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Amazon's Kindle Unlimited Is a Victim of Its Success in Japan (wsj.com)
You really need to understand the market before you start operating there. Take Amazon's case for instance, which has found itself in the middle of a backlash with publishers in Japan. When Amazon launched its "all-you-can-read-subscription" Kindle Unlimited service in Japan, the company didn't know it would become such a big success. And yet it did. So much so that Amazon had to sharply scale back within weeks of its introduction in the country. Before Amazon introduced the feature in Japan, it partnered with Japanese publishers to offer their popular content, committing to pay them a premium through the end of this year when a customer reads at least 10 percent of a book or other content. It worked -- too well, WSJ reports. From an article: Since it's easy for readers to get through the first 10% of a magazine or photo book in just a few minutes, Amazon quickly found itself on the hook for large payments (Editor's note: the link could be paywalled; alternate source), a person at one publisher said. A person at another publisher said Amazon made an overture for talks in September saying it had hit its budget limit for the payments to publishers and wanted revisions to its contract with the publisher."
Unlimited as long as you don't use too much
People with even a cursory knowledge of Japan know that Japanese are voracious readers. I don't feel sorry for Amazon. They should have to pay up and chalk it up as a stupidity tax.
Not in this case. It was that Amazon offered the bonus on magazines and books consisting of mainly photos. Easy content for person to quickly go through 10%.
It would be like Amazon getting a deal with Marvel and DC for all comic books. Even if you were just browsing a bunch of series you would like go through 10% of a book before switching to something new.
I've had Kindle unlimited for a while and find the selection very limited. Sure they have a lot of in-house books listed there, but the quality is extremely varied. For the amount I read from unlimited, I am spending more on unlimited than I would if I were to simply buy the books I've read and enjoyed. I suspect I'm not alone in this. So for Amazon in the US, the unlimited has been wildly successful I think. It's a check-cashing service for them.
I've encountered a few good indie books on unlimited. But the author didn't make much money if any because of my unlimited reading. Amazon's contract was designed to benefit Amazon first and foremost. Therefore I have little sympathy for Amazon Japan's problems. A contract is a contract. They agreed to it, they need to follow through until the contract is fulfilled.
Never underestimate the reading capacity of a country where a large portion of the population has an insanely huge commute to work.