Edit: After doing some research on Amazon's site, it seems the reader pays $1.99 for the entire series.
Edit: It looks like $1.99 may be an introductory price because the program is new. The actual price may be $4.99 as the program goes on. I'll keep everyone informed on the blog when Amazon make an official announcement.
I suggest not getting too excited until we know exactly what Amazon has to say.
Anything else is simply speculation.
However, what we do know straight from the horse's mouth is that they are acquiring rights to the serials under a submission process, and the submission guidelines are here if anyone is interested:
Submissions GuidelinesWe welcome submissions to Amazon Publishing’s Kindle Serials program. We're looking for well-written stories by authors interested in engaging with readers through the unique nature of serialized publishing.
How to submit
To submit to Kindle Serials, send an email to email@example.com with the following:
• A brief pitch of your story including why you think it works as a serialized book, the estimated total number of episodes, and the estimated total final word count.
• A minimum of two episodes in a Word or text document. Each episode should be a minimum of approximately 10,000 words. We’re open to considering projects with more or fewer words per episode, where it makes sense. The complete book doesn’t need to be already written.
• A one-page synopsis of the complete book.
• A one-page biography.