This is the Spotify model for ebooks, and like Spotify Amazon does not pay per album/title, but rather per page/song like Spotify. Spotify has a catalog of about 15 million songs and pays .01 cent per song play, which seems low in comparison to Amazon's extravagant .5 cent per page read, but consider the fact that I can play Spotify all day long in my office, so over the course of one hour I play around 20 songs which if we were to calculate out based on my behavior would still place Spotify in the pole position for highest weekly payout on me. But I am not the average consumer whose consumption of the titles in Kindle Unlimited would be much more voracious as KU has a fairly rich popular and best seller catalog.
Which is where things get interesting for libraries. Large urban libraries have recognized for a number of years that their popular music collections are outmoded in the age of Spotify and Pandora. Patrons aren't even ripping our CDs anymore because they are so easy to get elsewhere. At my library we are consciously tracking CD circulation and preparing for that moment when blips in our stats become trends and we begin the process of phasing out the CD collection. The analog between music collections and Kindle Unlimited has many corollaries. First, we have a much richer and deeper collection that KU, but the majority of what circulates is popular fiction. Best sellers and the like make up the vast majority of what leaves our collection. What is ironic is that early data suggests that KU has figured out how to move more of the "B list" titles, as Amazon is seeing a lot of casual reading outside of the best seller list. So could KU pose a similar threat to libraries as Spotify does?
Not necessarily, because a majority of Spotify's clients are nonpaying, and I don't think advertising in books works as easily as it does for "radio". Because even though Spotify is not radio, it still serves and operates in that same realm and patrons are willing to put up with those ads. Wowio tried to use ads in ebooks some time ago and it never really worked. This has to do with what I call the commodification effect digitization can have on a product. Music has been thoroughly commodified to the point where the actual file has little to no dollar value, but because there is still a small monthly charge for KU, KU is not quite ready to fill that market the way Spotify and Pandora do. As long as Amazon has this barrier libraries should be relatively safe from seeing subscription ebook services have the same affect on our book collections as Spotify has had on our music collections. Instead of a large exodus, we will see a trickle of patrons choosing to pay for KU each year.