Is Amazon.com the New Netflix?

The next few weeks should be interesting for Amazon.com (NAS: AMZN) .

The leading online retailer is widely expected to introduce a tablet soon, giving it a gadget that can take on both Barnes & Noble's (NYS: BKS) Nook Color and Apple's (NAS: AAPL) breakthrough iPad.

A major advantage that Amazon will have over the competition is that it already has an unlimited video-streaming service in place. The Seattle-based e-tailer offers a limited selection of movies and television shows -- 8,000 titles strong and counting -- at no additional cost to members of its Amazon Prime subsidized shipping club.

Amazon's digital-video push, just as Netflix (NAS: NFLX) is starting to charge disc-based subscribers $7.99 a month for streaming access, is being seen as an opportunistic by the popular Internet retailer. What if that's not the only way it's ripping a page out of Netflix's playbook?

The Wall Street Journal is reporting that Amazon is in talks with book publishers to gauge interest in launching a Netflix-like service for digital books. Customers would pay a flat annual fee -- just as they do for Amazon Prime -- and then have unlimited access to the e-book library.

It won't be an easy sell, but it would be spectacular for Amazon if it's able to pull this off.

Taking the Kindle to the next level
The Kindle is an undisputed hit. Amazon has sold millions of e-readers over the past four years. However, it's still a hard sell for some diehard bibliophiles. Kindle books are generally cheaper than their hardcover equivalents, but they just can't hang on a bookshelf for bragging rights. Amazon has been beefing up virtual sharing options to close in on the real-world ownership experience, but it still needs that one killer app to make a Kindle as obvious an accessory for book lovers as a library card.

A digital smorgasbord of literature would do the trick, as long as it's able to talk some of the heavy-hitting publishers and authors into giving it a shot.

That won't be easy. Amazon will face the same resistance that Netflix has faced with Hollywood studios. If a book -- or a DVD -- will sell well on its own or fetch healthy ransoms as piecemeal rentals, why devalue it as part of a virtual buffet?

Kindle owners already have access to countless public-domain works, so it's not as if they'll be impressed by sheer quantity. They will need quality, too, and that is where the publishers hold all of the cards. It also doesn't help that publishers are already wary of the power that Amazon already has over them. They caught a break when Apple's iPad and Barnes & Noble's Nook successfully entered the market. If Amazon gets to lead the way here, the Kindle will grow its already significant market share.

Amazon wants this story to end one way -- but the publishers are pushing for a different conclusion.

If you want to see how Amazon's Kindle dreams play out, addAmazon.comto My Watchlist.

At the time thisarticle was published The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Netflix, Amazon.com, and Apple, creating a bull call spread position in Apple, and buying puts in Netflix. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.Longtime Fool contributorRick Munarrizcalls them as he sees them. He owns shares of Netflix and is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has adisclosure policy.

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