This fall Amazon announced it would begin a library lending program for many ebooks, allowing Kindle owners who subscribe to Prime to read one book at a time for free, with no due dates, up to a maximum of one title per month. This came just a few months after Prime members gained streaming access to many movies and television programs in Amazon’s cloud library for no additional fee.
It also came close on the heels of price drops for existing Kindle models and the introduction of the Kindle Fire tablet as well as a touchscreen Kindle ereader.
“Amazon’s ebook lending initiative underscores the benefits of a strategy that includes hardware, software and content,” said eMarketer senior analyst Paul Verna. “Companies that are in a position to leverage these assets—including Amazon, Apple and Sony—have bargaining power with partners and business advantages over competitors. Just as importantly, these horizontally oriented firms have the luxury of using their products and services symbiotically.”
Research from Harris Interactive has found that ereader owners purchase more books on average each year than those who stick only with traditional books—unsurprising, considering lighter readers would be less likely to invest in such a device to begin with.
But Harris also found that purchasing an ereader encouraged owners to increase their reading habits: owners were more than twice as likely as non-owners to say they were reading more in the past six months than they had been before when they were surveyed in July. On the flip side, non-owners were more apt to be reading even less.
As Amazon cuts hardware prices while at the same time making its content more attractive, it hopes to lock in customers—and some marketers are already a part of those efforts. The Kindle with Special Offers makes a clear value proposition to consumers: a discounted device price in exchange for non-intrusive, potentially valuable advertisements.
“The success of the Kindle with Special Offers proved there’s an important place for marketers in a space otherwise fueled by paid content,” said Verna. “The Kindle Touch, with its attractive price point and touch-screen interface, will further expand these opportunities. Similarly, the Kindle Fire’s color display and Android operating system will provide new ways for marketers to participate in the Kindle ecosystem.”
eMarketer expects that by the end of this year, 33.3 million adults, or 14% of the population, will use an ereader. By 2015, that share will reach 22%.