Four Ways Amazon Could Make Kindle 2.0 a Best Seller

[Addendum, 10/4/08: Boy Genius Report has published pictures from a reader who obtained a Kindle 2. It’s unclear so far which, if any, of the features described in my article below, published 10/3, are included.]

I wanted to love the Amazon Kindle. I’ve been a believer in the future of e-books ever since the late 1990s, when I briefly worked for NuvoMedia, the company that introduced the Rocket eBook. I was thrilled when I first heard that Jeff Bezos had decided to get serious about the technology, figuring that he was sure to have a better understanding of what makes for a great reading experience than Sony, whose PRS-500 reader, released in 2006, was a disappointment. I was intrigued when Amazon said Kindle would have a wireless chip, allowing free, nearly instantaneous book downloads over a national EVDO network. But when the first version of the Kindle came out in November 2007, it was so astonishingly ugly and expensive that I immediately soured on the product.

Now, though, there are reports that the “Kindle 2.0” is on the way. And being an optimist, I’m hopeful that Amazon will work out some of the kinks in the first-generation device. In late August Business Week‘s Peter Burrows reported, based on an interview with an unnamed source who had seen the new device, that Amazon brought in a consumer-electronics expert from international design house Frog Design to guide the Kindle’s overhaul, and that the new version is thinner and “more stylish,” with an improved screen and user interface. “They’ve jumped from Generation One to Generation Four or Five. It just looks better, and feels better,” the source told Burrows.

The Original Kindle, from AmazonThat’s all very encouraging. But Amazon needs to change more than just the gadget’s look and feel. If it really hopes to catch up with slick rivals like the iPhone (which is a credible e-book reading device in its own right) and compete with Sony’s expanded e-book reader line (the latest addition to which was announced this week), the Kindle needs some basic operational improvements: fundamental design matters like the placement of the page-forward and page-back buttons were badly flubbed the first time around, according to many owners. Amazon also needs think more flexibly about content pricing. And it needs to charge less for the device itself: the current $359 price tag probably reflects Amazon’s actual cost (the electronic paper screen, designed by Cambridge, MA-based E Ink, is very expensive), but I don’t think the company will see mass adoption at any price above $249. Dropping the price to $199, the same as the 8-gigabyte iPhone 3G, would get people thinking seriously about the Kindle as a holiday present.

I’ve met Bezos, and he strikes me as a big-picture guy. I’m sure he understands that the Kindle is more than a reading appliance—it’s an entire publishing platform, a system for browsing, purchasing, and consuming books, magazines, newspapers, and other digital media. So, just as Apple has continually revised and updated iTunes and the iTunes Store (without which iPods and iPhones would be fairly useless), I’m hopeful that Amazon is looking at ways to make the whole Kindle package more appealing to readers. But just in case they need some suggestions, here are a few:

1. Explore motion-activated scrolling or page turning. One of the biggest complaints from Kindle customers has been that the page-forward and page-back buttons are so large and awkwardly placed that it’s easy to hit them accidentally. Amazon will surely try to fix this problem in the Kindle 2.0, probably by moving the buttons around or making them smaller. But there’s an affordable technology—tilt activation—that could help them get rid of the buttons altogether.

Last week I bought an app for my iPhone called Instapaper Pro that’s quickly becoming indispensable to me. Its main function is to copy stripped-down versions of Web pages, then download them to your iPhone. Say you come across a long newspaper article and you want to read it later. You just click the “read later” bookmarklet in your browser, and the article will automatically show up, minus ads and other junk, on your iPhone. I find this extremely useful. But what makes Instapaper even cooler is the “tilt scroll” feature, which allows you to advance through the copied Web text simply by tilting the phone slightly backward or forward. It’s an ingenious use of the iPhone’s built-in accelerometer—the same tiny chip that prompts the Web browser window to rotate by 90 degrees if you want to view it in landscape mode rather than portrait mode.

It ought to be easy to build something like this into an e-book reader. Tilting the Kindle backward or forward might not be the most natural way to activate a page-turn, since Web pages scroll up and down, while book pages flip from right to left. But any movement that the accelerometer can detect is fair game. Maybe a sideways jiggle?

2. Try different pricing and distribution models for e-books. Amazon charges $9.99 for the Kindle versions of new releases. That’s less than what you’d pay for a hardcover, which is part of the Kindle’s attraction. And in light of the fact that Apple does pretty well selling albums on iTunes for $11.99 to $13.99, I’m willing to revise my earlier argument that new-release prices should be slashed to $5 or $6.

But I still don’t understand why e-book publishers and device makers aren’t exploring more of the 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.

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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.

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

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