“We are always looking at ways to improve the shopping experience for our customers,” an Amazon spokeswoman told me. “We are testing a monthly Prime subscription.”

Amazon Prime gives members free two-day shipping, free streaming of about 25,000 movies and TV shows, and access to the Kindle Owners’ Lending Library. (Prime members who own a Kindle can borrow one book for free per month, from a selection of mostly self-published titles.) The new option is geared toward users who don’t already have Prime memberships and who might be more interested in the movies and TV than the other services.

The option appears to only be available to some users for now, and if you go to the Prime signup page, you may not even see it as an option. I was able to recreate the $7.99/month offer on my own computer, but it took a little doing. I’m an annual Prime member, and when I signed out of my account and checked the Prime options again, I was still pitched the $79/year option. When I switched browsers, though, I saw a screen with the $7.99/month option.

via Hacking Netflix

Amazon launched KOLL in the United States last November with a library of about 5,000 traditionally published titles — some of which weren’t included with the publishers’ permission but, rather, were purchased by Amazon at the wholesale price each time a user borrowed one. This caused a controversy that has since subsided as KOLL has primarily become a vehicle for self-published authors to promote their books: Amazon opened it up to self-published authors in December 2011 through a program called KDP Select, and the library now contains over 200,000 titles, nearly all of them self-published. Authors are paid out of a fund each time their ebook is borrowed. (In exchange for including books in the KOLL, self-published authors must sell them exclusively through Kindle for a period of at least 90 days.) All seven Harry Potter ebooks are also available through the KOLL in English, French, Italian, German and Spanish.

It is unclear how many people in Europe will be eligible to borrow ebooks from the KOLL. Amazon has not released Prime membership numbers in any country, but it seems safe to assume that there are fewer members of “Amazon Premium” in the UK, France or Germany than there are in the United States, and fewer still who own a Kindle. But the expansion of the Kindle Owners’ Lending Library to Europe comes at a time when Amazon is heavily promoting its self-publishing capabilities on the continent. At the Frankfurt Book Fair this week, Amazon has been holding daily sessions for international audiences about how to self-publish their books on Kindle.

In the press release announcing the expansion to Europe, Amazon said it is increasing the pool of money that self-published authors are paid from to $700,000 for October, from $600,000 last month, and “a larger increase anticipated in November.” The company says “in September, authors earned $2.29 per borrow, which is more than many KDP books earn per sale.” (Of course, not all books are borrowed even one time.)

Amazon also says that “in September, KDP Select books that enrolled in August earned 77% more royalties from paid sales than the three months before they were enrolled in the program.  This figure is conservative and only includes books that were available via KDP for the entire three months prior to enrolling in KDP Select.”

“It’s really about low-cost shipping, but why is video in there? It’s kind of a confusing mess.”

Hastings has in the past dismissed Amazon’s video subscription efforts as well, and tends to point instead to HBO and its HBO Go service as its real competitors. That’s despite the fact that Amazon has been ramping up its content library in recent months. Earlier this month, Amazon singned a deal with Epix that will give its subscribers access to the Hunger Games, Avengers and other movies previously exclusive to Netflix.

There have been rumors in the past that Amazon would spin off its video service from Prime to turn it into a full-blown Netflix competitor, but the company has repeatedly denied any such plans.

Monday morning’s release comes ahead of next week’s Amazon press event, where it is widely believed that Amazon will announce a new Kindle Fire and Kindle e-reader. The Kindle Fire comes with a free one-month trial of Amazon Prime.

The main announcement Monday is that the company “now ships more items with Prime Free Two-Day Shipping than with Free Super Saver Shipping — the program Amazon launched in 2002 that offers free shipping on orders over $25.” That isn’t particularly surprising because households with Prime tend to order a lot more stuff. Macquarie analyst Ben Schachter did a self-analysis last year and found his household placed seven times more Amazon orders after switching to Prime.

Most people with Prime would probably report a similar experience. After I switched to Amazon Prime, I started ordering nearly all of our household items from the service. The last five items I ordered were a dress, tights, a baby gift, an iPad case and Swiffer Dusters.

Analysts have tried to guess how many members Prime has. In February, Bloomberg released a super-sketchy report citing “people familiar with the matter” who say it has between three and five million members. Last November, Piper Jaffray analyst Gene Munster estimated Prime would have 10 million members by the end of 2011. Again, Amazon hasn’t released any official data.

