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The Golden Age of Kindle 2.0 and Beyond — Part 3

(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 gradually to 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.

The Golden Age of Kindle 2.0 and Beyond — Part 2

(As I mentioned in my previous post, I’ve been working on completing this new chapter of The Complete User’s Guide to the Amazing Amazon Kindle, and it only makes sense to blog some of the content here over the next 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 second post, but you’ve figured that out already. Here is a link to the first post if you need it. Please feel free to weigh in with your own ideas in comment form).

Kindle Groups

As many Kindle owners have already discovered, the device can be as convenient for reading professional memoranda, manuscripts and other privately sent documents as it is for reading the content one buys in the Kindle Store or the free books that originate from Project Gutenberg, feedbooks.com, or numerous other sites that offer free content. With KindleGroups, Amazon would offer any Kindle owner the opportunity, possibly for an annual fee, to establish a KindleGroups Transmitter account (I’m using this word because it communicates well for now, rather than because I like it) with up to 5 KindleGroups consisting of the johndoe@kindle.com email addresses of up to, say, 1,000 Kindle owners each (although it might well be in Amazon’s interest to expand that number gratis). KindleGroups Transmitters, who would be the only ones paying the annual fee, could then send Kindle-compatible documents to all the members of their populated KindleGroups simply by sending such documents to the umbrella address of a particular target KindleGroup. Each recipient account could be charged the going micro-charge rate of 10 cents per conversion, unless Amazon decided the charge was counterproductive for KindleGroup members.

Companies, organizations, universities and other information-intensive groups would take advantage of this functionality by promoting the purchase of, or even bulk buying, Kindles for their members.

KindleGroups would help Amazon achieve an enormous increase in its penetration of corporate and other group-based markets. Naturally these Kindles would then lead to increased sales of Kindle editions, increased user time on the Amazon PC site, increased sales of all other Amazon products, and logarithmic increases in the spread of the kind of digital culture to which Amazon’s future revenue is intrinsically tied.

These are the basics, I think. Since I ordinarily come at these things from a bookselling perspective, I’ve been thinking for a while that the time should come soon when Amazon should arrange with Stephen King or J.D. Salinger to release his or her next book for the Kindle 60 days ahead of print, and then keeping doing this about once a month. Of course Amazon already knows that: nothing sells TVs like must-see TV.

But then last week I was thinking about a community organizing outfit with which I worked back in my youth, ACORN. They’ve got a thousand or so staffers spread around the country, paying for data transmission, Blackberries, laptops, whatever. They probably have a dozen or more must-read internal memoranda each week, so I got to thinking about Kindlizing their staff communications, which in turn got me thinking that every other info-intensive corporation or association or agency in the country could profit from Kindle-connectedness.

I’m kind of jazzed about this idea. I’d love to hear what others think about it.

Customer Experience: People love staying connected with their Crackberries and iPhones, but these devices aren’t primarily intended for reading and are not easy on the eyes once one moves beyond a two-sentence email or text message. The Kindle is ideal for reading longer memoranda, reports, and manuscripts, and once you (or your employer) springs for a Kindle you’ll never have to read such documents on a tiny backlit screen again. Leave your laptop home, and your Kindle and smartphone will get you through most or all of what you’ll need to do on most road trips. If you are a “transmitter,” what’s not to like about knowing that you can connect wirelessly with entire groups of staff, colleagues, or other group members, and share documents of any length, just by sending them to a single KindleGroups address. Even if Amazon imposed an annual cost of, say, $99 for transmitter accounts, remember that the Kindle’s wireless connectivity is free and you’ll see how nicely it compares with the steep monthly data costs for a Blackberry, iPhone, laptop, or other device.

Likelihood of Adoption (on a scale of 1 to 10): 7. I sent this idea to Jeff Bezos and his team a couple of months ago, but I didn’t get any love. Maybe I am missing something – there is a first time for everything – but my take on this is that it would allow Amazon to start harvesting Kindle sales by the hundreds rather than individually. Of course there is absolutely no point in Amazon moving forward with the KindleGroups idea unless they also provide a “folders” or “Google labels” feature to make it easier to manage content on the Kindle Home and Content Manager screens.

Kindle Owners as Kindle Sellers

This elegant idea is the brainchild of Joe Wikert, blogger extraordinaire who has a day job as an publishing executive at John Wiley. Have I added my own two or three cents to it? Of course I have.

And this smart column by Mary Schmich today’s Chicago Tribune is just one more indication that this is an idea whose time is here.

As with other early adopters, many Kindle owners tend to be somewhat evangelical buzz agents in spreading the word about the device and all it can do. I have to admit that when someone sees me out and about with my Kindle and asks about it, they better have 10 or 15 minutes to spare. Amazon has taken a couple of major steps in recognition of this propensity:

· A prominently displayed “See a Kindle in Your City” page on the Amazon website, promoting the concept of meet-ups in cities and towns all over the country so that Kindle owners can show off their Kindles to prospective Kindle buyers. Although one might expect some reticence to participate in this day and age, early indications are that it is becoming a popular feature.

