Borrow to Buy: e-book equivalent of Rent to Own?

Borrow to Buy: e-book equivalent of Rent to Own?

An idea just occurred to me, which I think we may see widely implemented in a variety of ways.

My guess is that there has already been some thought of it in the places that would make it happen…it’s just not something that has been promoted yet.

The basic idea is this:

Make it super easy to start reading a book, so that people then discover the book that way and buy it.

I would say that many people, having gotten a few chapters into a book and who are finding it interesting, would then really want to finish it.

Let me give you one possible application.

I recently wrote about Kindle vending machines in a humor piece:

New menus at the Amazon Diner

I even suggested that you might be able to rent the Kindle that way.

Just a few days ago, in this

Wired article by Marcus Wohlsen

I read that Amazon had done exactly that (a Kindle vending machine) at CES (the Consumer Electronics Show).

They didn’t mention it for rentals, just for retail, but it does make sense.

Then, I was thinking about flights, and the impact Kindles have on airport bookstores.

I was thinking that there could be a rent and return system for Kindle vending machines. You would pay maybe five dollars to get the Kindle out of a machine in, say, New York, and return it to a machine in Los Angeles.

However…

What happens then to the book you started reading if you hadn’t finished it? You could temporarily register the device to your own account, but they’d have to be sure it got deregistered at the other end to  prevent serious consumer risk. They’d also have to wipe the devices (both of data and  hygienically, of course) each time.

This would appeal to people if they forgot their own device, if their device failed, or if they wanted to try out a Kindle (maybe a different model).

Would people pay $5 for it? What if it was free, and it didn’t need to be registered to their own account? That would really simplify things.

Who would pay for the devices?

Publishers…at least in part.

Let’s move this from the store to the airline.

You get on the plane. There is a Kindle in the seat pocket (it could be connected with a cable, although I think that’s probably not necessary).

The Kindle has some books on it. It could also have magazines/newspapers, although I don’t think that would work as well.

You can just pick the Kindle up and start reading on it.

During the flight, you don’t finish the book, although you find a book you like and get into it substantially.

At the end of the flight (or whenever you want), you can log into your own Amazon account and buy the book.

The Kindle automatically logs out of your account when it goes to sleep (that would be one of the few software innovations required here). You don’t need to be logged into the account to read the book, of course, because you aren’t reading your copy, you are reading the device’s.

Ideally, there would be some way to transfer your location in the book from the device to your account.

I think this could be a really good discovery method…something very important to publishers, and for which they are willing to pay.

It wouldn’t have to just be airlines: it could be hotels, even coffee shops. Perhaps public transit, for that matter. A forty-five minute train ride could be enough to hook you on a book.

Now, would some people read a whole book and not pay for it this way? Sure.

Would some people start a book and decide they don’t like it and not buy it? Yes, that’s possible, but you have seven days from purchase to return a Kindle book anyway*, so that doesn’t add a lot of risk, in my opinion.

I think this might work very well.

A similar idea for “Borrow to Buy” is expressed in this

Digital Book World article by Beth Bacon

It makes an interesting argument for public libraries becoming e-bookstores, and talks about what is already happening in that area.

Essentially, you might go to a library (or a library’s website), and want to borrow a book…but there is a long waiting list. You have the option to immediately get the book if you buy it.

That’s not exactly Borrow to Buy, but you could also do it where you have the option to buy the book when your loan is expiring.

One argument for it: if you buy the book, it could retain annotations you’ve made it: when you return it, it wouldn’t.

It think this idea of “Borrow to Buy” could really appeal to the tradpubs (traditional publishers). If you are getting on a plane, and it doesn’t cost you anything to do, I think you are much more likely to select a well-known book than to start with something of which you’ve never heard. Indies (independent publishers) can compete strongly on price: there would be no price competition here when you started to read. You would want something relatively safe (likely to be good, with decent proof-reading), because you don’t want to take a lot of time picking something.

Many people would want to start reading the book they heard about on the news, or for which they saw a full-page ad somewhere.

