Kindle Unlimited gives you unlimited access to about 600,000 ebooks and audio books on Kindle devices.
Prime gives you free 2-day shipping on a large number of Amazon products and gives you unlimited access to Amazon Video.
I personally was a little surprised (and disappointed) Amazon didn't roll this out as another Prime perk. I'm not sure why making Amazon Video available to Prime members makes financial sense to Amazon, but making Kindle Unlimited doesn't.
edit: With Prime, you also get access to music, some ebooks, and something called "Amazon Pantry". There is a description here:
I'm a Prime subscriber and I didn't know about this. It seems the lending library has 350K-500K books, not dissimilar to Kindle Unlimited. And like other commenters, it looks like both unlimited and the kindle lending library has pretty small intersection with my reading habits.
Lending library, though, only allows you to check out one book a month, and you have to have a physical Kindle device. The Kindle unlimited, it seems, allows you to use any kindle app, which is a nice change. I did just recently get a Paperwhite, so it doesn't affect me as greatly now.
I'll agree with both points. I tend to like non-fiction books more than anything. But I imagine both the lending library and Kindle Unlimited are trying to hit the greatest percentage of the population.
I would like to see a "Pick One" because I have zero use for the Prime Video but I could have a limited use of Kindle Unlimited. Prime Video is not supported by any of the platforms I choose to consume media on (linux desktop and RaspPi Media Centers)
In a Dream World I would be able to get a Free Shipping only Prime Account. I will probably cancel my Prime after this year since the jacked the price up to $99, Just not worth it anymore (plus they now charge Taxes for my state so I am buying less and less on Amazon)
[1] http://www.amazon.com/gp/feature.html/?docId=1000739811&ref=...