Four Ways Amazon Could Make Kindle 2.0 a Best Seller

10/3/08Follow @wroush

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creative marketing possibilities opened up by digital distribution. Commendably, Amazon gives Kindle users a try-before-you-buy option: the first chapters of most Kindle editions can be downloaded free. But here are some more radical ideas, any one of which would get me more interested in the Kindle platform:

Book subscriptions. The book-of-the-month club model was successful in the print publishing world for decades. Audible.com has stayed in business for 10 years now, charging $22.95 for a monthly subscription that gets you two audio book downloads per month. If I were Amazon, I’d charge $19.95 per month for three book downloads per month.

All-you-can-eat books for a flat fee. Charge, say, $100 for a “Kindle Prime” membership, analogous to Amazon’s free shipping option. Then let people download all the books they want. Some people would download hundreds of books, but my bet is that a lot more would download just a few, balancing it all out.

Send customers full book downloads on spec. If Kindle owners like a book, they can pay for it and keep it. If they don’t, it expires and disappears from their device’s memory.

Let customers name their own price. Magnatune, an independent digital music publisher, is trying this model, and they say that when you give people an empty box and let people fill in their own price, they often pay more than the minimum requested, to support their favorite artists.

Bundle e-books with print books. When a customer buying a print book is checking out at Amazon.com, ask them if they’d also like the Kindle edition for an extra dollar or two. And ask Kindle owners if, for a little more, they’d like to receive the print versions of the e-books they’re buying. Pretty soon, even non-Kindle owners might have enough e-books waiting in their online libraries that they’d give in and buy a Kindle. And Kindle owners would appreciate having both print and electronic copies of their books on hand, allowing them to switch back and forth depending on their situation.

Don’t forget that there is essentially zero marginal cost to selling an e-book: it’s just bits, so there’s nothing to print, store, or ship. From a publisher’s perspective, every e-book sold is like pure profit on top of their print sales. So what’s the harm in experimenting?

Kindle 1.03. Find a bricks-and-mortal retail partner. Anyone can walk into an Apple Store or an AT&T retail location and get some hands-on time with an iPhone. But one of the Kindle’s huge handicaps is that you can’t play with it. Amazon doesn’t have any physical stores. And there aren’t enough Kindle owners yet so that the devices are a common sight. (I have spotted exactly one Kindle in the wild—and that was at the Seattle-Tacoma airport, in Amazon’s home city.) So the only way you can see the device is in the pictures on Amazon’s site.

Amazon has made a half-hearted attempt to remedy this situation, by creating a customer forum called “See a Kindle in Your City.” It’s supposed to be a place where prospective owners who want to try the device can connect with current owners who don’t mind showing theirs off. But the forum is long on Kindle-seekers and short on showoffs. The forum’s tone is forlorn: “Kindle in Milwaukee, WI?” “Is there a Kindle in St. Augustine, FL?” “Any Kindle in or near Boulder, CO?”

It may be a heretical thing to suggest to an e-retailer—particularly one that started out selling books—but Amazon needs to connect with a real-world bookstore chain and shell out for a few endcaps where readers can touch a Kindle. When Sony brought out its PRS-500 reader in 2006, it was smart enough to contract with Borders to put display units into bookstores. I bet Barnes & Noble would take Bezos’s call. Failing that, how about Best Buy, Circuit City, or even Wal-Mart or Target?

4. Make the Kindle into the world’s first mass-market talking book. I’m not talking about bundling conventional audio books with e-books (although that could be a cool idea). I’m talking about building text-to-speech capabilities into the Kindle. The technology is getting pretty good these days; there’s a “Listen to story” link on every story page at Xconomy that plays a speech-synthesized version of the text, courtesy of an Israeli company called Odiogo, and I’ve talked with Xconomy visitors who were surprised to learn that the Odiogo voice isn’t a real human. If a Kindle could talk, owners could consume books, magazine articles, and newspaper articles even if they were cooking, driving, or exercising. Maybe I’m crazy, but I think this could be the Kindle’s killer app.

