subcategories within Romance” and the titles are further categorized…Contemporary, Fantasy, Historical etc.

    Makes it a little easier. I haven’t so far seen a search function, though.

  14. Courtney Milan
    Nov 03, 2011 @ 15:49:58

    The reason I cancelled my Prime Membership is exactly the reasons people list for liking it. It just makes it so easy to spend money. It’s already too easy to spend money!

  15. Gwen Hayes
    Nov 03, 2011 @ 16:12:17

    @Courtney Milan: but you are more gooder than us.

    Okay–someone tell me about the Publisher’s Lunch article.

  16. Jane
    Nov 03, 2011 @ 16:58:31

    Someone on twitter is crowd sourcing the list.

    http://t.co/b7BiBgCj

  17. Nikki
    Nov 03, 2011 @ 22:15:39

    I have to be on the Prime love side. I started it because I found when I walked into the bookstore expecting to spend less than $10 I walked out with far more than the plan. So, I started pre-ordering authors who I definitely wanted books from. And suddenly, my yearly expenses went down because I didn’t face temptation regularly. Then I got the kindle, and all of my good intentions fell aside. Darn one-click.

    Once I moved to Manhattan and dropped the car, all of a sudden I couldn’t buy things in bulk and pop them in the car to carry up. So now Amazon ships everything. I realize they have their bad points but I love ordering and getting things within 1 or 2 days. The two day delivery has become a day or less than 24 hours sometimes. I love it!

    But that one-click. I am so weak.

  18. Tinabelle
    Nov 04, 2011 @ 09:59:34

    Another advantage of Amazon Prime is the free streaming of 1,000′s of movies and TV shows that you can watch on your computer, TV, or android device. I am eagerly anticipating the arrival of my new Kindle Fire and the access to this library.

  19. Tasha
    Nov 05, 2011 @ 03:03:15

    I also love Amazon Prime, and their free streaming library is a particularly good feature after Netflix screwed the pooch with their recent price increases.

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