NEW YORK (MainStreet) — Voracious readers may soon have a new way to get their fix as Amazon (Stock Quote: AMZN) is rumored to be launching an e-book rental service similar to what Netflix has done for movies, The Wall Street Journal reports, but just how much this kind of service should cost remains a matter of debate.
According to the Journal, the digital book rental option would most likely feature older works and be offered as part of Amazon Prime, a $79-a-year service that provides users with free two-day shipping and instant movie streaming. If the book rentals prove popular, analysts say other companies could follow suit, raising the issue of what pricing model would entice consumers and publishers to sign up.
“It will depend on the success Amazon has. If the Kindle tablet takes off, coupled with this service, then Apple will have no choice but to respond,” says Rob Enderle, principle analyst for the Enderle Group, referring to the tablet Amazon is also rumored to be working on. Enderle predicts that Barnes & Noble (Stock Quote: BKS) may decide to dabble in book rentals as well and says he’s surprised they haven’t tried to do so already.
While Amazon can use the service as a value-add to incentivize consumers to sign up for their $79 premier plan, Enderle suggests that other companies might choose to market it as a stand-alone feature whose price essentially matches the $7.99 Netflix charges to stream unlimited movies every month. For this price, he expects that Amazon customers would be able to rent a large number of e-books on their Kindles at any given time and would have access to those books until they return them or cancel their membership.
“I do expect it will be probably closer to the streaming model for Netflix,” Enderle says. “Most folks can’t consume more than a few books a month, but if you get a power reader, it’s like the heavy guy who goes into the all-you-can-eat buffet and makes up somewhat for all the light eaters.”