Amazon Is Happy To Give You This catalogue

Estimated Kindle Sales

Photo: news reports, company releases, BI Intelligence estimates

Amazon has announced that ebooks of Harry Potter will join its Kindle lending library. Lending Library is a program that lets people who are Kindle owners and Amazon Prime subscribers read (“loan”) ebooks for free. (And Amazon Prime is Amazon’s two-day free shipping program, which also includes its streaming TV shows and movies service.)Amazon purchased an exclusive licence from Pottermore, J.K. Rowling’s Harry Potter portal. Although the terms were not disclosed, it’s hard to imagine the price tag wasn’t steep.

In other words, Amazon keeps investing in turning the Kindle platform into a catalogue to drive more digital media and commerce sales. 

Amazon probably loses money on Kindle sales to hook consumers into not just its media ecosystem but also its commerce offerings, like mail-order firms that bulk-send catalogues for free.

Shopping on Amazon has a certain addictive quality, especially with one-click and with a Prime membership that means things you buy show up on your doorstep two days later. It seems hard to understate the lifetime value of a consumer with a Kindle and an Amazon Prime membership. (This is before you account for digital media sales, app sales and advertising, which as we noted is a large opportunity for Amazon.)

The Harry Potter investment (on top of being a nice publicity coup, which is valuable in itself) is therefore a great move forward in Amazon’s Kindle strategy.

Click here for our latest note on how the Kindle ecosystem is doing →

Click here for our primer on Kindle economics →

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