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Amazon deserves massive kudos
for singlehandedly transforming the moribund market for eBooks
and growing it to a viable and sustainable key element of all
future book publishing and distribution.
For a company with no
background in hardware design or manufacture, their first
Kindle, released in Nov 2007, was a good first effort.
Not content to rest on their
laurels, the Kindle has undergone several transformations, as
well as massive price reductions.
The new Kindles are worthy
successors to the ones they now replace, and at extraordinarily
exciting price points.
Introduction - the Original
Kindle and its Evolution
It is less than four years
since Amazon announced its first ever eBook reader, the Kindle,
on 19 November 2007.
At the time of its
announcement, eBooks were, to be brutal, a several times failed
concept that occupied nothing more than a footnote to the major
realm of publishing books on dead trees.
Sony had an eBook reader,
which languished unloved as a marginal secret in their product
range since its release in late 2006.
Even if one were to
uncover and buy their eBook reader, there were very few titles
available to read on it back then - about 10,000 (to put that in context,
the
local Barnes & Noble store has 160,000 titles on their shelves)
prior to the appearance of the Kindle.
Worse still, not only
did an eReader cost something north of $300 to buy, but the
limited selection of titles were overpriced, often costing more
than the same book would cost in a regular print form.
Add all this up and it is
unsurprising that eBook readers were far from mainstream.
Amazon's original Kindle was
vaguely similar to the Sony product, using the same eInk screen.
Eink was - and still is - a major factor in the practicality of eBook
readers.
It provides a black and white screen that uses no
battery power to display an image - the batteries are used only to
change the image on a page. This allows for an extended
battery life - more than enough to read a book or two on a long
flight or two.
The original Kindle was priced at - wait for it - $399 -
but even at that high price (and this is back in 2007, too)
Amazon couldn't sell them fast enough, with a flood of early
adopting gadget lovers responding excitedly to Amazon's attempt to create a
new sustainable market for eBooks.
The first production run of
the Kindle was sold
out within 5.5 hours of its initial release announcement, and it
remained in a constant state of back-order for almost six months (at
which point Amazon eased the price down to $359, spurring still
more demand).
The 'Secret' of the Kindle's
Success
The real 'secret sauce' of the
Kindle was not just its unremarkable hardware, and neither was it
the massive marketing push given to it by Amazon. Perhaps
the most important factor was the
range and cost of its eBooks available to be read on the device.
Increasing numbers of books
available
At the time of release, there were 90,000 titles available
(compared to 10,000 on the Sony device) and this
number rapidly climbed ever upwards. Within a year it had grown to
200,000 titles, and in another 18 months it was over 400,000
titles.
At the present time (Sep 2011) Amazon is claiming over
800,000 titles at prices below $9.99 and more than one million
titles in total.
Which leads to the second
ingredient in Amazon's secret sauce - the pricing of the
eBooks it sold.
Fair prices for eBooks?
Amazon's commendable initial policy was that
no books would be sold for more than $9.99, and as part of its own
investment in the eBook concept, on many occasions it would sell
titles at a loss in order to maintain an inventory of desirable
titles and at a desirable price point.
Strangely, the book publishers
objected to this. There's an entire story or three in the
appallingly slow and dysfunctional way that traditional book
publishers are failing to adapt to the new eBook medium, with an
increasing danger that rather than embrace the new channels of
distribution and new formats for eBooks, their stubborn resistance
against the new world of books will see them marginalized and
obsoleted.
The publishers insisted that
Amazon observe their official
recommended mandatory prices for books, and after some high
stakes negotiating in public, where variously publishers dropped
Amazon and Amazon dropped publishers, Amazon acquiesced and so
many newly released titles that are also published in hardcover
format have ridiculously excessive prices similar to the cost of
the hardcover book.
eBook Sales Skyrocket
Amazon's very
aggressive push - nothing less than a complete corporate commitment to an eBook
future - has been outstandingly successful, with the market share
belonging to eBooks leaping upwards as is vividly displayed in
this graphic, taken by Engadget at the product release event in
New York.
Since the release of the
original Kindle, Amazon has come out with several newer models
with greatly improved design, and with Wi-Fi connectivity instead
of (or as well as) wireless connectivity.
Falling Prices of Hardware
Even though the cost of the
books have remained steady, or in some cases increased, the prices of the
readers have
been dropping.
Perhaps if Amazon can no longer subsidize
the cost of books, it has decided to instead subsidize the cost of
the readers - a strategy which makes sense and which of course is
mirrored in the cell phone industry where phone handsets are
subsidized in return for the income the wireless co expects to
receive over the life of a two year contract.
In Amazon's case, there is slightly more risk involved, because people who
buy an eReader are under no obligation to then buy any books to read on them.
On the other hand, with the Kindle and Fire readers being restricted to
primarily reading Amazon's own proprietary format of eBooks, Amazon can probably
safely gamble that few people will buy a reader and then not buy books to go
with it.
This gamble however may be slightly more at risk with the new Fire eReader,
because it is an Android based tablet. It remains to be seen how open its
architecture will be and how easy it will be to load other apps onto it,
extending it into other areas of use completely unrelated to book reading.
Indeed, wouldn't it be amusing if it proved to be possible to download the
Barnes & Noble Nook eBook reader Android app and then use Amazon's Fire to read
eBooks bought from B&N.
New ways to subsidize the Fire
Although there might seem to be a small amount of extra risk on Amazon's part
in terms of subsidizing the Fire, there is also an entire new dimension of
possible income, too. The Fire is also capable of playing video (oh yes,
audio too) and Amazon's growing library of streaming video can be played on the
Fire, including now some 11,000 movies and/or television episodes offered on an
unlimited all for free basis to its Prime members (people who pay $79 a year,
originally for free second day shipping on all orders and discounted overnight
shipping, but now who also receive this major video streaming benefit too).
In addition to video, the color capabilities also lend
themselves to magazine publication, and Amazon is offering a
substantial range of magazine subscriptions for the Fire as
well.
In 2010 Amazon introduced an interesting new concept as a
further way of subsidizing (and monetizing) its Kindle eReaders.
Purchasers now have the choice of a regular Kindle or one which
features advertisements on its 'standby' screens. No ads
appear while reading books, but they do when not reading books, so the
advertising does not interfere with the book reading experience at
all.
In return for accepting this minimal advertising, the
price of the Kindle is reduced by either $30 or $40.
The new release of products in September 2011 saw not only
lower price points than ever before, but also a reduction on the
existing Kindles too (their main claim to fame being they have
physical keyboards).
For the first time ever, it is possible
to now get a Kindle for under $100 if you'll accept the
advertising option. (the Kindle Keyboard is now $99, down from
$114 previously, and the new entry level Kindle with no keyboard
is a mere $79).
Read more about the Kindle eBook Readers
This is the first of a three
part article all about Amazon's new Kindles and Fire.
Please click on to read parts two and three :'The
Four Different Models Compared' and 'Fires
& Kindles compared to Nooks and iPads'.
Please also visit our subsequent
hands-on review of the Kindle Prime.
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Originally published
28 Sep 2011, last update
30 May 2021
You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.
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