Is the Amazon Gorilla Heavy Enough to Win This One?

I would imagine that the Kindle Lending Library is probably already the largest "public" library in the world as measured by number of patrons.  If not, surely it will be soon.  After all, membership is open to anyone owning a Kindle and a membership in what Amazon calls its "Amazon Prime" program.  That program, as most of you know, sells for $79 per year and guarantees free postage on all qualifying items purchased from Amazon (plus access to a substantial number of streamed movies, documentaries, and television programs at no additional charge).  The kicker, for me, has been that items purchased via Amazon from third-party companies are not "qualifying items"; instead, such sales are subject to shipping charges.  Historically, third-party vendor purchases make up about 50% of my Amazon purchases, meaning that the Prime program is uneconomic for me.

Publishers, especially the big six (Hachette, HarperCollins, MacMillan, Penguin Group, Random House, and Simon & Schuster), wanted no part of Amazon's lending library idea.  Numerous "second tier" publishers had the same reaction.  Amazon, like most 800-pound gorillas in the room, did not pay much attention to the outcry and decided, instead, to include many titles from some of the publishers that protested the entire concept.

Now, according to the Guardian, U.S. authors and their agents are becoming vocal about the situation:

Now authors themselves have also moved to criticise it, with US writers' body the Authors Guild describing it as a "mess", asking if any of the books in the programme are there legitimately and accusing Amazon of launching it to push the Kindle Fire as it fights an "unexpected ebook device battle" with Apple and Barnes & Noble.

And this is from the Association of Authors' Representatives website:

“The agent and author community have not been consulted about this new sort of use of authors’ copyrighted material, and are unaware of how publishers plan on compensating authors for this sort of use of their books, which is unprecedented. But we think free lending of authors’ work as an incentive to purchase a device and/or participation in a program is not covered nor was anticipated in most contracts between authors and publishers—nor do most contracts have any stipulation for how an author would be compensated for such a use. Without a clear contractual understanding with their authors, it is unclear to us how publishers can participate in this program. We take very seriously our role to protect the interests of our clients, and at this stage it is difficult to see how this program is in the best interests of our clients.”

Looks like this battle is just beginning.  It will be interesting to see whether Amazon can bully its way through this mess or whether it will be forced to modify its contractual terms (most likely at a big hit to its bottom line) with authors and publishers.