Technology blogger Mike Elgan posted a very smart piece – Elgan: Why the iPhone doesn’t matter – in which he argues a strong point, much more elegantly, that I have been making since the Kindle first appeared: that the device is almost always secondary to what it connects us with. While he focuses primarily on the iPhone, he carries the point over to this smart observation about the Kindle and its baby-faced assassins:
A similar phenomenon is happening with other devices. For example, the Amazon Kindle is by far the best selling e-book reader. But the Kindle hardware device is nothing to write home about, especially the first one, which was a piece of junk. What’s great about the Kindle, and the thing that makes it “better” than the Sony Reader and even better than all the color “Kindle Killers” that have been demonstrated in the past year, is the Amazon Kindle Store. Hardware doesn’t matter. Network is everything.
Amazon Acquires e-Book Competitor Stanza’s Parent, Third-Party Vendor Seeks an M-Edge with Kindle Ads in Apple’s Subways, and the Net Whispers its Fears About World Domination
The Bottom Line: Is Kindle Content Coming to Your Computer?
In the April Kindle Nation survey, in the course of asking participants about other issues (DRM, text-to-speech, and the pricing of Kindle editions), I decided to raise another issue as quietly as possible: did respondents identify with the statement “I am concerned that Amazon may be developing a monopoly over digital books.” 129 respondents checked the box — 10.5% of the total. Enough to notice, but fewer than a third of the numbers that expressed concern about DRM, TTS, and the $9.99 controversy.
There’s plenty to sort out here. Just for starters:
Unless Amazon’s purchase of Lexcycle is a draconian move aimed only at taking Stanza out of play as a competitor, the fundamental (if not, probably, first) order of business for these unequal but newly married partners will be to make Stanza play nice with Kindle content
Stanza can be downloaded to just about any Mac or PC, any desktop, laptop, notebook, or netbook, so it seems like a no-brainer that the Lexcycle acquisition should provide Amazon with the means to push Kindle content to every kind of computing device from the most to the least mobile
Stanza works alongside an app called Bonjour for the iPhone or iPod Touch, which has functionality similar to WhisperSync
Stanza also gives Amazon an interesting set of choices to make around DRM and open publishing platforms, since Stanza reads the EPUB format that has been widely promoted as a possible publishing industry standards
So why did I begin with that passing suggestion that some Kindle owners may be concerned about the potential for Amazon to monopolize or otherwise dominate the world of ebooks? It’s pretty simple, really. While only 10.5% of our survey respondents expressed the concern, it is a growing concern among authors, publishers, and — least surprisingly of all — Amazon’s book retailing competition.
Amazon would probably love it if every one of its Kindle content and accessory partners took the approach of M-Edge, which is paying for huge ads in the New York City subways promoting the Kindle, like the one at the right (photo credit to Silicon Alley Insider). But some of us actually expect our relationship with Amazon to be a two-way street.
Personally, I have been concerned lately that Amazon seems willing to offer its marketing power very unevenly to authors and publishers. For instance, Amazon’s “right” to simply ignore small indie publishers who want to participate in the same kind of promotions that Amazon routinely makes available to Random House or Harlequin may seem like a simple contract prerogative to Amazon staff, but it’s not that simple. The more vertical and horizontal power that Amazon has in the book marketplace, the more the mega-retailer may find itself in a position similar, at least conversely, to the position of Blockbuster Video, Borders Books, and large publishers and distributors when they were litigation targets in years past for tilting the playing field to which smaller, independent business “partners” had access.
On the other hand, it is also entirely possible that Amazon will realize that its increasing digital content hegemony will increase its exposure either to litigation or fair trade scrutiny and, in a funny contrarian way, will thus become a little less arrogant, and a little more willing and able to act in ways that promote a level playing field and continue to open creative and business opportunities for independent content providers. That scenario, in the long run, would also be the best for Kindle owners, other ebook readers, and readers in general as well as the various kinds of ink-stained wretches among us.
