Love it or hate it, Amazon.com’s Kindle e-book reader is selling well — in fact, even at $359 there currently aren’t any in stock. So Amazon certainly doesn’t need any advice from me about how to sell more Kindles, but I have some ideas about how the company could make the device more attractive to casual readers like me.
The basic idea would be to make the Kindle reach critical mass as a consumer product, similar to how many “average” people own an iPod. Whether iPod owners use it or appreciate it isn’t as important as the fact that they bought an iPod because it’s become the de facto standard for portable music playback.
Granted, e-book readers are a harder sell than portable music players as almost everyone consumes music in someway or another but not everyone regularly reads books for pleasure. Still, the idea isn’t to make the Kindle as popular as the iPod, it’s to make the Kindle the iPod of e-book readers.
No changes to current hardware
My prescription for selling more Kindles to regular people doesn’t involve anything drastic like changing the hardware. It can be implemented easily and instantly. Plenty of pundits would argue that the device is in need of a hardware overhaul – and maybe it is – but let’s work with what we currently have. My plan makes upgrading to newer models enticing for current Kindle owners, too.
It’s way too expensive for casual readers
I consider myself a casual reader in that I read about ten books per year. Assuming I’d buy all my e-books at ten bucks a pop, it’d cost me over $350 to just get into a Kindle at first, plus another $100 scattered throughout the year. Psychologically, that initial $350+ purchase price is what keeps me away. I keep telling myself that I could buy ten books at the bookstore for less than half that price.
For me, as a technology enthusiast, the EVDO data connection is THE killer feature that the Kindle has going for it, but it’s not enough to persuade me to spend almost $359 plus $10 per book on a device that I’m going to use ten times each year.
That data connection is, beyond a doubt, the reason for the Kindle’s high price tag. Amazon has to pay Sprint something for access to its data network and that cost is passed along to the consumer. While some have mused that some sort of subscription to the data access could subsidize the cost of the Kindle, Amazon knows that keeping things as simple as possible is in everyone’s best interest. You don’t buy the Kindle through Amazon and then deal with Sprint, you buy the Kindle and use it without worrying about how those books are getting sent wirelessly to your device.
How to overcome the price obstacle
Here’s how to keep current Kindle-lovers happy while making the device accessible to less avid readers. This model draws from a model previously used by Audible.com to sell subscriptions to its audiobook service. Back when MP3 players were starting to grow in popularity but were still pretty expensive, Audible used to subsidize certain players against automatic monthly audiobook purchases. You could sign up to certain tiers (one, two, or three books per month, for instance) and the higher the tier you signed up for, the cheaper your MP3 player would cost.
So for Amazon, here’s what I’d suggest:
1. Keep selling the Kindle for $359, straight-up, just like it’s being sold now. No fuss, no muss, nobody gets bent out of shape. People can buy the Kindle and then spend as little or as much on e-books as they see fit.
2. Sell the Kindle for $249 with an automatic $15 monthly book credit for one year.
While most books cost under $15, it’s hard to get two books for that price. Not wanting to waste book credits, people might be persuaded to purchase a second book or a subscription to something every month using the remainder of their monthly credit, plus regular money to make up the difference. That, or Amazon would keep the extra $5 or whatever wasn’t spent ($15 for forgetful users).
Buying the Kindle wouldn’t sting as much at first for consumers and Amazon would end up taking in at least $429, minus whatever it pays out for royalties.
3. Sell the Kindle for $49 with an automatic $30 monthly book credit for one year.
This would work for avid readers who don’t want to outlay $359 up front for the device plus it’d entice people like me to get into a Kindle for dirt cheap, load up on books for the first year, and then spend the next year or two reading them.
Amazon would take in a total of $409, minus royalties, and $30 is easier for consumers to use up on three best sellers each month without going over.
Hardware upgrades
The monthly credit model would also entice first-generation Kindle owners to upgrade to subsequent Kindle devices. Instead of saying, “I paid $400 for the first one – I’m not paying another $400 for the new one” they might say, “I paid $400 for the first one and spent roughly $30 a month on books, so maybe I’ll pick the new one up for $49 and sign up for the $30-per-month plan.”
Possible obstacles
The biggest factor for Amazon would be whether or not a system like this would be profitable given the amount of money it has to pay to authors for each book sold. A cursory search on e-book royalties seems to peg the figure at between 15% and 25% to the authors/publishers for each book sold.
If that’s true, Amazon would only be eating a couple bucks on each book sold — and we’re assuming nobody forgets to use up their credit for the first year — but the Kindle would be in the hands of so many more people, which is the whole idea.
Agree? Disagree? Your thoughts?