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Old 02-04-2011, 10:58 AM   #28
Andrew H.
Grand Master of Flowers
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Posts: 2,201
Karma: 8389072
Join Date: Oct 2010
Location: Naptown
Device: Kindle PW, Kindle 3 (aka Keyboard), iPhone, iPad 3 (not for reading)
Instead of Netflix, I think that the model you should look at is the audible model.
Don't offer every book; offer, say 5,000 (or 10,000; I don't know) carefully selected books that are popular and cross genres. (But make sure you have complete series).

Maybe you charge $15.95/month to be able to download two books/month, and $20.95/month for three. (This would be at a 20% and 30% discount from a nominal $10 price). People would be able to keep the books (it's much simpler that way, and I think people want to keep books). You can earn extra revenue by selling books to members (at a discount) or to non-members (for more, but really as a way to get subscribers).

The biggest problem with the business plan, of course, is that selling books has a razor thin margin, and you are competing directly against Amazon's and B&N's existing model. If you can't beat Amazon's price, selection, or convenience (and I'm not at all sure that anyone can), how will you make any money. (Note that the agency agreement prevents publishers selling through any competitor at a lower price than they sell through Amazon).

Note that pricing is the issue: it's easy to make any business plan work if you can make up the prices - i.e, it's easy to compete against Amazon on paper by coming up with a plan to sell bestsellers at $1 apiece. But of course Amazon spends huge amounts of time making sure that they price as low as possible.

I'm not sure where you are in your project, but if you have time to come up with a new business plan, I would try to make one that doesn't compete so directly with Amazon in their core market
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