Why don’t I think magazines/newspapers would work as well?

I think you are less likely to be hooked part way through something in a magazine and have that emotional drive to finish it. You might read a great article and want to subscribe, but I think the pass-through rate on the sales would be a lot lower on that.

An obvious question: why wouldn’t you just read on your own Kindle?

There is that issue of lost/broken/not charged, or of wanting to try a different model…but this would also appeal because the books on it would be free (for the duration of your encounter). Maybe you normally wouldn’t pay $9.99 for a book, but you start reading it on the plane and get hooked.

What do you think? Am I missing any major barriers to this? Would this be something that would help tradpubs maintain market share? It seems to me that it benefits the tradpubs and the airline/hotel/restaurant/public transit agency significantly. I think it would help hardware manufacturers: I don’t think very many people would say, “I don’t have to buy my own Kindle because I can read one at Starbucks”…and the ones who do probably wouldn’t have bought one anyway. Feel free to tell me and my readers what you think by commenting on this post.

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This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

10 Responses to “Borrow to Buy: e-book equivalent of Rent to Own?”

  1. Edward Boyhan Says:

    Two of your recent posts (this one and the one outlining a Pandora-like subscription model) deal with possible new business models for the publishing industry. I think both are viable/possible developments. Neither of them are personally appealing to me for a variety of reasons.

    It seems to me that the whole wider publishing (books, music, movies) industries are evolving in response to changes wont by evolving technology. I feel like that we are entering a period of pause — a kind of stasis — and it’s hard to see what is going to happen going forward. The tradpubs are slowly beginning to try and figure out how to survive in an e-booked world (even as the pbook-to-ebook transition slows a bit.

    Devices are morphing too — it’s not clear to me whether dedicated reading devices have any viable long term life in the face of more general purpose tablet and smartphone devices (I find reading kindle books on my Nokia Lumia 920 smartphone to be quite pleasant). I’ve become a bit skeptical about the oft-stated “fact” that reading on reflective devices is superior to reading on emissive ones — there are lots of anecdotes, but I don’t think I’ve seen a single rigorous scientific study showing this to be true (my own experience suggest that both types have their places in different situations).

    I don’t know where we’ll go on from here, but I have a couple of preferences. It seems to me that current publishing business models put a lot of middle men in between authors and readers. This I think leads to about $0.85 of every dollar spent on a book going to an intermediary rather than to the author. A closer relationship between readers and author (prompted by technology advances such as ebooks) could lead to a win/win in which authors keep more of the pie while the price to the consumer overall is lower than it would be under a more traditional publishing business model (or of the many halfway steps such as yours currently being proposed).

    Another function of traditional publishing that I’d like to see changed is that of curation. Currently the editorial staff at most large publishers have a stranglehold on the spigot determining what gets published or not. Technology changes (and we certainly see this with indie publishing) remove many of these traditional barriers. It seems to me that many of the newer business model proposals coming from the tradpubs are attempts to reserve the curation function to themselves.

    I think society as a whole would be much better served (especially in the non-fiction arena) if the decision as to what gets published was determined by a wider pool of taste arbiters than the current (mostly NYC-based) editorial elites.

    • Bufo Calvin Says:

      Thanks for writing, Edward!

      My own guess is that we’ll continue to see a mix of business models for some time. Not every business model fits every situation: that’s why leasing cars, buying cars, and renting cars are all viable models.

      Fortunately, two of the big ones you mention (more director author to reader and broader curation) are already solidly here. That’s what happens with Kindle Direct Publishing. The market curates (pretty much), and author/publishers can get up to 70% royalties. For a $2.99 e-book, the author publisher can get 70% of the money the customer spends…I wasn’t sure if you were counting costs of production (which are also much lower, typically).

      Authors also sell directly from their own websites, but my guess is that’s a smaller market than KDP at this point (for e-books).

  2. rogerknights Says:

    Very good. It’s inspired me with a follow-on idea that I think has a lot of potential. If you like it, I’ll submit it to Amazon.