Over 1,200 subscribers and other e-book enthusiasts have participated in April’s first-ever Kindle Nation Citizen Survey, and the results provide fascinating insights into who just who is participating in the e-book revolution and what we think the issues and the future of e-reading. The survey will remain open through April, so you can still click here to participate if you have not done so already, but you can also check the current results here. Once the survey is closed we will summarize the results here in Kindle Nation and share the summary with Amazon’s Kindle Group.
Most people on the outside of Google, Apple, and Amazon see them as competitors, and of course they are. But their status as partners — constantly connecting the dots of hardware, content, and network to maximize usefulness as well as revenue — is far more important, and it is at that nexus that future revolutions in reading and knowledge and publishing will be ignited, or kindled.
Two days before Amazon’s big Kindle press conference on Monday in New York, and here is a quick summary to put things in perspective:
* If you have already placed an order for the Kindle, you will be at the head of the line for the updated version that will ship in February. If you select 1-day delivery ($3.99 with Amazon Prime), you will probably receive your Kindle between February 12 and February 25, but a slight further delay is possible for most recent orders because Amazon will probably be shipping over a quarter of a million Kindles this month. (During the past 24 hours Amazon has updated my projected receipt date to February 25, from a window that began on March 4).
* It looks increasingly like the “switch” from the backordered “Kindle 1” to the ready-to-ship “Kindle 2” will be seamless, with no price change, no change in ASIN, and possibly even no designation of model “1” or “2.” I had earlier reported my expectation of a 10 per cent price increase, but I will be happy to concede error on that one as Amazon figured out that it could make the entire “switch” more seamless if it did not have to get permission for an additional charge on the hundreds of thousands of Kindle backorders in the pipeline.
* While the primary focus for gadget heads may be form factor enhancements highlighted in the “leaked” pictures of the updated Kindle that have been showing up since October, those of us who actually own the Kindle will be more interested in software enhancements, such as content management folders, which will be rolled out Monday and transmitted wirelessly to all Kindles in the field over the course of this month in the form of a firmware version update.
Yesterday Amazon let slip news that — for authors, publishers, and people who like to read on their cellphones — may potentially be every bit as big as anything the company will announce about the Kindle 2, 3, or 4 on February 9.
So, do we still call a device a potential “Kindle Killer” if millions of its owners can use it to buy books, newspapers, and magazines from the Kindle Store, with Amazon getting a 25 to 35 per cent cut? No, Amazon’s Kindle initiative has much less to do with any specific hardware device than with Amazon’s need — and apparent ability — to stay ahead of changing modalities in book and other content sales.
As I have written before: “the primary importance of the Kindle for Amazon lies in four things: it jumpstarts significant electronic book sales; it positions the books in the Kindle store as the primary source of e-reader content; it sets the bar higher than it had previously been set for form factor, feature set, and delivery mode for electronic books; and it gives Amazon a seat at the head of the table in shaping this area of book commerce going forward.” That seat just got placed on risers.
For all the snarky Applephiles and Amazonians who have mistakenly seen this as an either/or battle from the get-go, a word to the wise: we can all just get along. Meanwhile, every ereading device and ebook portal including the Kindle and the Kindle Store will, no doubt, continue to scramble to play nice with the potentially astounding free public domain catalog available through Google Books. Neither Amazon nor Apple has any need to monetize that activity, but it is essential that Google Books access be part of the feature set.
(As I have mentioned in my previous two posts, I’ve been working on completing this new chapter of The Complete User’s Guide to the Amazing Amazon Kindle, and I have been blogging some of the content here the past few days. The chapter will focus on about a dozen possibilities for Kindle 2.0 and beyond – some may be exciting to some, and others to others. This is the third post. If you scroll down to the end of this post you will find links to the two earlier posts should you want to find them. Please feel free to weigh in with your own ideas in comment form).
A Big Tent for Kindle Content Availability on Other Devices
(and the Converse….)
One of the things that can make it fascinating to watch the way Amazon conducts business is that the company often confounds conventional expectations about its merchandising strategies. Just when it appears that Amazon is all about trying to sell one category of merchandise, they turn that appearance and its attendant assumptions on their heads with strategic moves aimed at maximizing sales in some other merchandise categories.
