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How Amazon.com could screw up eBooks
46 comments- TAGS:Amazon, Amazon.com, eBook, Kindle
- IT TOPICS:Hardware, Mobile & Wireless, Personal Technology
Amazon.com wants to own the future of publishing, and got off to a running start with its Kindle eBook reader, which launched in November, 2007.
The new, improved Kindle will almost certainly be announced February 9 and ship a few weeks after. If leaked photos and insider reports are any indication, it appears that the new Kindle will be far more usable and appealing than the first iteration.
The company is in a great position to control digital books the way Apple controls digital music. But they could still screw it all up. Here's how:
1. Screw over customers waiting for new Kindles. Everyone who has ordered and is still waiting for delivery on an old Kindle should be given the opportunity to instead receive a new one at the same price. But they should also be allowed to get an old one if they choose. PREDICTION: I think Amazon.com will get this right.
2. Shaft publishers. Nobody knows what kinds of deals you're offering book, magazine and newspaper publishers, but if you're not making it highly profitable for them, you're missing a huge opportunity. PREDICTION: I think Amazon will mostly get this right. Publishers will probably be neither thrilled nor horrified by the costs of doing business with Amazon for electronic versions of their books.
3. Stay closed. Apple gets away with something you cannot, which is to not allow competitive media players to play iTunes content. Amazon.com: You're not Apple. You're not in the hardware business. You're in the book business. Use the current popularity of the Kindle to build a platform that others can use to sell books. Readers should be able to use the Amazon Kindle store just like you do on a Kindle, but from an iPhone, a netbook or even a Sony Reader. All the cell phone carriers are looking to sell a wide range of mobile broadband devices, and this represents a massive opportunity for Amazon.com. PREDICTION: Amazon.com will screw this one up. The company may be drunk on the success and thrill of selling a hot hardware device, and become confused about what business it's really in.
4. Stay expensive. Allow the margins to keep declining as the cost of hardware keeps dropping (through Moore's Law and economies of scale). Don't get greedy. Your goal should be to get Kindles into as many hands as humanly possible so the maximum number of people are buying eBooks from Amazon. PREDICTION: Amazon.com will fail here, too. It's hard for public companies to give up profitable new businesses.
See the theme here? If Amazon gets greedy and starts trying to grab all the money during a recession, they could strangle the golden goose. But if they're patient, and defer major profits for later, they could end up in the position they hope for: The indespensible distributor of electronic books.
I'm rooting for the Kindle and Amazon.com, but there are so many ways that the company could still mess up. Let's see if they do. What's YOUR prediction?
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