    Currently, Amazon allows customers to read, at no charge, the first 10% or so of its Kindle books. This was a slick and successful marketing move. I think it could be extended further, in works of fiction (but not short story collections), with even greater success. This next step would be to allow customers to buy the first 33% (say) of a novel for somewhere between $1 and $2. When they got to the end of it, clicking on a button would unlock the remainder of the book, which would already be present on the user’s device. What would this accomplish?

    1. Readers who wouldn’t have finished the book anyway, or who would have finished it mainly out of a sense of duty, will not feel they have wasted their money and time. This will, in the big picture, make them more enamored of future Kindle-book buying, because there will be less potential downside for them.

    2. Readers who would have returned the book won’t have to waste three minutes going through the return process, which is a bit of a hassle. And they won’t ever get caught in the annoying situation where they let the first week go by before they decide they should have returned it. (This can happen even to conscientious buyers, if they happen to order several books at one time (more than they can read within a week), which isn’t infrequent.) Again, the result would be greater customer satisfaction–and less inhibition about future book-buying.

    3. Price-sensitive readers will be tempted into nibbling at higher priced offerings, such as current best-sellers. Many toe-dippers into those best-sellers will be “hooked” when they get to the end of their Super Sample and will click on the Buy The Rest button. This will result in both greater user satisfaction (from reading a better class of novel) and greater revenue for authors, publishers, and retailers.

    4. Readers who choose not to buy will at least have gotten an inexpensive taste of what all the shouting is about and be knowledgeable enough about the author and book to offer an opinion in conversations at parties, etc. Result: more customer satisfaction and less inhibition about clicking on Amazon’s Download to Your Kindle button.

    Conceivably, readers might be offered an alternative, lower-cost Buy button at the end of the first third of the book. It would unlock only the next third of the book for another $1 to $2 (or maybe $2 to $3). This would be a way of gradually reeling in users who are either very price sensitive or “on the fence” as to how much they like the book.

    This innovation could be inexpensively tested in limited-scope experiments. Perhaps start with “thrillers,” which have a high potential for addiction. (Maybe Romance novels would be the next genre to experiment with.) There should be no reason not to do a pilot project soon, given the low cost and great potential upside.

    Caveat: This will involve renegoting tems with publishers—but since they should benefit from it (as a counter to low-cost Indie authors), they shouldn’t need much persuading—at least not to OK a pilot project. (And only a few publishers need be involved in the “thriller” test-run at first.)

    • Bufo Calvin Says:

      Thanks for writing, Roger!

      It’s an interesting idea, and you’ve clearly give it some thought.

      It’s a bit similar to Totalboox, which I wrote about here:

      https://ilmk.wordpress.com/2012/11/03/round-up-125-pay-by-the-page-zinio-on-the-kfhd/

      They are a complete “pay for what you read” model, which is different from yours. I think yours would be worth piloting, although my own feeling is that there is so much to read for free, that I’m not sure it would attract that many people. For me, that’s part of the attraction of “Borrow to Buy”…it starts out free, which appeals to people.🙂

      • rogerknights Says:

        It’s a bit similar to Totalboox, which I wrote about here: . . .

        “you put money on file. You download books, and you [are] only charged proportionately for what you read. If a book costs $9.99, and you read ten percent of it, you pay $0.99 (I assume they round up to a dollar). You never pay more than 100% of the price.”

        I’d forgotten about that. I think it would work too, although the accounting would be more complicated. But I think it would be less tempting to most casual, price-sensitive readers, because it requires an up-front payment and a money-reserve that would need to be continually refreshed.

        “my own feeling is that there is so much to read for free, that I’m not sure it would attract that many people.”

        And I think the temptation to get a low-cost ($1 or $2) peek at the content of current bestsellers that “people are talking about” would have substantial appeal. Fortunately, there’s an easy way to settle the issue of its potential popularity: a pilot project in some category of genre fiction, with the participation of just a few publishers.

