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Will the forces killing the newspaper today also hurt Amazon.com?
This link made me think of the question:
http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/
Amazon has a so-far successful new model for e-books. The Kindle. It's cool because it improves the readability of electronic monitors. Kind of reads like a book.
I just wonder if it will succeed long term. If we are a book author, do we really need Amazon.com to be the gatekeeper? Sure, they provide DRM. But will DRM for books really work?
For now ONLY the Kindle allows you to electronically read without eyestrain. So you might be willing to pay $10 for an e-book that costs <$0.01 for Amazon to distribute. You may even be willing to pay a subscription to a blog's RSS feed to access Kindles' cool hardware. For now...
But once there are other devices like the Kindle, won't you feel that their markup is too high? That their "service" is an attempt to wall a garden that the Internet provides free (to those connected)?
I think Amazon is smart to try and invest in a technology that might hurt them long term. Better to lead than let someone else be ahead of them in this technology... Maybe they will find a way to tame the beast that is coming in a way that Newspapers have not. But maybe not. Their largest business may one day become cloud computing.
http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/
Amazon has a so-far successful new model for e-books. The Kindle. It's cool because it improves the readability of electronic monitors. Kind of reads like a book.
I just wonder if it will succeed long term. If we are a book author, do we really need Amazon.com to be the gatekeeper? Sure, they provide DRM. But will DRM for books really work?
For now ONLY the Kindle allows you to electronically read without eyestrain. So you might be willing to pay $10 for an e-book that costs <$0.01 for Amazon to distribute. You may even be willing to pay a subscription to a blog's RSS feed to access Kindles' cool hardware. For now...
But once there are other devices like the Kindle, won't you feel that their markup is too high? That their "service" is an attempt to wall a garden that the Internet provides free (to those connected)?
I think Amazon is smart to try and invest in a technology that might hurt them long term. Better to lead than let someone else be ahead of them in this technology... Maybe they will find a way to tame the beast that is coming in a way that Newspapers have not. But maybe not. Their largest business may one day become cloud computing.
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I own two second generation Kindles since the week they came out, and had owned a first generation device for about 7 months prior. Here are a few things that a lot of people are missing whenever the Kindle is mentioned:
1. $359 looks like a lot of money until you take into account that it has prepaid 3G mobile internet for as long as the device works. The data plan for the iPhone 3G is $30 PER MONTH, that's $360 per year. That means that in just one year, I have paid (yes, I got two iPhone 3Gs) enough on 3G service on just one of my iPhones to cover the price of one Kindle. Of course, Amazon is getting some kind of volume discount from Sprint, but I wouldn't be surprised if the device itself costs about $150, and the difference is made up with the internet service.
2. DRM: Apple had DRM for a long time, and they barely started backing down from it. Notice that it did not hurt them, they own the portable music player market even without DRM. Everyone knows what an iPod is. I would not be surprised if in a couple of years Amazon turns off the DRM on the Kindle, same as Apple did.
3. The Kindle doesn't force you to get all your books from Amazon. A LOT of people freak out over this, and for no reason. You are free to put whatever you want into your Kindle, as long as it it is either a DRM-book bought from Amazon, or a non-DRM'd book found elsewhere. You can even make/convert your own for free. What Amazon doesn't want you to do is to buy DRM'd books elsewhere, they want to be the only ones selling that kind of book for the Kindle.
Here's what is going to happen:
1. In less than two years, you will be able to buy a subsidized Kindle. You'll pay very little for it because it will come with some kind of subscription service for a magazine or newspaper.
2. In less than two years, you'll be able to buy an untethered Kindle that can't access whispernet, you will have to buy a 3G data service from a cell phone company. It will probably be an empty gesture because these will cost more, but maybe some wireless company gets smart and offers a discounted plan with a monthly cap. After all, not all of us use our Kindles to surf the web.
3. In about 5-6 years or so, Amazon is going to drop DRM. They'll make a big dog and pony show, the same way Apple did, about people hating DRM and having to give people what they want, then charging a few cents more per book, then allowing you to "upgrade" your books to non-DRM for a few cents.
4. The Kindle will follow the same release cycle as the iPod product line. We'll see enhanced models every year or so, but the price will mostly remain stuck.