* * *

If Amazon really plans to bring out Kindle 2.0 this fall, as the Business Week report predicted, it’s probably too late to add features like the ones I’m suggesting here. But maybe they’ve already thought of some of these ideas—or better ones. Truth be told, the company could go a long way toward winning me over just by making the Kindle a little more elegant, a little less expensive, and a little more connected to the real world of reading. I’m ready to forgive Amazon for a rough beginning—and move on to the next chapter.

For a full list of my columns, check out the World Wide Wade Archive. You can also subscribe to the column via RSS or e-mail.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://www.letterneversent.com chris

    Do you actually even own a Kindle?

  • http://www.xconomy.com/author/wroush/ Wade Roush

    @chris: I have used a Kindle, but no, I don’t own one and wouldn’t buy one in its current state, for all the reasons I outlined. But I know there are lots of people who love their Kindles — and if anyone wants to say why it’s actually a great product, I’d love to see their comments here.

  • Jonathan Ruppin

    “It may be a heretical thing to suggest to an e-retailer — particularly one that started out selling books — but Amazon needs to connect with a real-world bookstore chain and shell out for a few endcaps where readers can touch a Kindle.” I’m sure Amazon would love to get presence in a bookshop, but since Amazon are now every bookshop’s principle rival – here in the UK at least, I’m less sure about the USA – no bookshop – surely? – is going to let Amazon promote themselves in their stores. It’d be like Barnes & Noble trialling a new service in Borders.

  • http://xconomy r cass

    your article hit me…positively so…
    i have been racking over which e reader to buy..none seem to stick out…and as they are overpriced, who wants to make a mistake and become regretfull..

    your suggestion re kindle are superior…should the price drop to 199, ther be a bookclub bundle arrangement…i would be there..

    til then i will download free ebooks, put them on my sd card, and use a mini laptop..ala everex or asus eee.

  • JRG

    I’ve played with a Kindle, and I loved it. I would definately buy one if the price point was sub $250.00. I was very dissapointed that the 2.0 version won’t be out until Fall 2009 (so they say), b/c I think Amazon is missing a HUGE opportunity with the holidays approaching. Maybe the rumors are just rumors???

    Your point about: “there is essentially zero marginal cost to selling an e-book: it’s just bits, so there’s nothing to print, store, or ship. From a publisher’s perspective, every e-book sold is like pure profit on top of their print sales. So what’s the harm in experimenting?”

    Is that really so???? Think about this:
    -Author gets a % from every sale, even electronic, so each sale is NOT free
    -Amazon has to buy rights to sell books, and from what I read, sometimes at loss in order to attract customers.
    Summary: Nothing is “free”.

    For the 2.0, I want to see the following:
    1. A better organization system
    2. “Sexier” looks
    3. Better button placement
    4. Faster refresh time between pages
    5. Seamless PDF integration/uploading
    6. More competitive newspaper pricing (WSJ is about $120/year via Kindle, and $99/year via paper format).
    6. Better internet usage

    If these, or some of these issues are addressed, I will gladly buy one. I actually used the “See a Kindle in your area” feature, and I met someone who has one. They really are amazing devices.

    Cheers,

    JRG

  • http://www.evilempirecomedy.com Tim

    I love my kindle. I had similar complaints to the ones mentioned above, but they went away very quickly. About the looks; clearly they chose function over form. But I like the way it feels over the Sony 505. I think the 505 is to thin. I read in bed and in my chair and I marathon read. If a start a book and like it I will often read for 8 or more hours. The larger size makes it easer to hold. I like the size of the buttons, they are easy to find when fully immersed in a book. After the first week with the kindle I never accidentally hit the button again, and I think the people who complain don’t own one and never used one in a practical way. The negative resopnces are simply a matter of what you think it will be like, rather than what actual long term use is like. I love the keyboard. I use the kindle for reference, and searching the content of my reference books is easy. But the thing that makes the kindle the best e-reader, and I do not understand why it has yet to be copied is the wireless. The Wispernet on sprints EVDO network is awesome. It works almost everywhere. I Would take WI-FI on the next one, in addition to but not in exchange for the Wispernet. And lastly, the ability of the Kindle to operate without the help of a computer is huge. I do not want to take my Laptop everywhere, and i don’t want to buy a ton of books beforehand so I wont run out.