During the half decade following the company’s rather humble origins in 1994, Amazon built a reputation as a bookseller with great prices, great service, and very good selection. Then, beginning gradually in 1999, Amazon opened its big selling tent to thousands of other online booksellers from individuals selling out of their homes or garages to major book retailers like Powell’s and New York’s famous Strand Bookstore as well as countless other entities between these two extremes of scale. While some analysts, competitors, and potential Amazon Marketplace sellers wondered aloud (or in print) why Amazon would want to invite competitors inside its tent where they could “cannibalize” Amazon’s own sales even while they benefited from Amazon’s valuable website real estate, the fundamental underlying truth was that Amazon was showing its allegiance to its primary business principle of making money by optimizing its customers’ shopping experience in terms of selection, service, and price. Eventually it became clear to all concerned, as it was repeated again and again by Jeff Bezos and other Amazonians, that Amazon was just as happy to make money off a Marketplace seller’s sales as to make money off sales from its own warehouses. (For a much more thorough exposition of these developments and how they have come to affect the world of bookselling, see “The Bookselling Business: How We Got Here,” the second chapter of my full-length book Selling Used Books Online: The Complete Guide to Bookselling at Amazon’s Marketplace and Other Online Sites.)
I digress, but my point would be that, if we look at Amazon’s history and its “customer experience” mission, it shouldn’t surprise us to find that the company’s ultimate purpose, with the Kindle, may not be to sell Kindles. By launching the Kindle and pushing hard in the general direction of making the Kindle format the industry standard, Amazon guarantees that:
·we are turning the corner toward a world in which e-books and various other electronic formats for the printed word will become more and more prevalent;
·rather than be a print-on-paper dinosaur condemned to losing its dead-tree customers graduallyto e-books and web-based reading, Amazon will be a major player, and very likely the leading player, on these evolving electronic terrains of publishing and bookselling; and
·Amazon will have a seat at the table, and tremendous influence with publishers as well as readers, in determining how various e-book publishing standards such as epub, .mobi, and .azw are positioned and which, if any, gains dominance.
To consider how this evolution will be visible in the context of future generations of Kindles or their natural offspring, it may not be too simplistic or reductive to think about two questions:
·first, when and whether Amazon will make it easy for Kindle owners to buy content for their Kindles from other sellers without having to jump through too many formatting and file-transferring hoops; and
·second, when and whether Amazon will make it easy for the owners of other e-book devices to buy Kindle edition books from Amazon for use on their Readius, iPhone, Sony e-Reader or other gadgets.
The first possibility, of course, is more than a possibility. Right from the start, it has been possible for Kindle owners to download tens of thousands of titles from free and paid websites and to use Amazon’s own file-formatting services, either free or for a dime a document, to transfer them to their Kindles. I have no doubt that Amazon pays attention to the extent to which its customers use their Kindles for these purposes, both in absolute terms and as a ratio against the number of Kindle editions that customers purchase and download directly from the Kindle store. Providing these and other ancillary benefits for Kindle owners makes the Kindle more marketable, and reduces the likelihood that customers will start reading books on some other device, so of course it makes good sense for Amazon as a business proposition. I further have no doubt that Amazon will remain alert to possibilities for ways to monetize its Kindle customers’ access to content other than Kindle editions, and might well open a revenue-sharing gateway into its Kindle Store tent for electronic files from other sellers. Of course, if an electronic file created outside of Amazon’s boundaries is sold to Kindle owners in Amazon’s Kindle store, it may be a distinction without a difference to call that file something other than a Kindle edition.
Once we imagine these possibilities, it becomes quite easy to imagine a relatively seamless world in which the owners of other e-book readers can shop in the Kindle store. I found it fascinating that during a presentation at the Spring 2008 BEA trade show, without even being asked, Jeff Bezos volunteered the possibility that Amazon might make Kindle edition books available for download to other devices. After about a decade of Bezos-watching for fun and profit, I can tell you with confidence that, despite his raucous laugh and seeming spontaneity, the Amazon CEO does not blurt things out, especially at forums such as the BEA.
