Ebook Pricing

It seems everyone has an opinion about the high price of the Kindle itself but there's not a lot of discussion about ebook prices. Perhaps once you choke down $400 for the device just about any book price seems OK.

I came across this insightful post about pricing on the Digitalist blog. The simple fact is that most consumers are likely to balk at an ebook price that's the same or very close to the price of the same book in print. Publishers and authors certainly want to protect the value of their intellectual property but consumers will immediately point out that the cost of goods has essentially disappeared with an ebook.

What to do? If you're a publisher you need to think about what other features and services you can add to that ebook. Perhaps Amazon will serve as a vendor for add-on services for the Kindle down the road. If not, maybe the publishers or some other enterprising organization will be there to fill the void.

As Sara Lloyd notes in that Digitalist post:

I think there’s a very real risk that publishers price themselves out of the market altogether, allowing new, tech-savvy companies to move into the content delivery space, develop a pricing model that appeals to consumers, develop direct relationships with authors on the one hand and consumers on the other, and wipe the floor with all the traditional players.

Sounds an awful lot like The Innovator's Dilemma to me...

What Did the Kindle Prototype Look Like?...

Everybody has an opinion about the Kindle's physical design. Granted, it's far from anything Apple would produce, but I tend to think Amazon did a fantastic job, particularly when you consider the original Kindle prototype. Click here to see a picture of what the Amazon engineers originally had in mind...

Kindle Printing

The Kindle News blog raises a good question in this post. In short, why is printing content from a Kindle such a clumsy process? My guess is this has to do with content protection and a limited feature set in Kindle Version 1.0.

On the content protection side, perhaps Amazon didn't want to scare off publishers and authors by making the content so easily reproducible. Then again, in this day and age, it's hard to imagine a laser printer being that big a threat. Regardless, I'd like to think this is something Amazon will make more customer friendly down the road.

Speaking of which, they had to draw the line somewhere for this first product. Like any other new gadget, there was probably a lengthy list of additional features they just couldn't get to or couldn't afford to incorporate in the first generation Kindle. Wouldn't it be nice one day though if a future version would let you plug your printer's USB cable into the Kindle's USB port so you can print directly from the Kindle, without the need for a computer in between? (Btw, be careful what you wish for as this would add another layer of complexity to the Kindle: Amazon would have to make sure all the zillions of printer drivers out there will work with their product.)

Is Kindle Losing Momentum to Sony Reader?

Google Trends is one of my favorite tools. It lets you compare phrases to see which one is being searched most frequently in Google.

I got curious earlier today and decided to compare "amazon kindle" with "sony reader." I expected to see a major spike last November in the former and a flat line for the latter. Here's a link to the results. What do you notice?

There's definitely a spike for the Kindle and it's interesting to see how Sony benefited from that surge as well. But what's most interesting to me is how the Kindle's rate has dropped so significantly in such a short period of time and now the Sony line sits above it. Granted, the gap between the two has narrowed in the past few weeks, but still... With all the sizzle and visibility the Kindle has garnered, I was very surprised to see Sony ahead on searches.

I've got to believe the out-of-stock situation is what's killing the blue line in this graph. People are getting more impatient and I wouldn't be surprised to hear that some are going with Sony instead. As the saying goes, you only get one chance to make a first impression, so I hope Amazon can fix this inventory situation soon; it's hard to imagine they'll get as much buzz down the road and this graph makes it appear that they're squandering the current opportunity.

Bethanne Patrick Likes Her New Kindle

My favorite blogger at Publishers Weekly, Bethanne Patrick, talks about her initial reaction to her Kindle in this post. The bottom line: She likes what she sees. The reading experience is very pleasant and the Whispernet service is extremely convenient and reliable. Sure, the device itself looks like something from the ColecoVision era, but hey, it does what it needs to do...which got me to thinking...

I'm about as far as you can get from being an Apple/Mac fan. I admire Apple's product line and I tip my hat to their design prowess, but I don't buy a gadget to look at it. I buy it for what it does, not for what it looks like. I have the cheapest MP3 player on the planet but it sounds every bit as good as any other high-end device I've ever listened to; plus, it's expandable via an SD card slot and is tiny enough to fit very comfortably in my shirt pocket. What more could I ask for?

So when it comes to an e-book reader, I guess I don't care so much what it looks like as long as it makes it easy to obtain and read content. Period. I don't care if Kindle 2.0, 3.0 and beyond all look just like Kindle 1.0, but I sure hope the price comes down and the feature set expands in future versions.

Polymer Vision's Readius

Add another player to the e-book device market. Polymer Vision recently announced their new Readius product, a combination cellphone and e-book reader. Wired's Gadget Lab blog was less than complementary in their initial assessment.

The big question for me has to do with service and title availability/access. Amazon appears to be setting the standard with their approach. Granted, the title list remains small and is only a tiny percentage of Amazon's print inventory, but it's highly likely to grow by leaps and bounds in the coming months. The Readius offers an interesting form factor but it all comes down to breadth and depth of content as far as I'm concerned.

