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Monday, January 14, 2008

Amazon’s Kindle - My 2¢ Worth

Amazon’s Kindle debuted almost two months ago to great fanfare, managing to capture the cover of Newsweek. A Google search for “Amazon Kindle” takes only 0.22 seconds to return 4,050,000 search results, although it would take you considerably longer to read them. I have only read a few of these articles and reviews, but a consensus quickly emerges that Amazon got it right in terms of Access but failed in terms of Design.

The concept of Design incorporates both the ‘hardware’ or physical design of the device itself, and the software’ or ease of use aspect. The hardware seems to get consistently failing grades. Ugly is the word used most often in the articles I’ve read, not to mention how often people complain about hitting the forward or back button accidentally. The software seems to be hit and miss depending on the user. A lot of comparisons have been made to Apple, but let’s face it - there is only one Apple, regardless of whether you are a fan or not.

To me, the Access piece actually consists of two components.

The obvious one is the link to Amazon, the quickest and easiest way to get books for the Kindle. Amazon boasts that the Kindle offers ‘instant access to more than 90,000 books, blogs, magazines, and newspapers’. Despite this, a common complaint in many of the articles is that they can’t find the books they are looking for. Obviously there is still more work to be done in this regard. This is a problem that will only be solved with time, as new books are added ‘Kindle ready’ and existing books are converted.

The other aspect of Access is the method used to obtain new books, which is a dedicated cellular connection. This is ground breaking, as it frees the book reader from being tied to a computer. Trust me, this is a very good thing. Anyone who has tried to sync up their MP3 player - or even worse a video player, as I quickly discovered over the holidays - knows what I am talking about.

Much is also made of the fact that there are no monthly fees to use this connection, as if this were a good thing.

But maybe it isn’t.

How many people pay full price for a cell phone? I know I don’t. When I need a new phone, I take advantage of my carrier’s hardware upgrade plan, locking myself into yet another two or three year contract in return for a sharply discounted phone.

Let’s apply this to the Kindle. First you have to purchase the device for almost $400. Then each book you buy costs anywhere from $5 to $10 on average. There are free books available on the web, but purchasing new books would help keep the publishing industry going and sharply increase the number of books available - basic supply and demand.

So let’s do the math. If you read one book a week, it would cost you $20 to $40 a month or $60 to $120 a year. Average the life of a Kindle at an admittedly low estimate of three years, and it works out to $1,180 to $1,960 over this time. That sounds like a lot, but if you look at it on a per book basis that only $7.56 to $12.56 per book. Not a bad deal for the convenience of carrying around a small library with you, or being able to purchase a book wherever you are (airplanes excluded of course). But that initial $400 price tag for an ugly and awkward to use device just seems painful and is a major barrier to entry.

An article on Kindle-nomics in The Library of Economics and Liberty praises the “idea of giving away the connectivity and making you pay for hardware and content”, going so far as to hope that “Amazon starts a trend in the direction of getting rid of monthly bills from network connection services.” There may be valid economic reasons for this hope, but speaking as a cash-flow driven purchaser this doesn’t work for me. I think Amazon should take a cue from the cellular providers and make the Kindle available at a steep discount combined with various data plans.

Think about it. It would be much easier to rationalize and come up with $30 to $50 a month, Amazon would have guaranteed sales for the next three years, and authors and publishers would benefit. No doubt Amazon would ding the publishers for listing their titles in Kindle format, but if people know that they are entitled to a certain number of books each month, they will be more likely to buy new books. I can’t tell you how many times I’ve stood there in the local bookstore, waffling about whether or not I should buy whatever book I’m currently looking at. With a subscription model I’d probably just go ahead and download it.

Not only that, but when you are walking around with your Kindle in hand and your best friend tells you about this great book he or she just read, you’ll be more likely to go ahead and download it. As it stands now, the Kindle makes it easy to do just that, but you still have to pay for the book. A subscription plan would make you more likely to listen to that recommendation and make an impulse buy.

I’m certainly not an expert but I am a fairly tech literate author. More importantly I’m an avid reader , the very person that Amazon is hoping to target. To me, Kindle has missed the mark.

So here’s my 2¢ worth. Hire some ex-Apple designers or Apple fanboys/girls and pretty up the device so people will want to be seen with it. Once that has been accomplished, figure out a way to either sell a subscription plan or partner with someone who already has experience in that area. Not everyone will want to avail themselves of a subscription plan, but the number of people who do might surprise you.

posted by David at 1:17 am  

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