        “For me, that’s part of the attraction of “Borrow to Buy”…it starts out free, which appeals to people. :)”

        I’m glad I waited for your response before sending my idea to Amazon. I’ll revise it to say that the consumer would be offered the 33%-for-$1-to-$2 option at the end of the Free Sample as well. (And I’ll mention why I think my idea is better than Totalboox’s.)

      • Bufo Calvin Says:

        Thanks for writing, Roger!

        I agree: a pilot makes sense. It might appeal to some people, as you suggest.

        My thought is just someone weighing $1 for part of a popular book versus, say, $0.99 for a well-reviewed but not well-known book. They’d also have to see the advantage of paying that $1 over getting the free sample. Some publishers have done substantial samples of upcoming brand name books (separate from Amazon’s standard), but those have also been free.

        It would be interesting to see the results of trials…I’m not against the idea, just thinking about the hurdles.

      • rogerknights Says:

        They’d also have to see the advantage of paying that $1 over getting the free sample.

        But they could get the free sample AND THEN, at its end, have the option of paying $1 for the next 23% (as I mentioned).

        Some publishers have done substantial samples of upcoming brand name books (separate from Amazon’s standard), but those have also been free.

        Thanks for mentioning that—it’s another thing I’d forgotten about. What have the results been (if the publishers have revealed them)? I don’t think that poor results for them would translate into poor results for Amazon, necessarily, because publishers’ sites aren’t much visited by price-sensitive casual readers.

        It would be interesting to see the results of trials … I’m not against the idea, just thinking about the hurdles.

        Being willing to be guided by experience (in the form of experimentation) is underutilized in business (and academia and politics and everything else). In this instance, I think the potential payoff is enormous, so the hurdles shouldn’t be a deterrent.

        Speaking of the payoff: Eventually, Amazon is going to want to tilt the incentives in favor of books it can make money on, as opposed to low-cost Indies. (Incentivizing low-cost Indies was, IMO, a temporary tactic it used to undermine the appeal of competitors like the Nook—a tactic that is no longer necessary.) Allowing low-cost nibbles of full-priced books would be a great way to partially implement this turnaround, because it wouldn’t directly step on anyone’s toes.

        (If Amazon does implement this, I think that it should try to work the word “nibble” into its pitch for the method. “Knibble”? “Kinibble”)

      • Bufo Calvin Says:

        Thanks for writing, Harold!

        So, the idea is that I’ve read ten percent of the book, and then commonly don’t know if I want to buy it…so I’ll spend a dollar to find out more? That might appeal to some people…I don’t think I’d be one of them. If I’ve read the sample, I know whether or not I want the book.

        Amazon generally doesn’t release sales figures for individual books to the public. I did a quick search for “Free Preview” and found 117 results:

        Free Previews in the USA Kindle store
        at AmazonSmile

        It looks like the top ones are in the top couple of hundred of sellers in the Kindle store, which is pretty good.

        Actually, I don’t think Amazon ever has to change to an e-book model that directly makes them money…if having e-books creates “inspired sales”, in particular, through Prime.

      • rogerknights Says:

        Actually, I don’t think Amazon ever has to change to an e-book model that directly makes them money . . .

        Well, surely in five years’ time, max, Amazon or its stockholders will get tired of losing as much money as they are doing on e-Books.

        …if having e-books creates “inspired sales”, in particular, through Prime.

        But not many price-sensitive “buyers” of $1 or $0 books are good candidates for signing up for Prime, IMO.

      • Bufo Calvin Says:

        Thanks for writing, Roger!

        Investors haven’t gotten tired of it in the past twenty years.😉 Of course, that wasn’t e-books, in the beginning.

        If losing money on some e-books gets people to spend a lot of money on other things, that’s a net positive, and investors can see that. Would an investor say to a restaurant, “Do you know how much money you are losing giving away glasses of water? Water bill, electricity for the ice maker, wages for the server and the clearer…you need to start charging a buck a glass, or you are going down.” E-books may be, to some extent, that free glass of water for Amazon.

        Good point on the price sensitive customers and Prime…

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