Will Amazon get hurt on the long run? Not really, they are already the leaders of the book market. Everyone else follows them. The Kindle allows them to sell books at an even lower cost than before. It costs less to host a file and deliver it, with an associated credit card transaction, than what it costs to fulfill a book sale, have it packaged and thrown in the back of an UPS truck.
Amazon doesn't master the books, publishers do, and adding books to the Kindle book store is self service, so it costs Amazon just whatever it costs to run the Amazon Digital Text Platform website. The publisher uploads the book and product description, sets prices and Amazon takes care of charging credit cards and delivering digital copies. Compare that to a newspaper struggling with the costs of buying paper and ink, printing, transporting, etc.
1. $359 looks like a lot of money until you take into account that it has prepaid 3G mobile internet for as long as the device works. The data plan for the iPhone 3G is $30 PER MONTH, that's $360 per year. That means that in just one year, I have paid (yes, I got two iPhone 3Gs) enough on 3G service on just one of my iPhones to cover the price of one Kindle. Of course, Amazon is getting some kind of volume discount from Sprint, but I wouldn't be surprised if the device itself costs about $150, and the difference is made up with the internet service.
2. DRM: Apple had DRM for a long time, and they barely started backing down from it. Notice that it did not hurt them, they own the portable music player market even without DRM. Everyone knows what an iPod is. I would not be surprised if in a couple of years Amazon turns off the DRM on the Kindle, same as Apple did.
3. The Kindle doesn't force you to get all your books from Amazon. A LOT of people freak out over this, and for no reason. You are free to put whatever you want into your Kindle, as long as it it is either a DRM-book bought from Amazon, or a non-DRM'd book found elsewhere. You can even make/convert your own for free. What Amazon doesn't want you to do is to buy DRM'd books elsewhere, they want to be the only ones selling that kind of book for the Kindle.
Here's what is going to happen:
1. In less than two years, you will be able to buy a subsidized Kindle. You'll pay very little for it because it will come with some kind of subscription service for a magazine or newspaper.
2. In less than two years, you'll be able to buy an untethered Kindle that can't access whispernet, you will have to buy a 3G data service from a cell phone company. It will probably be an empty gesture because these will cost more, but maybe some wireless company gets smart and offers a discounted plan with a monthly cap. After all, not all of us use our Kindles to surf the web.
3. In about 5-6 years or so, Amazon is going to drop DRM. They'll make a big dog and pony show, the same way Apple did, about people hating DRM and having to give people what they want, then charging a few cents more per book, then allowing you to "upgrade" your books to non-DRM for a few cents.
4. The Kindle will follow the same release cycle as the iPod product line. We'll see enhanced models every year or so, but the price will mostly remain stuck.
Will Amazon get hurt on the long run? Not really, they are already the leaders of the book market. Everyone else follows them. The Kindle allows them to sell books at an even lower cost than before. It costs less to host a file and deliver it, with an associated credit card transaction, than what it costs to fulfill a book sale, have it packaged and thrown in the back of an UPS truck.
Amazon doesn't master the books, publishers do, and adding books to the Kindle book store is self service, so it costs Amazon just whatever it costs to run the Amazon Digital Text Platform website. The publisher uploads the book and product description, sets prices and Amazon takes care of charging credit cards and delivering digital copies. Compare that to a newspaper struggling with the costs of buying paper and ink, printing, transporting, etc.
Your question talks about newspapers, but you talk about books in the body of your question. Some thoughts...
I've heard the Kindle is NOT a good reader for newspapers. Newspapers are decidedly NOT linear and the Kindle is geared towards linear book reading. There needs to be another solution.
As an author myself, PLEASE consider that the price Amazon or ANYONE charges also pays the author. Typically, the author is paid a percentage of what someone pays for the book. It might be cheap for a book to be distributed, but the author (and other middle men) have to be paid as well. Distribution is NOT the only piece of the pie once a book is published.
I don't think the Kindle will hurt Amazon's business at all. Any business (like newspapers) that holds desperately to their business model and doesn't branch out into new realms is destined to die. Amazon is trying new things and trying to make more business models for long-term growth.
I've heard the Kindle is NOT a good reader for newspapers. Newspapers are decidedly NOT linear and the Kindle is geared towards linear book reading. There needs to be another solution.
