What if I pay authors 25 cents per unique download, PLUS profit sharing, where extra income is divided among authors based on downloads?
do you think that writers would more likely use that? Thank you so much.
Others have answered the Kindle Prime question far better up thread, but here are some things to consider:
(a) As a new site with no user base, you do not have much to offer authors, because the potential for income isn't there. (e.g. if you have 10 subscribers, the author maxes out at 10 'borrows' on your site.)
(b) As a new site with limited/no authors you have nothing to offer subscribers. Netflix (mentioned above) is having trouble maintaining $8/mo subscribers because they don't carry some of the many video streams out there and often can't license new release movies. Your site would have to pay at least library license fees for trade published books (substantially higher than an individual buying them) and then would have to market to attract independent authors (who by-all-rights should demand a library license fee as well).
You will have need capital to run this business for an extended amount of time without the benifit of significant subscriber income. I can tell you that the first time you're payments to authors are late or underpaid, that will go viral on all the boards where your potential publishers socialize and books will be pulled out of your program.
So, even if you can put together a technical platform that is professional, provides useful reporting, provides DRM and grows a community (and that is HARD to do), you'll have to make potential author publishers believe you have the capital to carry this to the point where it is self sustaining. AS SUCH, the term "profit sharing" is almost a useless offer for the near future.
Under your $0.25/download program, an author would have to get 8 borrows to equal the income from one sale on Amazon at $2.99. How will you convince authors that your site will result in nearly 8 times the conversion rate that Amazon provides? Authors would see a better ROI going free on KDP and netting reviews on their books, than making them available through your program.
In general, paid subscription sites are hard to establish. You have to offer some sort of value that distinguishes you from competitors (especially when those competitors are free sites). If you want to look at a semi-similar concept, look at how well paid loyalty cards are doing for B&N and those types. My understanding is that they are not burning down the house as a direct revenue stream, their income is from backend rentals of marketing lists.
If you really want to do this, then I suggest you start now in building your community, since that is what will attract author/publishers. If you had a community of 50k - 75k users, then that would be a very different proposition. But, even in a community of 75k registered users, you would be lucky to convert 3% to paid subscribers (so 2250 subscribers on a very high side - 750 is more realistic), but that would give you a place to start promoting to author/publishers.