So, let’s think about this. One of the Kindle’s initial missions has been to be a game-changing device that will make e-book reading an attractive choice for large and growing numbers of readers. We are not there yet, but we are getting there, and it is clear already that the Kindle is changing the game in ways that none of its predecessors could achieve. The combination of the device’s features,Amazon’s reach both with readers and with publishers, and Amazon’s relentless marketing commitment to the Kindle makes such change quite likely, if not inevitable.
Once the Kindle clears that hurdle, there will be more and more hardware competitors, but none of these hardware competitors is likely to possess Amazon’s reach or marketing power. Some of these competing devices will be every bit as cool as the Kindle, if not cooler. Others will have their own loyalists simply because they offer the convergence features that are desired by specific customers.
Why wouldn’t Amazon want to make its Kindle catalog available on these devices for the right price? If the company’s strategy runs true to form, Amazon will continue to push the Kindle but will also, eventually, be perfectly happy to be the bookseller for other electronic reading devices whose manufacturers seek entry under the big tent of the Kindle catalog.
Customer Experience: In addition to making more money for Amazon, this approach would also make more money for the publishers and authors who publish for the Kindle using either the Kindle’s .azw standard or the .mobi standard. Naturally, then, by making it easy for publishers and authors to access other electronic distribution channels simply by publishing for the Kindle, Amazon would be greatly enhancing the author and publisher benefit of Kindle publishing. This benefit, in turn, would help Amazon to come closer to its stated goal of making “every book ever published” available to Kindle readers, which would be pleasing to us as current Kindle owners and would also, in turn, help to expand the installed base of Kindles. What goes around comes around.
Likelihood of Adoption (on a scale of 1 to 10): 8. When Jeff speculates, I listen. Whether and when either of these developments occurs, of course, will depend on Amazon’s own notions about the effect of such changes on the Kindle brand, on Amazon’s net income, and on the company’s long-term vision of a world in which Amazon, through the Kindle and perhaps these other devices, is the company that provides readers with immediate electronic access to every book ever printed.
Shop the Amazon Store Through a Kindle Gateway
Here’s a conundrum for you. You know how easy it is to shop the Kindle Store from your Kindle? Pretty easy, right? (I suspect that most of us tend to do more of our Kindle shopping from our desktop or laptop computers, but that doesn’t mean that a significant amount of folding money doesn’t change hands in Kindle-based transactions).
So why doesn’t Amazon make it just as easy for Kindle owners to use their Kindles to shop the main Kindle store? Kindle owners are probably more likely than just about any other group of customers that Amazon can identify to be Amazon loyalists, early adopters, significant spenders, and avid readers. That, my friends, is what we would call a demographic Grand Slam. It is so obviously in Amazon’s interests to provide Kindle owners with a seamless Kindle-based gateway into all of the company’s many main-store departments that I am surprised I haven’t seen more discussion of this issue.
I got a chance to ask Jeff Bezos this question live on Tom Ashbrook’s On Point program on NPR, and he said that the reason Amazon had yet to open this gateway involved engineering obstacles. If they can’t fix this one soon, it’s time to hire some new engineers. This is money in the bank for Amazon.
Although Amazon has not wanted to release any information regarding Kindle sales, the company did offer a report, several months after the Kindle’s launch, to the effect that Kindle owners were buying more print-on-paper books than they had purchased before they had their Kindles. This seemed strange, but if it is true, then it would probably also be true that they would be likely to buy more gourmet coffee, shoes, electronics, and office supplies from Amazon too – especially if they could make some of those purchases directly on their Kindles.
Customer Experience: Frankly, this enhancement will probably be more of a win for Amazon than it will be for Kindle owners. For Amazon, it’s cash. For Kindle owners, it’s a minor convenience plus. But even though I don’t expect the Kindle to make my coffee (for a couple more years, anyway), what’s not to like about being able to order a case of gourmet coffee, a pair of shoes, or a new printer from my Kindle? For Kindle owners, we will know it is here when there’s a new line on the menu screen off the Home screen, right under “Shop in Kindle Store,” that reads “Shop in Amazon Store.”
Likelihood of Adoption (on a scale of 1 to 10): 10. Hey, if Jeff said it is only engineering, then it is only a matter of time.
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