Earlier this month, Amazon launched the Kindle Owners' Lending Library service which allows subscribers of Amazon Prime to borrow one virtual book a month for free, with no due dates. Customers can choose a book from a library of over 5,000 titles, including more than 100 current and former New York Times Bestsellers, and read them on their Kindle device.
"Titles in the Kindle Owners' Lending Library come from a range of publishers under a variety of terms," the company said. "For the vast majority of titles, Amazon has reached agreement with publishers to include titles for a fixed fee. In some cases, Amazon is purchasing a title each time it is borrowed by a reader under standard wholesale terms as a no-risk trial to demonstrate to publishers the incremental growth and revenue opportunity that this new service presents."
Literary agents quickly lashed out at Amazon over the new service, claiming that the agent and author community had not been consulted about "this new sort of use of authors' copyrighted material, and are unaware of how publishers plan on compensating authors for this sort of use of their books, which is unprecedented." They also stated that "free lending of authors' work as an incentive to purchase a device and/or participation in a program is not covered nor was anticipated in most contracts between authors and publishers."
Now The Authors Guild has stepped forward to vent its frustration over the virtual book lending, calling Amazon's new service a "mess." Even more, the Guild claims that the six largest U.S. trade book publishers were approached by Amazon earlier this year to participate in the program, but they all refused. The online retailer then attempted to enlist the next tier of U.S. trade book publishers, major publishers that are slightly smaller than the "Big Six," but most of these also refused to participate.
"No matter. Amazon simply disregarded these publishers’ wishes, and enrolled many of their titles in the program anyway," the Guild states. "Some of these publishers learned of Amazon’s unilateral decision as the first news stories about the program appeared. How can Amazon get away with this? By giving its boilerplate contract with these publishers a tortured reading."
"Amazon has decided that it doesn’t need the publishers’ permission, because, as Amazon apparently sees it, its contracts with these publishers merely require it to pay publishers the wholesale price of the books that Amazon Prime customers download," the Guild continues. "By reasoning this way, Amazon claims it can sell e-books at any price, even giving them away, so long as the publishers are paid. Amazon, in other words, appears to be boldly breaching its contracts with these publishers. This is an exercise of brute economic power. Amazon knows it can largely dictate terms to non-Big Six publishers, and it badly wanted to launch this program with some notable titles."
To read the entire rant from the Authors Guild, head here. As of this writing, Amazon has not released an official statement in regards to comments made by the writers and their agents.