Yesterday, Amazon announced a new version of its popular Kindle e-reader, where in exchange for a $25 price break the device’s screen saver shows ads (ahem, “special offers”) instead of portraits of notable authors. Gizmag has a great write-up all about it, so I won’t talk too much about what you get with this new Kindle. Instead I want to comment on what this might mean for publishing.
As a Kindle owner, I’ve been amazed at how many books Amazon is giving away. They even promote a Top 100 list of free books – one of which I’m reading right now. It’s a great book that is a couple years old but easily worth much more than free. Of course, this might be a special deal from the authors, hoping the added exposure will drive sales of their most recent book which is for sale for actual money. Yet, all the same, I’ve been wondering what this might mean for Amazon.
It is a known fact that as the cost of distribution drops, so does the price of goods. Well, we’re right on the cusp of when the cost of distribution for anything digital is free. Yes, we do pay for our internet service in most cases, but we do that anyway. So anything digital we can get for virtually nothing. Businesses are struggling trying to make a business in spite of this, be it with ad revenue or selling information to marketers.
So what is Amazon doing? They’ve been destroying their competition with not only the best e-reader at the best price on the market, but also by giving so much away. But how can they stay in business doing that, when they make so little off Kindle’s in the first place? Well, now we know where they are headed. Just like broadcast television is supported through ad revenue, Amazon appears to headed toward becoming an ad-supported distributor.
So, fast forward five years. What will the book world look like? Will e-readers be given away for free with 2-year contracts like many mobile phones are now? Will you have access to unlimited content for a monthly fee like Netflix or how the music industry is headed with streaming music? How will publishers react to these revolutionary changes in the distribution model?
What do you think?