There it was, on the entire back page of the A section of the New York Times a few days ago, at a likely cost of over US $100,000: a full-page ad from Amazon touting free “lending” of all of the Harry Potter e-books for members of Amazon’s $79/year Amazon Prime program who own Kindle e-readers, starting next month.

I wrote last December about the challenges that public libraries face as e-reading becomes popular and major trade book publishers increase restrictions on public library e-lending of their titles.  Copyright law allows publishers to set license terms for digital content, so instead of giving e-book buyers the standard “copyright bundle” of rights, publishers can dictate whatever terms they want — including refusal to license content at all.  Currently five of the Big 6 trade publishers restrict library e-book lending in some way, including two of them that don’t allow it at all.  Libraries have little leverage against publishers to change this state of affairs.

I also discussed Amazon’s Kindle Owners’ Lending Library (KOLL), which is one of the benefits of Amazon Prime membership (along with free shipping and access to streaming video content), as a step toward the private sector invading the turf of public libraries.  In case anyone doesn’t see this, Amazon makes it quite clear in its press release:

“With the Kindle Owners’ Lending Library, there are no due dates, books can be borrowed as frequently as once a month, and there are no limits on how many people can simultaneously borrow the same title—so readers never have to wait in line for the book they want.”

In other words, Amazon has implemented a model of “one e-book per user at a time, not more than one per month.”  It can configure any such model on its servers and enforce it through its DRM.

KOLL’s selection had been limited to a few thousand titles from smaller publishers.  Recently Amazon has been moving aggressively to increase the KOLL catalog, despite lack of permission from some publishers and authors; it now claims a catalog of over 145,000 titles.  Amazon did make a deal with Pottermore, the organization that distributes J.K. Rowling’s Harry Potter titles in digital form, to include those titles in KOLL.  Pottermore admits that Amazon paid it “a large amount of money” to do so.  Taken together, these steps take KOLL to the next level.

Of course, there are several reasons why the Harry Potter case is exceptional.  The only way to purchase Harry Potter e-books is on the Pottermore site, and Amazon wanted to find some way of luring Potter fans back to its own site; Harry Potter is a series of seven books, and Pottermore believes that allowing users to borrow one title per month will lead to increased sales of other titles; The Amazon Prime and public library demographics may not overlap much.

But still, this deal is an example of Amazon using content to make its devices more valuable.  The company is subsidizing a bestselling author’s work to induce people to buy Kindles and Amazon Prime memberships.  This kind of arrangement is likely to become more commonplace as authors, publishers, and retailers all get more information about the value of private-sector e-lending and learn how to make such deals strategically.

This is nice for already-famous authors, but it doesn’t benefit the multitude of authors who haven’t made it to J.K. Rowling’s rarified level.  It’s not something that libraries are able to replicate — neither the subsidies nor the full-page ads in the New York Times.