Kindle Pricing, Business Models and Source Code

narramissic writes "A trifecta of Kindle-related news surfaced this week, with Jeff Bezos speaking at Wired's 'Disruptive by Design' conference on topics including Kindle pricing and business models. And yesterday, reports blogger Peter Smith, 'there was a flurry of blogging activity yesterday stating that Amazon had released the Kindle source code. Once everyone caught their breath, it became apparent that the files in question were just some open source libraries that Amazon had modified (they're being good open source citizens and releasing mods they've made to open source code — good for them!), not the complete source code.' Now, back to the Kindle pricing: According to a post at Wired, Bezos said Amazon opted to sell the Kindle for 'something akin to the actual cost for hardware,' rather than subsidizing the hardware costs and requiring a monthly subscription or requiring the buyer to purchase a certain number of books per month because 'fees and minimum purchase requirements create friction.' Smith has a different take: 'If I'm buying a Kindle from Amazon that enables me to buy books from Amazon, I'm broadcasting a desire to buy Kindle books. I would welcome some subsidization of the hardware since I'm going to be buying content anyway. No, I really think Amazon priced the Kindle the way they did because they thought they could get away with doing so (and they were right, it would seem).' Meanwhile, over at the New York Times, Bezos said 'that he sees Kindle-the-device and Kindle-the-book-format as two separate business models, and that the Kindle iPhone App won't be the last software reader to appear.'"

Comments

End of print periodical?

[bhsx]

Rupert Murdoch has apparently been watching the Kindle closely and has been planning on coming-out with his own version to give away to subscribers of his newspapers. Perhaps Bezos really did have the timing right with the Kindle and it just MAY unseat a large portion of the print periodical industry. Should be interesting to watch, no matter how it works itself out.

Re:End of print periodical?

[Jurily]

Maybe you haven't noticed, but a large portion of the print periodical industry is being unseated without the kindle's help.

What I'd like to see is an e-book reader that fetches my news and favorite comics from tha intarwebs. The first company to come out with it will be rich, guaranteed.

Kindle 1 owner

[BigHungryJoe]

there's more than one "Kindle-the-book-format", though. There's the regular Kindle file, azw, and there's one they call the "Topaz" format (azw1), and it sucks. I love Vernor Vinge, and unfortunately, lots of his stuff is in topaz format on the Kindle.

Huge numbers of artifacts - lines printed over other lines, skipped lines, and sometimes the first word of a sentence has huge amounts of whitespace between the first and second letter.

Other than that, love my Kindle.

I'd prefer to rent an ebook than own it

[peter303]

98% of books and 99.9% of magazines I never re-read. I'd prefer a library model, say $1 a day to read a book, then I could stop access and paying for it. The main exception would be course-texts.

Amazon's Pump-n-Dump?

[mpapet]

I have a hard time with the buzz on Amazon's device.

Right now, their stock is trading at an astronomical P/E ratio.
Their balance sheet has an equally astronomical Goodwill valuation.
Does someone follow the corporation's reporting enough to publish some facts regarding how much this device contributes to their bottom line?

If this were a big win for Amazon, it would show up in their numbers.

Now, how many of you *actually* stuff another device in your laptop bag to read books?

Or, maybe it will be like the days when Apple introduced the ipod and many on /. said it was doomed, only with Amazon the expectations are backwards.

Re:Amazon's Pump-n-Dump?

[nonsequitor]

I've owned the original Kindle for over a year now and as a business traveler it's amazing. Instead of stuffing a couple paperbacks in my carry on, I take my kindle. If I'm out of books to read, I browse the amazon store from the terminal, which is substantially cheaper than say Hudson News.

When I travel internationally to non-english speaking countries, meaning no english tv channels, I usually load up half a dozen books in advance to keep me occupied. Since the wireless obviously only works in the states.

Why a kindle and not an book reader app on my laptop? The visual quality of the e-ink display is amazing. I can easily read text from any angle while on the beach in direct sunlight and wearing polarized sunglasses, lets see you do that with a laptop. Additionally the battery life is what makes the device usable. I can read for days between charges with the wireless on and over a week with it off. I do wish they would just list hours of battery life, not weeks of "nominal use" since I'm a heavier reader than most, I've never gotten 2 weeks of charge time with the wireless off, so that metric is useless.

My biggest complaint is that I have to turn off the Kindle for takeoff and landing.

Re:Amazon's Pump-n-Dump?

[Hadlock]

With the New York Times to $2/ea (newsstand price, what I pay/buy), as soon as this drops in price by $50-100 it becomes cheaper than buying it at the newsstand. $100 pricebreak or faster refresh (next gen e-ink tech) is what will make me buy one. If the NYT would give a $100 rebate for a 1 year subscription I would buy one tomorrow. There's a lot of people waiting for the price to come down 10-20% and I think you'll see a bunch of people ordering them that would otherwise never have been in the market for one of these. The larger screen size is a big selling point to a lot of people. Now if I could get the articles @ 12pt New Times Roman from edge to edge in two columns, I'd be a very happy camper.

Re:Don't subsidise the hardware - subsidise the bo

[Itchyeyes]

Digital content has no intrinsic cost, so it's not much of a subsidy on their behalf.

Digital content has no intrinsic cost to the publisher. To Amazon, who has to pay the publisher a royalty fee for every sale, digital content has a very real, per unit cost that they cannot go below. Just like the television and film industries learned very little about digital content from the music industry, so it would seem that the publishing industry has also chosen to ignore the lessons learned by those who have gone before them. The transition to digital print is going to be every bit as painful as it was for movies and music, and it's going to take several years of publishers taking their lumps before they finally come to grips with a pricing model that actually works for most of their customers.

Re:they are supporting ebooks on non-Kindles

[gEvil (beta)]

I read this as Bezos saying that they'll support Amazon Kindle ebooks on other "mobile" platforms (a la various smartphones, etc), but that they won't support them on anything that is a direct competitor (a la E Ink-based reader devices) to the Kindle. This view is totally consistent with the words he said.