Wednesday, February 11, 2009

Kindle 2.0

By Joe Moore

We've discussed the Kindle e-book reader a number of times here in the past. Even though its market penetration is still modest at best, I think everyone admits it is or will be a factor in the future of publishing. So with 230,000 titles (including mine) available for downloading onto the Kindle, it's probably worth discussing again now that the product has some significant upgrades.

Recently, Amazon introduced the new Kindle 2. Some of the features in the updated version are a battery kindle2 that will last two weeks, more contrast on the black-and-white screen than the previous version, faster wi-fi connections, more memory, a smaller size that weighs less than the previous device, more storage (1,500 books rather than the current 200) and a speaker with a new function that reads the text aloud. Also, Stephen King’s new novella UR will be available exclusively on the new Kindle. The latest device costs the same as the old Kindle: $359.

The new "Text-to-Speech" audio function has raised some concern with the Authors Guild who stated that it must be considered an “audio right”, but Amazon said that customers would not confuse text reading with an audiobook. (Note: this is not the same as an audiobook where a professional talent is paid to read the story in a dramatic fashion.) I haven’t heard it but I assume it's done using a synthesized voice perhaps like a dashboard GPS.

Another issue that was raised is the price of e-books for the Kindle: $9.99. Some publishers feel that the price is fine since they are investing in a lot in costly digital technology. And some say that e-books should not be considered of less value than the paper version and assume they would cost less.

With e-books being a very small (less than 1%) portion of book revenue, it would seem to me that having them at a reduced price would encourage buyers to venture into the e-book domain. But I'm sure that publishers don't want to give up revenue in these hard economic conditions.

So, with the upcoming availability of the new Kindle 2, my questions are: Is it smart of Amazon to price the product the same as the older version? Or should it be priced cheaper than the 1.0 version even with the added features? And is $9.99 a fair price for e-books or should they be sold for less than say the mass market PB version of the same book?

8 comments:

  1. There have been some lively (and sometimes heated) discussions about e-books in some writer's groups I belong to. I see e-books as being a tool in the tool box of the modern picture that is emerging for the publishing industry. You go into the Kindle chat rooms, and people really love their Kindles. But you're right, Joe. That's a hefty price point when the stock market is tanking. It may leave a bigger opening for the other players--iPhone, RocketBook, Sony Reader, Cybook. Time will tell! I guess the market will shake itself out on this. Meanwhile, as an author, I'm wondering how we track Kindle sales or any kind of e-book sales for that matter.

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  2. And by the way, I've read in PW that Amazon is now restricting e-book sales to their proprietary formats http://www.publishersweekly.com/article/CA6631991.html

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  3. I don't know about what they SHOULD do, but I'll bet they are expecting that, like a lot of technology, they will eventually be priced much lower than that $359, so the only revenue for them will come from that $9.99 per book.

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  4. I love e-books, but there is no way I'm paying that price point. My paperbacks run between 5-8 bucks. Why should I pay more for a product which the publishing house doesn't have to pay print costs, shipping costs or warehousing costs on? Make them the same price as mass markets and there is still a lot of margin for profit and they become much more desirable. At that price and the $359 of the ebook reader itself...I'll stick with my dead tree copies, thanks.

    Jana

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  5. This whole deal with e-books and the Kindle is interesting to watch. I believe that as long as Amazon maintains a strictly proprietary format for their product sales of Kindles and e-books in general will never take on mainstream numbers.

    Much like how the proprietary world of computing never exploded on the world until PC's opened themselves up to affordable standard off the shelf machines.

    Because of that open source architecture PC's are now a common household item (hence us having this conversation via home computers).

    Likewise as long as Amazon keeps their format closed and equipment expensive they will never really pierce the market in any significant way.

    Open it up to multiple formats and they could probably justify charging a steep price for the hardware since readers could get pdf files or other formats from anywhere on the web and thereby think they are saving money by getting free or cheaper books.

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  6. Joe
    I haven't 'kindled' yet and am still probably going to wait until the price point drops further. I think it's fair enough that people will stick to a paperback if they cost about the same as an e-book. The price probably needs to come way down before the e-book market takes off.

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  7. Thanks for the feedback, everyone. I think Basil really touched on a major drawback with Amazon deciding to approach this as a proprietary format just as Apple did so many years ago. I'm sure they have marketing gurus much wiser than all of us, but it just seems like the wrong way to go with a product that is so pricey. We'll see how it all falls out.

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  8. Actually, the Kindle price of a MMP is a few dollars cheaper, usually $5 as opposed to $7 or $8 (based on the Kindle versions of my books). I love my Kindle-although now that they've rolled out the thinner version, I have serious gadget envy, would love to have the newer one. I think it'll be like the iPods, in a few years Amazon will have a variety of options at different price points, differentiated by size and memory.

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