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Amazon introduced a $9.99- a-month service for unlimited Kindle e-book downloads, letting customers devour books like they binge on TV services like Netflix and Amazon Prime.
Kindle Unlimited includes more than 600,000 Kindle books and thousands of audiobooks from Audible Inc., Amazon said today in a statement. Readers can access titles like "The Hunger Games" and "Lord of the Rings" without paying for them individually.
The plan presents a more affordable option for heavy readers, following the model Amazon and rivals such as Hulu are using to change how viewers consume TV. Kindle Unlimited could be generating about $1 billion revenue in five years, Gene Munster, an analyst at Piper Jaffray Cos., wrote in a research note before the service was officially announced.
"This program would be a step towards bringing consumers into the Amazon content subscription ecosystem," wrote Mr. Munster, who rates the shares overweight.
Amazon is putting a new twist on its e-book model in the midst of a high-profile battle with publishers for a greater share of income from e-books. The world's biggest online retailer is locked in a dispute with Hachette Book Group and has blocked pre-orders for some of the publisher's titles to gain leverage in the negotiations.
While physical book sales in the U.S. are projected to fall to $19.5 billion this year from $26 billion in 2010, e-book revenue is anticipated to jump more than eightfold to $8.7 billion, according to Forrester Research. The growth is being spurred by the increasing consumer use of tablets and smartphones, through which people read e-books.
The number of e-book readers has steadily grown, with 28% of American adults reporting to have consumed at least one digital book in the previous 12 months, according to a Pew Research Center study published in January. That was up from 17% in 2011. Adult Americans read an average of 12 books all or part of the way through, in line with previous years, the survey said.
Print books still dominate, with 69% of Americans having read at least one in the previous 12 months.
Kindle Unlimited isn't the first of its kind. A New York startup, Oyster, offers access to more than 500,000 books for $9.95 a month. Scribd Inc.'s service has more than 400,000 titles for $8.99 a month.