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It may be summer, but Amazon.com (Nasdaq: AMZN ) is already thinking about school.
Amazon's Kindle is rolling out textbook rentals in e-book form, hoping to cash in on the lucrative student market.
The premise is simple: Readers can save as much as 80% off a textbook's price by renting it virtually for as little as a month to as long as a year. Instead of lugging around a ton of heavy textbooks, a light yet sturdy Kindle will spare the backpack-toting youth unnecessary back pain. Let's not even get started on the hassle of either keeping costly books that you will likely never crack open again or having to cope with the burdensome reselling process.
Many publishers are jumping into Kindle's new program. Elsevier (NYSE: RUK ) , John Wiley & Sons (NYSE: JW-A ) , and Informa's Taylor & Francis are all onboard. Surprised? Don't be. The margins on rentals are likely just as compelling as the printing, shipping, and distributing of textbooks that will probably be resold without their ability to cash in on the repeat sale.
This could be a game-changer for the textbook publishing industry, and it won't be long before McGraw-Hill (NYSE: MHP ) and Pearson (NYSE: PSO ) follow suit if schools and students begin turning to Kindles.
It's not as easy as this morning's idyllic press release makes it out, though. The Kindle still has limitations, especially when it comes to graphically rich textbooks.
Amazon's also promoting the ability to keep the margin notes and highlighted passages that Kindle owners can scribble virtually beyond the terms of the rental. I can't be the only one that has never had the desire to revisit my personal textbook notes. If anything, this reminds me that it's fundamentally harder to highlight or make margin notes on a Kindle than it is to whip out a highlighter or pen and mark up a real book.
Oh, and does this mean that if I highlight the entire book that I get to keep it in perpetuity on Amazon's cloud?
Amazon isn't the only one in this space. Textbook e-tailer eCampus has a virtual bookstore program, and I imagine most textbook distributors on the cusp of potential extinction are also exploring ways to reach out to their customers.
If anything, the Kindle's shortcomings on some display-intensive textbooks may open the door for Apple's (Nasdaq: AAPL ) iPad 2 or Barnes & Noble's (NYSE: BKS ) Nook Color to steal some of the Kindle's thunder.
Then again, it's easy to smell the scorched shorts that bet against Amazon's ability to stay one step ahead of the market. New Kindles and Amazon's first tablet are reportedly just weeks away at this point.
Somebody's going to school somebody, and it's hard to bet on Amazon being the one with the dunce cap at the end of the lesson.
Can textbook rentals in e-book form be successful? Share your thoughts in the comment box below.