Kindle 2: A Winner, Because Content Is King

Stephen King's novella UR will be available exclusively on Kindle for at least a while as part of the introduction of Kindle 2. Mainstream content by famous authors is unlikely to stay exclusive to the device, but this marketing approach gives a hint of what's to come. Many of us will "need" Kindles because the content we want is available on them first or because Kindle – and perhaps a set of Kindle-compatible readers – are the only place we can get certain content. Physical books won't die away – especially because they can be produced without huge inventory cost using print on demand (POD).

This is partly wishful thinking on my part, as I'm hoping that Kindle and devices like it, will become an alternate road to publication for new authors and will diminish the gatekeeper function of mainstream publishers. Hits, in most cases, will still require clever marketing, celebrity, and/or luck. Chris Anderson has written famously about how Amazon's (AMZN) "endless shelf" supports the long tail of books which would otherwise be out of print and out of distribution because they didn't make the sales cut for brick and mortar book stores. It makes sense that Kindle and the like will support an even longer tail – books, which never would have been published at all except that they can be published and distributed at almost no cost (except the writing!) because they're only published electronically.

Some reference books will simply change to a subscription model so they can be kept ever current. Cruising guides come to mind because we need to be able to access them even when we're not online but also would like them to be up-to-date.

Extremely topical books will come out first or perhaps exclusively for e-readers since they're need in a hurry but quickly become obsolete. Books like UR, which are launched with hit power, will trade short-term exclusivity for launch publicity, and you have to have a Kindle if you want to be first on your block to read UR.

Perhaps because of production and cost bottlenecks, Amazon is not aiming the Kindle at the long tail of book publishing, just yet. There are many less books, just 230,000, available in the Kindle store than there are in Amazon's marketplace for traditional books. My blog, Fractals of Change and my book, hackoff.com: An historical Murder Mystery Set in the Internet Bubble and Rubble, are both available on Kindle. I could only make the novel available for Kindle because it already was carried on Amazon as a "real" book, and I'm not quite sure how the blog was chosen. Amazon solicits me for marketing and co-promotion opportunities for the traditional book, but I still haven't found out how to do direct marketing to Kindle owners (I just asked Amazon). My short story, "The Interpreter's Tale," is available as an e-book for downloading from Amazon to a computer, but not for Kindle. At some point, Amazon will make all of this come together, but it still hasn't happened - yet.

Amazon will eventually have to decide whether it is a device provider or a content reseller. As a device-provider, it makes sense to keep the price of the now scarce Kindle high at $359, but a content re-seller would want to take a razor and blades approach, and make the reader cheap, or even license the technology liberally to increase the audience for downloads. This is a tough decision because success would then depend on being the place where author's "publish" and readers search. There isn't much cost to publishing in multiple places. In the physical book world, Amazon has managed to create and expand its position to be THE place to find the book you want. For authors today, if your book is only going to be carried in one place, you want that place to be Amazon.

My bet is that Amazon will eventually decide to expand the market and take the price of the reader down – especially if it sells in high enough quantities at today's price to lower the cost of manufacture. However, this is NOT what Amazon elected to do in Monday's announcement: the company followed the practice of the electronics industry by using lower component costs to increase capability rather than to lower price.

Disclosure: None

Comments

[Roger Knights:]

If Amazon undercut the price of the Sony Reader, and other electronic readers, its competitors might sue it for anti-trust abuse of its dominant position. So I don't see how it can cut its price much for five years or so. It would be taking too big a risk to do so.

Feb 11 06:07 AM

[eBook Hero:]

I love eBooks, and I'm glad that Amazon's position as a major entity is calling attention to eBooks. However, Amazon's proprietary format is a HUGE problem. I don't want to be locked into buying eBooks from only one source, and I want to be able to read my eBooks wherever I am - including on my desktop at work. I used my sister's Kindle for a few weeks last year, and was unimpressed. There are great alternatives out there - I currently use the Cybook, which is lighter, more attractive, cheaper, and I can buy eBooks from a variety of sources (more about the Cybook). The Kindle, while frequently touted as a "huge leap forward", really exemplifies why so many people are hesitant to try eBooks.

Feb 11 02:15 PM