Yesterday as I listened on the radio to NPR’s report on the “wild frontier of e-books” I connected the concept of public goods as introduced in Chapter 12 of the text. As reported by Lynn Neary in her piece, Kindle Offers Lending Library to Customers, Amazon is treading new waters in an effort to sell more Kindles – which in turn is designed to sell more books. In short, Amazon has created a lending library of books, available to Amazon Prime members for two weeks for free. Members can read (and perhaps in many cases just review and consider a purchase) books by authors and publishers without their permission. This is similar to the example given by Dr. Tufte in his lecture on externalities. Dr. Tufte instructed that individuals taking music from their MP3 players and uploading it are attempting to make a public good without the permission of the producers. The same is now happening on a much larger scale and not for the little savings of a few friends, but for the greater profits of Amazon.
In a type of follow-up report just today, NPR reported that Amazon is actually selling the Kindle Fire at a loss. Obviously there is more to Amazon selling the Kindle Fire at a loss so Prime members can access the lending library for free (perhaps a further loss). The lending library gives Amazons’ customers more exposure to books, that can subsequently be purchased, than they might otherwise get without a free look. However, authors and publishers are mad when they find out their books are included in the lending library without their permission. Author Robert Goolrick testifies that his new book "A Reliable Wife" would never ever have become a best seller without the support and hand-selling of independent book sellers. He says anything that weakens independent book sellers weakens the entire literary discourse in the country and he is all for a healthy and vibrant literary discourse. Additionally, author Brian DeFiore contends that giving away someone's creative work as an incentive to buy some other service or product – whether it's legal or not – certainly feels problematic. While Amazon might counter that exposure will ultimately drive book sales, which is good for both them and the authors and publishers, the concept of expanding these creative works into the realm of public good through a free lending library may become a disincentive to authors. In the meanwhile, Amazon's market dominance allows it to forge ahead without the need for consensus from its content suppliers.