As an author myself, PLEASE consider that the price Amazon or ANYONE charges also pays the author. Typically, the author is paid a percentage of what someone pays for the book. It might be cheap for a book to be distributed, but the author (and other middle men) have to be paid as well. Distribution is NOT the only piece of the pie once a book is published.
I don't think the Kindle will hurt Amazon's business at all. Any business (like newspapers) that holds desperately to their business model and doesn't branch out into new realms is destined to die. Amazon is trying new things and trying to make more business models for long-term growth.
Amazon is leveraging the success that they have had in a tangible way, the Kindle. This is a very smart move.
In one fail swoop, Apple released the iPod and iTunes music store to become the single largest point of distribution for legal digital audio online. The model is protected from competition through the innovation of Apple's iPod and dominates the market by providing a huge catalog of high quality audio for reasonable prices.
Amazon is the largest online distributor of books. They're following Apple's lead to become both the distributor of the content AND the device to "play" that content. It's a somewhat risky move but if they do it right (and they have been), then they will have the same level of dominance in digital written content as Apple does with audio.
Organization is the key to digital media distribution. The "gatekeeper" as you refer to it is simply a standard organized body that is currently "in charge" of providing the content and authorizing playback devices. This methodology is the solution to long standing problems in failing DRM techniques. The "gatekeeper" could be any governing body, including (hopefully some day) an open consortium of authors, publishers, government officials, etc. If this governing body was made up of equal voting members who all had the rights and desires of consumers in mind, many digital media problems would vanish.
Amazon, Apple and others are leading the way with this line of thinking. Hopefully folks will catch on to this solution before the media industries implode.
I've answered a couple of questions in this vein before. For more information, check them out:
http://www.mahalo.com/answers/music/what-is-the-future-business-model-of-the-music-industry
http://www.mahalo.com/answers/movies/wolverine-movie-streamingtorrent
In one fail swoop, Apple released the iPod and iTunes music store to become the single largest point of distribution for legal digital audio online. The model is protected from competition through the innovation of Apple's iPod and dominates the market by providing a huge catalog of high quality audio for reasonable prices.
Amazon is the largest online distributor of books. They're following Apple's lead to become both the distributor of the content AND the device to "play" that content. It's a somewhat risky move but if they do it right (and they have been), then they will have the same level of dominance in digital written content as Apple does with audio.
Organization is the key to digital media distribution. The "gatekeeper" as you refer to it is simply a standard organized body that is currently "in charge" of providing the content and authorizing playback devices. This methodology is the solution to long standing problems in failing DRM techniques. The "gatekeeper" could be any governing body, including (hopefully some day) an open consortium of authors, publishers, government officials, etc. If this governing body was made up of equal voting members who all had the rights and desires of consumers in mind, many digital media problems would vanish.
Amazon, Apple and others are leading the way with this line of thinking. Hopefully folks will catch on to this solution before the media industries implode.
I've answered a couple of questions in this vein before. For more information, check them out:
http://www.mahalo.com/answers/music/what-is-the-future-business-model-of-the-music-industry
http://www.mahalo.com/answers/movies/wolverine-movie-streamingtorrent
voted helpful: nushka
I think that the kindle is the device of the future. There will be other devices that compete with it, but the kindle will remain the leader. Amazon has the right business model for the times. I think that the distrust in ebay has led people to move in droves from that site to Amazon.
If you want to create content check out this site.
https://www.createspace.com/
This is the wave of the future.
If you want to create content check out this site.
https://www.createspace.com/
This is the wave of the future.
I think the Kindle is a smart device. I used the Kindle and it was easy to use. User want a device that it simple, easy to download content, and doesn't require complex and expensive subscriptions.
I'd like to see a touch screen and voice recognition added to Kindle in the next five years. I like the idea of having the Kindle read to me in the car and having the ability to issue voice commands for navigation and book marking.
I'd like to see a touch screen and voice recognition added to Kindle in the next five years. I like the idea of having the Kindle read to me in the car and having the ability to issue voice commands for navigation and book marking.
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$360 for lifetime free mobile internet access would be a steal, if that's what you really were getting.
I have used it for Wikipedia, Gmail, Google Reader, Twitter and even to update my blog. It is not Chrome, but it is good enough to run the Javascript version of Gmail.