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Amazon Planning 'Netflix for Books'

Also in talks to gather content for upcoming tablet
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Amazon has been keeping busy during the long summer lull, preparing for the launch of its upcoming tablet and pitching a new digital book service that would allow premium customers to “rent” e-books for free.

The online retailer is in talks with book publishers to launch its own Netflix-like digital book service, sources told The Wall Street Journal. The e-retailer is supposedly in the midst of putting together a digital library of older titles, which it plans to offer (with limitations) to subscribers of Amazon Prime, the $79 a month service that already provides access to the site’s premium video content, in addition to unlimited two-day shipping.

So far, it’s unclear whether any publishers have actually signed on. Amazon is planning to offer them a “substantial fee” for participating in the book program, sources said, but some publishers aren’t too fond of the proposal. They fear that the digital book service could strain their relationships with other retailers, and may cause consumers believe that books have “little inherent real value,” according to the WSJ—or, as one publishing executive put it, “What it would do is downgrade the value of the book business.”

Meanwhile, the Amazon is also on the hunt for content for its upcoming tablet computer. The WSJ is reporting that Amazon has contacted magazine and newspaper publishers to discuss new terms for subscriptions and single copies of periodicals for the device.

Sources said the terms would be “in the ballpark” as what Apple currently offers, but that some Amazon execs have also suggested that they might be willing to cut publishers a better deal—although there's no word yet as to whether Amazon will be willing to provide the publishers with information about the tablet’s customers, which has been a major point of contention with Apple.

The Amazon tablet, which will be smaller than Apple’s iPad, is expected to be released later this year and will also be integrated with Apple’s digital video service, sources said.