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Wednesday, February 11, 2009

Amazon, You Know It's the Content, Not the Device

When there is a business tie-up between the content provider and the device manufacturer for using that content, the price of the device has almost always been very inexpensive to lure in new customers. The price of iPods have steadily fallen because Apple makes money out of songs. Cell phones are inexpensive with service packages because of money/minute. Amazon has a deal with almost all the leading publishers, and almost every new book (which I assume is a major revenue generator) published will/should have an electronic version transferable through Kindle. In that case why price the reading device as high as $359?

Are they waiting for Kindle's usability to evolve? Are they waiting for the market for e-books to mature? We're in a recession now, didn't you know? People don't mind shelling out $10 for a Grisham e-novel. And they won't mind another $10 the following month for their favorite painter's e-biography. But they mind a lot paying $359 upfront for an e-reader - which in effect turns away the subsequent cash influx because of the sales of Kindle editions. The recent version, Kindle 2 offers more value (more memory, smaller size, etc) for the same price. For me, lesser price and same value would have made more economic sense. This would be taking a leaf from the success of Netbooks - a computer with lesser memory & lesser processing power at a lower price.

I think Amazon has manufactured only a limited number of Kindles so that it can collect extensive feedback and incorporate them into their next version. This way, a lot of users stand in queue and there are only a few disgruntled users. The electronic publishing industry is still an infant. The publish-on-demand and publish-yourself style services have greatly reduced inventory, thereby only printing copies that has a buyer. As the older generation which held newspapers in the mornings and flipped pages go away, Kindle and its competitors will become the default standard of reading. Reducing the price, say, to $100 and going for an early kill will disrupt the existing publishing model. Either that or Amazon needs to be kicked in the butt by somebody already in the content business - Apple or Microsoft or Sony.

4 comments:

venkatramanan said...

Prasad! Glad to see your writings on general things other than movies! (though your movie reviews are still a formalist's delights)
Yes! I do accept that @ $359 Kindle is very much expensive (Its 16K in Rupees :-)) On the other hand, eslick reader(a product from the makers of Foxit Software is also a bit expensive - $260! Lets wait for the price to be $100!
And a cliched question - Hows life? (or !)

Regards
Venkat

Prasad Venkataramana said...

Venkat,
Because of Amazon's strong establishment with the range of publishers, you can depend on Kindle to buy almost any title. I'm not sure of the depth & reach of ESlick. The price of such readers is anyway going to fall down, but my point is Amazon shouldn't wait until the paper-loving generation dies.

Life's good. Hope you're doing good too. Thanks.

ohmsdeeps said...

Hey Prasad,
I second your opinion on the device being expensive. I plan to wait little more time before I get the Kindle. I am also waiting on the Nintendo Wii console.:-)

We will miss your movie blog so much. The way you described Ilaiyaraja's music and kamal's humor encounters were really sensational .I could still remember the way you beautifully appreciated the characterization in Dark Knight and the directorial intelligence in Kadalikka Neramillai.
I would say that your reviews and thoughts in the movie section was simply intelligent, thoughtful and funny.
May be you should consider blogging in there at least now and then.
Sad fan.:-)

Prasad Venkataramana said...

Ohm,
I truly appreciate your words. I plan to write about movies in ScreenAct, though the posts won't be as focused on movies as it was in ScreenArt.

My writing interests have been shifting goalposts. Sometime in the future I may end up aggressively writing about movies, though I don't see that happening now.