Here are some other tidbits from the release:

• Top four items ordered with Prime: 1) Kindle Fire; 2) $79 (basic, non-touchscreen, ad-supported) Kindle; 3) Kindle Touch (they don’t specify if it’s the ad-supported model or not); 4) Fifty Shades of Grey.
• “Amazon Prime now features more than 15 million unique items.”
• The Prime Instant Video catalog, which offers free streaming to members, contains 22,000 movies and TV episodes. The most-watched TV show is “Downton Abbey, Season 1″ and the most-watched movie is the Swedish version of “The Girl with the Dragon Tattoo.”
  
• The Kindle Owners’ Lending Library, which lets Prime members borrow one ebook for free each month, now offers more than 180,000 books. Amazon cites bestsellers like “The Hunger Games” and Harry Potter, but the vast majority of titles in the KOLL are self-published.
• Totally my favorite: “Amazon Prime members could order 500 different items with Prime Free Two-Day Shipping every day of their lives and still not order every Prime item.” In other words, you could order 500 items every day for 82 years.
• Amazon Prime’s annual price, $79, hasn’t changed since it was launched seven years ago. I suspect many Prime members wouldn’t be bothered by a price hike — to, say, $99 — but the press release does not make it sound as if Amazon is considering that.

New shows include seasons of Friday Night Lights, Parks and Recreation, Parenthood, Heroes, Battlestar Galactica and others.

“We look forward to further expanding NBCU’s content offering available to Prime subscribers in the near future,” said NBCU’s Frances Manfredi.

Counting the new shows, Prime Instant Video now offers 22,000 movies and TV episodes free to Prime members, who pay $79 a year for free two-day shipping and other perks. As of April, Netflix had over 60,000 streaming titles (but it still doesn’t have the third season of “Parenthood” — and now Amazon does).

Amazon reported $12.83 billion in revenue, up 29 percent over last year and falling slightly below estimates of $12.9 billion. Operating income was $107 million, down 47 percent over last year.

Investors have been concerned about the cost of Amazon Prime, which — as Jeff Bezos claims in the press release — “is now the best bargain in the history of shopping,” its price of $79 unchanged since it was introduced seven years ago. (Does that mean we can expect a price hike sometime soon?) Amazon Prime, which offers members free two-day shipping on 15 million items, now also includes access to 18,000 streaming movies and TV episodes and 170,000 ebooks in the Kindle Owners’ Lending Library.

Amazon’s third-quarter guidance projects an operating loss between $350 million and $50 million. The company is expected to introduce up to six new tablets this fall and is rumored to be developing a smartphone. CFO Tom Szkutak said in an investor call following the earnings report that mobile is seeing “strong tailwinds…that we expect will continue.”

Amazon says the Kindle Fire is still its #1 bestselling product and that the top 10 bestselling items in the quarter were “digital products — Kindle, Kindle books, and accessories.” (That’s up from 9 out of 10 last quarter.) As usual, the company shared no actual sales numbers in its release.

release

The Seattle-based online retailing giant on Friday announced a licensing deal with Warner Domestic Television to bring an unspecified number of Warner Bros.-produced shows to its subscription streaming video services.

Also read: Amazon adds depth to Prime with MGM deal

Three other series were noted in the deal: Dark Blue, Alcatraz and The Whole Truth.

Both The West Wing (an Aaron Sorkin-penned political drama starring Martin Sheen) and Fringe (a Fox sci-fi/fantasy series) will be available exclusively this summer, at least in terms of streaming, to Prime members and purchasers of Amazon’s Kindle Fire tablet.

“Bringing Fringe and The West Wing – two shows with a devoted fan base — to Prime Instant Video first, is another way for us to add value for Prime members and to continue to give customers content they love,” said Brad Beale, director of digital video content acquisition for Amazon.

With the deal, Amazon now has arrangements with every major supplier in Hollywood and now touts a Prime library of more than 18,000 movies and TV shows.

Also read: MGM adds Rocky, Terminator, 600 titles to YouTube catalog

The agreement with MGM, holder of one of Hollywood’s most valuable libraries of older movies and TV shows, increases Amazon’s streaming catalog depth to about 18,000 films and episodes — not quite at the level of Netflix’s 60,000, but growing fast.

