Amazon's Russ Grandinetti Tries to Brush Off Publishers' Concerns at Digital Book World Conference
On a more somber note, Grandetti put Amazon's pricing strategy into context. "In a digital connected world the degree to which books compete with other media is only increasing. We are competing more and more for readers' attention and that is not going away." But Grandinetti offered no solution to this issue, which perhaps is more of an issue for book-centric publishers than The Everything Store.
Subscription models also garnered significant attention during the Q&A and Shatzkin asked whether subscription will ever come to dominate Amazon's retail channel? "It's interesting," said Grandinetti. "In every digital media category subscription is playing a major role -- musics, movies, TV. I don't think books will be immune to this. But the difference is that unlike other industries our a la carte sales are still healthy. We're still getting readers to pay for individual books. So we need to structure it for the right customer, at the right time, and with the right publisher so that it grows the business."
When asked if Kindle Unlimited was growing Amazon's business, Gradinetti didn't have a definitive answer due to the newness of the program. He said that Amazon has observed that Kindle Unlimited subscribers tend to read more frequently the longer they use the subscription service. "Their reading frequency jumps 40% in the 60 days after joining," said Grandinetti, "and the total dollars spent by that group in a la carte purchases and subscription is up 25%"
Grandinetti believes there could be a viable model for subscription that operates similarly to publishers' current hardback and paperback release model. "Most people don't questions that doing both a paperback and hardback release can generate greater revenue for authors and publishers over the lifetime of the book. I think subscription will be another choice for publishers to consider as part of the life of the book."