Then again, if Amazon were to ever open their model up to support third-party readers, well, the Readius might be an interesting alternative to the Kindle...

What About Books with CDs?

That's the question P. Reitz asks here on the Kindle Forum. It's a problem we publishers have been trying to deal with in the print-on-demand (POD) world as well. Plenty of books in the print world have an accompanying CD. That CD might have videos, content snippets or other ancillary materials; the CD content is usually a pretty important element of the entire book/CD package. So what do you do in the POD or Kindle world?

Unfortunately I don't think anyone has come up with the perfect answer to this question. Ideally a publisher could create a website that's nothing more than a server hosting all the companion CD content for all the books they've published. Buy the POD/Kindle edition and go to the site to download the CD materials. Pretty simple, right?

Two challenges exist with this solution. First of all, you have the customer authentication step. The publisher probably only wants to allow paying customers to access the companion CD content. We've used random questions like "what's the 5th word on page 153" to authenticate customers in situations like this but it's far from foolproof (although probably "good enough" for this use).

The bigger challenge is licensing rights. Most publishers don't own the content they distribute on CDs; they license it from the content owners. The distribution agreements most publishers have signed with these third-party content owners typically only include redistribution rights for CD distribution. They don't include the rights to distribute the materials online. The thought of going back and getting all new agreements signed to allow publishers online distribution rights isn't too appealing. It's a time-consuming effort and likely to result in something less than a 100% success rate.

So, before you buy that next Kindle or POD edition of a book, be sure to check and see whether the print edition includes a CD and if you'll have access to those materials with your Kindle/POD edition.

A Hybrid Book

I'm a big fan of getAbstract's book summary service (see my initial review here). I recently tried their audio option and was very pleased with the results. That got me thinking...

My eyes have a limit when it comes to reading text; even in the best conditions they tend to tire out after a couple of hours. Wouldn't it be cool if the book you just purchased for your Kindle was a hybrid, offering you the option of reading it yourself or having it read to you by someone with a nice, pleasant voice?

Since the Kindle is already much more sophisticated than a simple MP3 player, why not design this feature so that the audio and written words are in sync? You read for a couple of hours and your eyes get a bit tired, so you press a button to switch to audio. The Kindle knows where you left off and it starts reading to you, at the top of the page where you left off. Maybe 10 or 20 minutes of this audio is all you need to give your eyes a good rest. You open them back up and the Kindle displays the page that's currently being read to you. You press the button again, the audio stops and you resume reading.

Now that's a feature that would make a Kindle edition of a book more attractive to me than a print edition! I'm hoping a service like this finds its way into a future version of the Kindle.

The Electronic Rights Challenge

Amazon and their publishing partners are no doubt up to their ears in the content conversion process for the Kindle. Although many Kindle owners are disappointed with the limited title selection to date, another issue exists that is likely to plague the system for quite awhile: Who owns the electronic rights to certain titles and are these owners going to exercise those rights so that the books will be available for the Kindle?

Here's a link to one frustrated customer's comments on the Kindle forum. While most publishers today work to secure e-content rights in author agreements that wasn't always the case. There are also plenty of deals being signed right now that don't include e-content rights; for one reason or another, the author or agent involved would prefer to exercise the e-rights on their own or with a third party, someone other than the print content rights.

The result is that there will always be gaps or, at best, delays with e-book availability on certain titles. It's not a perfect system, but hopefully as Kindle ownership and use becomes more widespread e-content owners will be more interested in making their titles available in a timely manner.

A Cheaper Device Is Only Part of the Formula

Brier Dudley writes a tech blog for The Seattle Times and he made this recent post about his trip to the CES show in Las Vegas. The post features a picture of what is apparently an upcoming e-book device from Sungale, a Chinese manufacturer. Brier points out that Sungale is known for their cheap DVD players and that this e-book device is likely to be very inexpensive as well.

I like the idea of more e-book device competition, but cheaper hardware is only one part of the optimal formula. Sure, I'd love to see the Kindle for $200 and I tend to think it won't be a mass market success until it gets below $100 (more on that in a moment), but the eventual leader in this space will have two other key attributes: breadth of content and outstanding service.

The list of titles available for the Kindle will grow by leaps and bound in the coming months. I have no doubt Amazon will put as many titles into this format as they can; they're the king of title breadth/depth in the print world, so why wouldn't they be on the same track for the e-book world? And when it comes to service, Amazon is very, very hard to beat. I still think that's the primary reason why Kindle remains out of stock: Amazon wants to test their systems with a limited number of devices in circulation before they open it up for a larger audience. They realize they'll probably only have one chance to get this right and a network glitch would forever stigmatize the Kindle, so I applaud their efforts to limit distribution (for now). When it comes to content breadth and outstanding service it's hard to go wrong with Amazon. (Btw, I don't work for Amazon...I'm just a huge believer in their operation.)

