Kindle: Big Money if Amazon Gets it Right

As you must have heard, Amazon is reinventing the book with an electronic device called the Kindle.  I want one.  Why?  Because a lot of my books are throwaways: cheap paperback novels.  I was at Borders the other night and couldn’t remember all of my current favorite paperback fiction author’s names nor exactly which of their books I’d purchased.  I would love to have Kindle and get it to add value.  Why not a Kindle book of the month club?  I could use a few new authors and Amazon is great at analyzing recommendations based on past preferences.  Why not let Kindle remember which books I already own?  Hopefully it will even understand which wood pulp editions I’ve bought so I don’t duplicate a paperback.

My initial reaction to Kindle was worry about the display quality and usability.  This is where they have a chance to really fall down.  I was impressed to see they’re using some pretty fancy e-ink technology there, but I’ll have to see one.  Eventually, I concluded it doesn’t matter for the kinds of books I’m likely to read with it.  You understand the kind of books I’m talking about here, right?  Spenser for Hire?  Tom Clancy?  Michael Crichton?  These are books that are consumed and discarded.  I often go through one in a single evening.  I tried keeping them, only to discover that I can’t reread them.  I can pick one up I bought many years ago: 10 or 15 years or more for an old Robert Ludlum.  I may get a few pages into it, but suddenly the whole thing pops into my head and I remember it.  These books are disposable to me.  For this kind of reading, the display needs to be contrasty and legible, but there is no color.  I want to be able to see it in bright sunlight by the pool or beach in Hawaii, but I don’t need to render coffee table book-quality photos.

The form factor is ideal for travel too.  We recently took the kids on a Med Cruise, and the stack of books my wife and I dragged along was ridiculous.  We read every single one, wished we had more, and abandoned half of them in the stateroom when the cruise was over.  With Kindle, it’s easy to pick up more books along the way.  They weigh absolutely nothing after all. 

Now I’m wondering if I’ll have to bring my laptop as well based on how much laptop functionality Kindle can provide.  Strangely, nobody is asking whether it can do MP3’s.   Huh?  I can buy CD’s at bookstores.  Might I not want a little music while reading?  Ryan Stewart wants to know why it doesn’t do PDF’s.  Good question.  It will be great to read blogs on Kindle, although wow, the fees for the blogs seem ridiculous.  99 cents to 1.99 a month per blog and I read 171 blogs as of this writing.  Mathew Ingram is right when he says, “Pay to read blogs? WTF?”  The economics make no sense for that, and I’ll have to bring along a laptop or perhaps an iTouch/iPhone for the blogs and MP-3’s. 

E-mail is another thing I might wish Kindle could do, but pretty soon I’ll have a full tablet PC.  Maybe Apple’s rumored device will steal Kindle’s thunder before it ever gets rolling too fast, much as devices like the Nomad MP3 player (I had one and loved it) got crunched by iPod.  This can happen when so many people are calling Kindle Ugly.  Bubblegeneration says:

As a product, Kindle’s no great shakes. It doesn’t have the disruptive value proposition that an iPod or iPhone did – in functional, aesthetic, or emotional terms. Yes, the screen is nice. But the storage is weak, and the aesthetics are…awful.

Functional, aesthetic, and emotion terms are important for a sexy potential Christmas gift.  Never underestimate the power of Apple’s Uber-coolness.

The economics of reading blogs on Kindle says a little about why I think this is Big Money if Amazon gets it right.  Consider my beloved paperbacks.  $9.95 a pop.  I’m guessing there may eventually be a premium for novels still in hard cover so as not to dilute those sales.  A brand new copy of Robert Parker’s “Million Dollar Baby” costs (drumroll please) $9.95 plus shipping and handling.  With Kindle, I pay the same money.  But, and this is a big but, Amazon paid very little.  They’re selling bits now, baby.  Just bits and no wood pulp.  Authors get 15% or so.  Publishers will have negotiated with Amazon.  It’ll be interesting to see how those economics play out, but I can’t see why this ends differently than it has for the record industry.  Kindle is disintermediating many aspects of publishing, though certainly not all. 

The bottom line is that Amazon could wind up with a bigger piece of the overall pie for a book sale.  Moreover, they have a mechanism that can much more effectively drive further revenue by signing you up for grander programs.  How about the Spenser for Hire book club?  Amazon will buy every novel Parker publishes and I’ll have it on my Kindle before I even knew it was out.  And what does Kindle do to ordinary bookstores?  How much of their revenue comes from these paperbacks?  Are they relegated to the high end ghetto of coffee table and other such books that aren’t satisfying on Kindle?

Still more questions than answers.  Amazon has a lot of work here to realize the promise, but I want a Kindle!