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Amazon moves toward "a Netflix for books"

Amazon is in talks with publishers to create an e-book service that would let customers pay to rent books, just the way they now do movies.

By Husna HaqCorrespondent / September 12, 2011

Amazon is busy ramping up digital offerings to offer customers on its newest tablet – an iPad rival expected to launch by the end of this year.

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If Amazon is successful, you will be renting more than just movies and games.

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The online books retailer is in talks with book publishers to launch a Netflix-like service for e-books enabling customers access to a library of digital books for an annual fee, according to a story first reported by The Wall Street Journal.

According to the Journal, Amazon is in the early stages of putting together a digital book library featuring mostly older titles. The subscription library service would be available to Amazon Prime members, who pay $79 per year for online video and unlimited two-day shipping.

The only problem? Publishers aren’t thrilled about the digital-book-rental idea. Several publishing executives have expressed concern that a "Netflix for books" could lower the value of books and strain their relationship with other book retailers.

“Publishing executives would rather have people buy their books, and they are concerned that participating in the program could create the impression among consumers that books have little inherent real value,” The Wall Street Journal reported early Monday.

“What it would do is downgrade the value of the book business,” one publishing executive told the Journal.

One reason why Amazon is pursuing the proposal: The mega-books retailer is ramping up digital offerings to offer customers on its newest tablet, expected to rival Apple’s iPad and launch by year’s end. We’ll likely see more such offerings as retailers look for ways to deliver content digitally as consumers increasingly move to computers, tablets, and other electronic devices.

To assuage publishers’ concerns, Amazon would offer book publishers a hefty fee for participating in the program, as well as limit the amount of books that customers could read for free each month. Additionally, publishers may insist on a delay in digital availability of new releases for rental, in order to encourage more traditional book sales.

For years, movie studios have begrudged the business Netflix takes from them and are in a series of negotiations with the movie rental business to protect their profits. As it moves forward with the books subscription service, Amazon, which is no stranger to controversial book retailing practices, is likely to dive into a sea of ever-more complex relationships with book publishers. Stay tuned.

Husna Haq is a Monitor correspondent.

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