Back to the sub-$100 opportunity... The underlying technology is always going to dictate how low Amazon can price the Kindle. As long as there's only one e-ink technology provider we're probably faced with higher manufacturing costs than anyone would like to see. But, there's nothing stopping Amazon from adopting a razor/blade approach to Kindle and giving customers a discount on the device as long as they commit to a minimum number of book purchases in the future. It would require some careful negotiations with publishers, of course, but it could be done. Supply and demand will ultimately dictate this though. As long as Amazon is out of stock or at least exceeding their sales expectations, there's no incentive for them to get creative on hardware pricing.

Mike Shatzkin's Ebook Predictions

Mike Shatzkin wrote this very interesting article for Publisher's Weekly featuring his "15 Trends to Watch in 2008." Item #1 will be of particular interest to Kindle fans as he starts his list off with some noteworthy statements about the ebook market and the Kindle in particular.

First off, he predicts that Kindle books will outsell Sony Reader books by more than 2 to 1. I tend to think this is a fairly safe bet, assuming Amazon gets more units in stock and can satisfy demand. Shatzkin goes on to say that "by year end, nearly every straight-text title published with commercial intent will be available for Kindle." That would be impressive, especially considering how few are available today.

He also points out that "Kindle pricing will drive the market." That's the beauty of being Amazon, and soon, the leader in this space. Amazon is undoubtedly studying sales data and analyzing their current pricing model. Assuming publishers get on board, I would also anticipate a slew of interesting pricing experiments in the future including clubs, cluster discounts (e.g., "3 for 2") and hopefully subscriptions as well.

Shatzkin closes this first point by saying that ebooks will still only represent about 2% of total book sales, despite the projected growth rates. That's a safe bet as well, at least until Amazon can turn the Kindle into a true mass market product.

Ebook Rentals

This post over the weekend on the Kindle News blog asks an interesting question: Why not rent-a-book for Kindle/Sony? If it makes sense for the movie industry one could argue the model would also work in the book world.

The lone comment made on this post asks the million dollar question: What price would you use? If a rental model dramatically expands the audience it's easy to see where authors and publishers might get excited, assuming the rental price makes sense. I'd like to take it a step further: Why not add an affiliate component so that if I rent a book and like it, I tell my friends and if they rent it as well I get a small cut of their transaction. This creates a nice incentive to tell your friends and make it more viral. A Facebook app like iRead could leverage this sort of approach, for example.

But it all comes down to making the numbers work, right? If the rental price is low the audience needs to be huge. It's also likely to be less useful for a reference guide than a novel, of course, but definitely worth consideration as the market for e-readers grows.

TheStreet.com's Kindle Review: "Wait for the sequel"

Gary Krakow of TheStreet.com offers up this review of the Kindle, including a video review as well. Like many others, he suggests waiting for the next generation, citing both price and functionality. He also has a beef with the Kindle's navigation features, which could be easily addressed in the next version as well.

Kindle as Book Beta Testing Device

I think author Daniel Oran is onto something. He's at the beta stage with his latest novel, Believe, and decided to offer it to Kindle owners for 99 cents. The goal: To get customer feedback before he moves the novel from beta stage to final release stage.

What a great idea! Many author have wanted to obtain pre-publication feedback like this in the past and have struggled for the right forum. Some have used the Internet. Others have sent out PDFs. No solution is as simple and elegant as what Oran is doing with Believe though. For the ridiculously low price of 99 cents you can have the beta book loaded on your Kindle in seconds.

Then there's the PR angle. If enough blogs and other news sites pick up on Oran's efforts he benefits from a lot of free online buzz. For example, I see the Read Write Web has already picked up on it in this post.

On top of all that, Oran is donating all his proceeds from the beta book effort to a charity called the Neediest Cases Fund. Brilliant!

What Kindle Developments Can We Expect in 2008?

Mike Elgan of ComputerWorld refers to it as a mystery and asks a boatload of questions about the Kindle in this blog post. One of Elgan's questions is "How many Kindles have been sold?" That seems to be a pretty popular question -- Fran Toolan tells me that this same question is the #1 incoming search phrase leading visitors to his blog.

There's plenty of curiosity, that's for sure. Librarians are also jumping into the fray. Here's a story about a New Jersey library that ordered two Kindles to loan to their patrons. The loaner period is limited to a week so you better be ready to read quickly. I'd be too worried that the darned thing would break during my week and I'd be on the hook for the replacement cost; it will be interesting to see how rugged and durable Kindle Version 1.0 turns out to be for applications like this.

Speaking of Version 1.0, I'm still way more interested in 2.0 and beyond. I think Amazon has only scratched the surface of what's possible with this sort of device and I'm excited to see how the Kindle will evolve in the coming years.

This reminds me of one of my favorite YouTube videos of all time. If you haven't seen it already, watch this entertaining video of what it was like when "Book Version 1.0" first hit the scene.

Happy New Year!