This article in Moconews raises a lot of questions.

How do authors get paid? The publishers who agreed to include their books in the program are receiving a lump sum from Amazon (NSDQ: AMZN) no matter how many times their titles are borrowed. “I strongly believe this type of program needs to compensate publishers and authors on a usage level, not a flat fee,” writes Joe Wikert, general manager and publisher at O’Reilly. “The more a title is borrowed, the higher the fee to the publisher and author. Period.”

SEE ALSO: ‘Kindle Free Book Lending Holy Sh*t!’

Wikert thinks the release of the Kindle Fire is going to lead to a surge in Amazon Prime members, and “there’s no way to estimate how many times a book might get loaned out. That also means it’s impossible to come up with a reasonable estimate on a flat fee for a publisher’s list.” Though Wikert is generally a big Kindle fan, he says he can’t support the Lending Library as a publisher unless it switches to a pay-for-performance model.

According to literary agents’ group Association of Authors’ Representatives (AAR), Amazon has “confirmed that they will be reporting title activity back to subscribing publishers.” But…

Why don’t authors get to decide whether their books will be included? The AAR issued a statement today (emphasis mine):

The agent and author community have not been consulted about this new sort of use of authors’ copyrighted material, and are unaware of how publishers plan on compensating authors for this sort of use of their books, which is unprecedented. But we think free lending of authors’ work as an incentive to purchase a device and/or participation in a program is not covered nor was anticipated in most contracts between authors and publishers—nor do most contracts have any stipulation for how an author would be compensated for such a use. Without a clear contractual understanding with their authors, it is unclear to us how publishers can participate in this program. We take very seriously our role to protect the interests of our clients, and at this stage it is difficult to see how this program is in the best interests of our clients.

More in the article.