Could Amazon’s Lending Library End in Court? →
This explains so many questions about the new Amazon Kindle Lending Library: why it has so few books, why you can only browse the books from your Kindle, and why you can only check out one title per month.
PW has learned that the overwhelming majority of publishers with titles featured in the program did not reach any agreement with the retailer. Rather, these titles were taken without publishers' knowledge or consent.
... As has been reported already, titles from the big six houses were not included in the Lending Library because these publishers sell on the agency model. The books featured in Amazon’s Lending Library are all either self-published, published by Amazon (under one of its imprints), or published by houses that sell on the wholesale model. Amazon was able to include publishers’ titles without their consent because the e-tailer is treating the borrowing process as a sale—each time a Prime user borrows a book, Amazon pays the publisher as if the book was bought.
Apparently, some of the publishers (and some authors) are quiet upset about this. Legally, I'm not sure how this works. If Amazon is essentially buying a book, each time it's checked out, the publishers are still getting sales and Amazon is eating costs. This seems to financially hurt Amazon far more than the publishers. But, intellectual property contracts and law can be very slippery things and there may be legitimate ways that this hurts publishers and authors.