They have got to be insane. Amazon's new E-Book Reader, the Kindle, is now out on the market. It's generating a lot of chatter from OUP Blog to Engadget to Gizmodo
to Silicon Alley Insider
, where Steven Levy goes on at some length about the way this device may shake up the mess that is book pricing:
Publishers are resisting the idea of charging less for e-books. "I'm not going along with it," says Penguin's Peter Shanks of Amazon's low price for best sellers. (He seemed startled when I told him that the Alan Greenspan book he publishes is for sale at that price, since he offered no special discount.) Amazon is clearly taking a loss on such books. But Bezos says that he can sustain this scheme indefinitely. "We have a lot of experience in low-margin and high-volume sale -- you just have to make sure the mix [between discounted and higher-priced items] works." Nonetheless the major publishers (all of whom are on the Kindle bandwagon) should loosen up. If you're about to get on a plane, you may buy the new Eric Clapton biography on a whim for $10 -- certainly for $5! -- but if it costs more than $20, you may wind up scanning the magazine racks. For argument's sake, let's say cutting the price in half will double a book's sales -- given that the royalty check would be the same, wouldn't an author prefer twice the number of readers? When I posed the question to best-selling novelist James Patterson, who was given an early look at the Kindle, he said that if the royalty fee were the same, he'd take the readers. (He's also a believer that the Kindle will succeed: "The baby boomers have a love affair with paper," he says. "But the next-gen people, in their 20s and below, do everything on a screen.")
Electronic formats and book pricing are two very important topics, but I don't understand why both Levy and James Patterson aren't emphasizing the big gigantic flaw in the Kindle sales pitch. The device costs $400. Nobody will buy it for that price.
I really don't see what more needs to be said about this.
Can Amazon and James Patterson and any of the journalists quoted above actually believe consumers will pay $400 for a standalone book reading device? Am I the one who's losing my mind here? Let's just say I know a lot a lot a lot of people who buy books, and I can't imagine anyone I know buying a $400 book reader. Me, I wouldn't even cross the aisle at BestBuy to look at one, so irrelevant do I consider this offering.
Here's a hint (a hint worth more than $400) to those companies looking to profit from electronic books. Forget standalone devices. Consumers want their devices to serve multiple purposes -- camera, music player, internet browser, phone, organizer -- and that's the way we're going to want to read electronic books. If you want to succeed in the e-book business, find ways to make full-length books look good on existing high-end devices (iPhones, Blackberries). Work with manufacturers of lower-end devices (cheaper music players, video players, cell phones) to find ways to make full-length books look good on future versions of these devices too. And then, most importantly, as Steven Levy says above, use the transition to the new format as a chance to reach new readers with new pricing structures.
Electronic formats are a thing of the future, but Amazon's bloat-priced Kindle is dead on arrival. Next player!