· Right from the start, Amazon has offered a very attractive 10% Amazon Associates affiliate fee for all purchases from the Kindle store, including the Kindle itself. In other words, if you buy a Kindle through a link like this one embedded in my website, an email, or in any other content, Amazon will pay me 10% of your $359 purchase price. This can get lucrative in a hurry.

What happens when you combine these two initiatives? You get Joe Wikert’s idea, and it is a keeper. Kindle owners are already carrying a lot of water for Amazon via word-of-mouth enthusiasm about how much they love their Kindles, and all Amazon would need to do to return a little love (and, in the end, greatly multiply the love they get back), would be, in Joe’s words, to provide “something as bare-bones as one screen with a couple of text-entry boxes where we can put the prospective buyer’s name and e-mail address …. thanks to the magic of Whispernet the info would go right to Amazon and they could then send the prospect a message with more info on the Kindle. They could also track you or I as the lead originator, so if an order results, we’d get credit for it.”

Joe goes on to suggest some great operational ideas such as credit in the form of “a free Kindle book or two” and “a leader board showing the top 10 originators. There would be a lot of friendly competition to hit the #1 slot!” What’s more viral than a proposal that could turn every Kindle into an order-taking device and every Kindle owner into a Kindle salesperson?

I love Joe’s idea, and I believe it is well within the realm of Amazon’s engineer capacities as well as its marketing vision. Although “a free Kindle book or two” would be nice, I tend to think the setting up each Kindle with an Amazon Associates tag would be more flexible for Kindle owners (who might want to use their credit to order groceries from Amazon) and also more powerful over the long haul for Amazon. Each Kindle owner could automatically receive an Amazon Associate tag and account (if he doesn’t already have one), and the Kindle could be “wired” so that an email could go out automatically with a “click this link to order your Kindle now.” Amazon could even set it up so that the $35.90 affiliate fee could be split with the buyer, so that in addition to your handselling you would also be offering a prospective buyer a nice 5% discount for jumping on it right away through the link.

The profit motive would of course inspire a lot of evangelism – $17.95 a conversation is nothing to sneeze at. I feel a new chapter of my book percolating as I think about the possibilities here — I hope you won’t mind if I credit you for the idea when I wrote about it.

Customer Experience: Every time you someone asks you about your Kindle, you come a little closer to paying for it. 20 conversations and you are reading from a free Kindle! Duh?

Likelihood of Adoption (on a scale of 1 to 10): 9. What was it I said in the last paragraph. Yes, it was “Duh?” Not that there isn’t a downside to all this viral thinking. Amazon would not want to be responsible for the marauding hordes of Kindle owners preying on potential buyers in every upscale community from La Jolla to Kennebunkport, or the guys sitting in those cushy easy chairs in every Starbucks with an “Ask me about my Kindle” sign taped to their foreheads.


Kindle Content Affiliate Program

If you liked the “Kindle Owners as Kindle Sellers” concept, you’ll love the Kindle Content Affiliate Program. (I know, it needs a catchier name, which no doubt Amazon will develop. I’m just going for informative here, not sexy).

One of the features that I love in the Kindle Store is the ability to get a sample chapter of just about any Kindle edition sent wirelessly to my Kindle within a few seconds via the Whispernet. What I’m suggesting here is just a new Kindle-to-Kindle wrinkle that would allow Kindle owners to buzz to their Kindle-owning friends about the latest book their reading, with a brief note and a sample chapter. Once again, the engineering required would be a snap, and from any e-book you were reading you could click on the menu bar and pull up a screen that would allow you to type in a friend’s kindle.com email address (or select it from a list of your Kindle contacts) and send off your note and sample with an easy-to-click invitation for your friend to buy the title that you recommend.

Since Amazon already established an affiliate account for you and your Kindle (see above), it would be easy for Amazon to pay you an affiliate fee whenever your recommendation results in a purchase by the friend you’ve contacted. Or, better yet, let Amazon split the affiliate fee so that 5% each goes to you and your friend.

Customer Experience: An idea like this one is bound to optimize the Kindle’s astonishing potential for putting readers into contact with each other and with authors or publishers whom they wish to follow. The same things that customers enjoy about the recommendation features of the main Amazon site would be made even more seamless for Kindle owners. Meanwhile, it’s yet another means for voracious readers to help defray their Kindle and Kindle Store expenses.

Likelihood of Adoption (on a scale of 1 to 10): 9. This one synchronizes chapter and verse with Amazon’s signature marketing and customer experience strategies. It would also easy for Amazon to protect Kindle owners from spamming abuses of the feature by requiring that such messages originate from a Kindle and allowing Kindle owners to block particular senders.

Click here to read The Golden Age of Kindle 2.0 and Beyond — Part 1