Amazon’s launch of Kindle FreeTime Unlimited, announced earlier this week, could change the way e-books are distributed to consumers. But the new subscription service, which is targeted at kids between ages three and eight and offers access to books, games, movies, TV shows and educational apps, raises questions and red flags for the publishing industry.
Andrews McMeel is one publisher providing select titles from its AMP! Comics for Kids imprint, including Big Nate books. “It’s a safe environment for kids and families to access digital content and a good way for us to build awareness for our brands,” says Kirsty Melville, president and publisher of AM’s book division. “We learn things every time we partner with different distribution models. Lots of people are trying to reach kids as they get more access to digital devices, and this is an interesting opportunity to explore a new way to give kids access to our content and see what happens.”
Chronicle Books is offering selected Ivy & Bean early chapter books, as well as backlist titles by Bob Barner. “We viewed it as a really great opportunity to extend the reach of Ivy & Bean and maybe bring in new readers, and to inject new life into Bob Barner’s backlist sales, which consistently perform well for us,” says Ginee Seo, children’s publishing director.
Other publishers that have been announced as part of the program include Houghton Mifflin Harcourt (with content including Jumanji, The Red Book, and Curious George) and DC Comics.
Despite the perceived marketing benefit and opportunity to learn about the digital space, many publishers, authors, and agents have been reluctant to authorize the use of their content for subscription services, and many are taking a wait-and-see attitude toward the Amazon venture. One reason is that they believe subscription models could cannibalize more lucrative sales of individual e-books.
One publishing executive not involved with the Amazon program pointed out that internal and external studies have shown that consumers will not convert from free or cheap (as in a subscription model) to paid or higher price points. “Not sure what the win is here,” the executive told PW. “But I’m willing to watch and learn.”
Amazon’s compensation model to content providers isn’t yet clear (publishers declined to comment). Do participating publishers receive a percentage of the subscription fee, a flat fee per use of their specific content, or some other payment? FreeTime Unlimited costs $2.99 per month per child and $6.99 per family for Amazon Prime members and $4.99 and $9.99, respectively, for non-members. The fee, which covers unlimited usage of all content, compares to a typical price of about $4.99 for each e-book in a standard pay-to-own model.
In April 2012, Ruckus Media Group launched the Ruckus Reader, an app that distributes Ruckus content, as well some content from outside publishers such as Houghton Mifflin Harcourt. Initially, the company intended the Ruckus Reader to offer videos, e-books, and proprietary iReader interactive titles both on a fee-per-purchase basis, for individual titles, and by subscription, for unlimited usage.
“We abandoned the subscription model,” Ruckus founder Rick Richter explains. “You have to have a very robust amount of IP to rationalize it, and securing rights from publishers for a subscription service just seemed like a bridge too far.”
It remains to be seen whether most of the largest publishers, who have largely avoided subscription services to date, will become involved in Amazon’s initiative, and to what extent. “If major publishers partner with Amazon, it will be a real game changer,” Richter says. “Even if the majors are not involved, it’s still a major shift. It’s not like Amazon is a fringe player.” If this venture is successful, other players, such as Apple and Barnes & Noble, are likely to set up similar services, and the impact will extend past children’s content to adult titles.
E-books, with more than 1,000 titles available, are central to FreeTime Unlimited, which is an update to Amazon’s Kindle FreeTime parental-control service. Other content ranges from educational apps and games to movies and TV shows, acquired from entertainment-industry partners including Disney, Nickelodeon, Sesame Workshop, and HIT Entertainment. Some of these companies retain distribution rights for e-books based on their properties; HIT, Sesame Workshop, and PBS Kids are among those offering e-books through Amazon’s service, along with gaming apps and TV episodes or films.