The MGM deal adds well-known film titles including Dances With Wolves, Silence of the Lambs, Rain Man and The Terminator. As important, it bolsters Prime’s depth in the area of TV re-runs, which has been a key selling point for rival Netflix.

TV series added to the mix include ABC’s ’80s-era baby-boomer classic Thirtysomething, Showtime series Dead Like Me and syndicated action hours Stargate Atlantis and Stargate Universe.

For now, Amazon’s subscription instant video service remains an add-on feature for those who pay $79 year for the online retailer’s Prime offering, which gives customers free shipping on merchandise.

But Amazon is reportedly interested in opening up the service to non-Prime members, and more effectively using its streaming business to support sales of its Kindle Fire tablet. Building out a robust programming library is key part of that process.

With a deal announced two weeks ago to stream films from Paramount Pictures, Amazon has now licensed programming from each of Hollywood’s major studios.

Self-published authors can already sell their e-books on Amazon’s international sites when they use KDP (Kindle Direct Publishing). Now, when authors upload those books to Amazon’s free print publishing tool, CreateSpace, Amazon will distribute the books to Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.es and Amazon.it.

When consumers in those countries (or in the U.S.) order a CreateSpace book, Amazon prints it on demand. The books are available for same-day shipping and eligible for free shipping and Amazon Prime. (Amazon Prime, which offers unlimited free two-day shipping for a yearly fee, is available in the U.S. and UK and in Germany, France, Italy and Spain as “Amazon Premium.”)

Using CreateSpace is free, but an author’s royalty payment depends on factors like page count and color.

The books still won’t be in European bricks-and-mortar stores

Authors who distribute their books internationally through CreateSpace are only distributing them through Amazon sites. The books won’t appear on the shelves of European bricks-and-mortar bookstores. (Amazon does provide some expanded distribution options in the United States.)

And, of course, the program only applies to Europe for now. The books aren’t available through Amazon’s Chinese or Japanese sites, and they aren’t available in other markets where Amazon doesn’t operate, like Brazil.

Still, European access through Amazon might be enough to persuade some self-published authors to hold off on hiring that agent to handle foreign rights for now. Some authors, like bestselling romance author Barbara Freethy, are already self-publishing foreign-language editions of their titles. Today’s news gives them a little more room to expand on their own.

Even better: This report includes the term “bull-twinkie.”

Some tidbits from Citi analyst Mark Mahaney’s survey of over 1,100 “U.S. Internet consumers” (so just imagine “Citi says” in front of all these bullets):

–Twenty-three percent of survey respondents own a Kindle e-reader — just a Kindle, not a Kindle or some other type of e-reader. A July 2011 Pew report estimated U.S. adults’ e-reader ownership at 12 percent, hence Citi’s assertion that “Kindle ownership has increased about 100% over the past 7 months”). Six percent of respondents own a Kindle Fire.

–”We see Amazon’s eReader revenue contribution as actually materially greater than its Tablet revenue contribution for the foreseeable future.”

–”E-reader owners purchase about 2.4 books per month….this survey finding is higher than our prior assumption of about 1.5 books purchased per month by Kindle owners.” Also, 24 percent of respondents said they’d purchased five or more e-books in the past 30 days.

–Kindle Fire owners are most likely to use their device to read e-books (35 percent), browse the Internet (18 percent), and play games (18 percent).

–Eighty-one percent of Kindle Fire owners have purchased digital products, 10 percent have purchased physical products and 8 percent have purchased nothing.

–About 20 percent of Amazon shoppers in the survey were also Prime subscribers — most through a paid annual membership (58 percent). Also, Citi agrees with me that this Bloomberg report on Prime subscribers is stupid: “12 percent of Amazon shoppers in our survey are paying Prime subs. Although a relatively low %, this would seem to suggest that the recent report that Amazon has only 2-3MM Prime Subs was a bunch of bull-twinkie.”

–”Prime subs shop more frequently (22x per year vs. 9x purchases per year done by non-Prime subs) and spend more dollars ($458 vs. $310, or about 48% more than non-Prime subs.”

–Finally, for those who just really like analysts’ estimates of devices sold: Citi estimates that 30 million Kindle e-readers will be sold in 2012, compared to 12 million Kindle Fires. And Citi estimates Amazon’s e-book sales at $6.2 billion this year, up 176 percent from 2011.