When Amazon launched the Kindle they missed a great opportunity. It’s not like they need it, but they should have made the Kindle FREE. The e-book reader market is still a developing market, but we’ve seen that whoever is king early on is often hard to knock down once they are on top. Amazon could have been king of this market. A market that I think is the final nail in traditional prints coffin. I know people have said for a long time print is dead or dying or said books will be obsolete by two thousand and whatever, but we still have books and we still get newspapers. Sure numbers are down on print runs for news papers and book publishers are more selective of what they publish, but paper is still a big part of our life, due to convenience not demand.
I also know that there’s two sides to everything. Companies usually want to milk one business model before they move to another, and adopters are usually slow on the uptake. Plus Free means a very significant chance of exploitation (greatest understatement every?) but without bold actions some times good ideas die off. I think that e-readers are something that will only grow over time, especially as technology like OLED develops, but it also means that Amazon is prime to be over taken as king of book distribution. There’s an opportunity for some company if it’s not Amazon to literally give away their e-reader for free and make a profit, and compete with Amazon in a way that was unexpected by most.
How Do You Make Money on Free?
Amazon’s model for the Kindle is already smart. They pay for an always connected network to their amazon.com store. You can purchase your books at any time directly to your Kindle, and they make it easy to do so. That alone guarantees good returns on the profit from the device as they make money on both the sale of it and the books bought after purchasing it. They have a great business model that locks in a customer to the amazon store, very much like Apple and the Apple store. What the big problem for Amazon is that there are a lot of competitors still coming up in the e-book reader market, and they are aggressive. Amazon hasn’t proven yet that they can dominate the e-reader market, like they have with hard copy book market. The second thing Amazon can offer given the device is internet capable is to sell adverting space related to the content of the book you are reading. This advertising could easily offset the cost of every kindle given away (think Google AdWords).
Now on the other hand if some enterprising start up company were to come along and start to give away their e-readers or at the very least sell them for a ridiculously affordable cost (less than 100 dollars? less than 50? I’m not sure). If they sold/gave away these devices and enabled them to easily find and download books through a built in web browser of WLAN and cellular wireless networks that company could have a winning product (if they can own the primary delivery system), especially if that e-reader rendered in color e-ink. I’m telling you now there is opportunity to upset one of the largest companies that makes their money on the internet today, and it’s through one simple device. The money isn’t in the product it’s in the services it offers (books, magazines, news papers, advertising.)
The Medium is the Message
The other change that giving away the Kindle will evoke is the overall world of print media its self. The quicker Amazon can usher in the age of digital books, the more books they will be able to carry (and they already carry a lot). A good solid e-reader and consumer acceptance will mean the end to most paper versions of books, also making it much easier to get published. Self publishing becomes much more of a reality with the advent of electronic print. It also means that people will be exposed to a lot more “noise” of which books to read, and it will become more convenient to stop reading some books due to the digital bookmarks, and all of this will also change how books are written. They will have to be written more tightly and with better hooks to pull in the readers. Writing will also allow for annotations to easily link to other works (links that can lead to sales of other works). If you’re reading the first Harry Potter book, and a referenced is made to a past exploit, the book can have a link to the section of that book that describes that exploit. If you don’t own the book then you have the option to buy that book, or maybe even just that section of the book. The advent of e-readers will change the medium completely and will revolutionize how books are written and edited.
Free e-readers to everyone means a more open market to publish content too and the one who will profit the most from that is the distribution channel. Much like publishers reaped the rewards of popular books Amazon will be able to become the publisher and the distribute all in one fell swoop. Reducing costs of large warehouses to store books, reducing costs of publisher fees, and printing fees, and everything else that goes into a tangible book, and that savings should be passed onto the customer. Meaning cheaper books, and a larger market. Amazon’s long tail strategy of selling will only be empowered by digital books. As far as I’m concerned the e-reader revolution can’t come soon enough, and if it’s not Amazon who capitalizes on it now then I hope it’s some other brave company that does.