    The one think I do not want to see on it is a touch screen. It seems to me that it is totally pointless on a reader. It would drain the battery, cause fingerprints all over the screen and you really wouldn’t use it all that, not to mention how much higher the price would be.

    Clearly Ilike my kindle just the way it is.

  • Roger Knights

    Here are the article’s suggestions I like:

    1. Motion-activated scrolling. (A Jobs-worthy idea!)

    2a. Book Subscriptions.

    2e. Bundle e-books with print books.

    4, Include a text-to-speech feature. I like this one very much. Last year I urged, in a post on Amazon, that Bezos jump on his Segway and pay a visit to Adobe (up the street in Seattle), which now has excellent text-to-speech software in its Reader.

    Incidentally, here’s how to test out its feature on any PDF, which will demonstrate how good this can be:

    Choose View > Read Out Loud > Activate Read Out Loud or press Shift+Ctrl+Y [or Shift+Command+Y for the Mac.]

    Interrupt reading out loud:
    Choose View > Read Out Loud > Pause or press Shift+Ctrl+C [or Shift+Command+C for the Mac]

    Here are the suggestions that I partially agreed with:

    2b. All-you-can-eat-books for a flat fee. I’d put an upper limit, like 20 books, on that. (Publishers would never agree to something so radical anyway.)

    2c. Send customers full book downloads on spec. Too radical for publishers to accept. Instead, Amazon could offer a partial refund for books that readers decide they don’t want permanent access to, after they’ve read them. Say 20%.

    Here are the ones I disagree with:

    2d. Let customers name their own price. This may work for inexpensive music sales, but it’s unlikely to work as well for items that cost ten times as much. Anyway, it’s too radical for publishers to accept.

    3. Find a bricks-and-mortar retail partner. Maybe eventually, but not yet. Amazon has been selling Kindles as fast as it can make them (running out of stock from time to time), so its sales aren’t being constrained by its lack of visibility to potential buyers. Further, it’s probably selling the Kindle at near-cost, so there’s no room to give up $100 to a retailer.

    I also don’t think Amazon can lower the price significantly without incurring the displeasure of publishers. If it starts selling the Kindle at a loss, they’ll suspect he’s making a long-term strategic move to disintermediate them. I suspect some of them may already have told Amazon that they won’t cooperate if the Kindle is priced below cost.

  • http://danweinreb.org/blog Daniel Weinreb

    My wife and my son and I recently went on a vacation to the Galapagos, in which we had tight limits on how much luggage we could bring. On most vacations we bring piles of books, but we could not do that this time. So we bought a Kindle. And we liked it so much we bought a second one, so that we could share two among the three of us. Yes, you have to get used to the buttons and they could be improved. But it’s still great.

  • http://www.kenjansenrealestate.com Ken Jansen

    Hi Wade,

    Great article. I have played with a one kindle and I thought it was pretty interesting. One of the moms at the playground had one, so all the dads gathered around and ooohed and aaahed over her toy. I agree on the price. Way to high for a holiday present.

    How are the authors paid on electronic books? Is there any difference on ebooks vs paperbook? Just wondering if the authors might be persuaded to perform a webinar reading of their book v.s. going to the local or chain bookstore. If the authors had a different incentive plan I am sure some of them would forgo a bit of the traveling.

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  • b

    I don’t know much about the Kindle. I would like it to support full color and be able to display graphics.

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