Amazon’s New Kindles: Disruptive Price of a Disruptive Technology for the Book Industry?

Written by:
Joel Basa
eMarketing Manager
Xerox Corporation
Amazon had some big news this week with the release of three updated Kindle devices. An updated entry-level Kindle and a Kindle Touch (with touchscreen) were announced along with the biggest news of the Kindle Fire (tablet). We’ve all heard the debate of e-readers, not just the Kindle, as a disruptive technology for the book publishing industry. We commonly hear the statement of ‘books are expensive and obsolete” and the e-reader is the display mechanism of the future. However, I ask, is the news from yesterday more about a disruptive price than disruptive technology?
The most inexpensive Kindle now goes for $79, quite inexpensive in my mind and I’m convinced that many will be willing to spend that amount to switch to an e-reader. I foresee the price of e-readers continuing to fall over the next decade. Will we reach a point where an e-reader can be purchased near a store’s checkout area and sold as a “disposable” device similar to a disposable camera?
Although price point of the device itself is important part, the cost of content is possibly a more important consideration. That brings me to another piece of news from about a week ago that we must factor in: Amazon and Overdrive officially rolling out the availability of e-books that are Kindle compatible. This now enables the 11,000 libraries that use Overdrive to now distribute titles for free. I realize new releases would not be included in the free content available through libraries but many reference books and classic novels are available through Overdrive now.
What do you think? Do you think falling prices in e-reader products and e-content will change people’s behavior for reading content? What does this mean for the book publishing industry?

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  1. John Conley September 30, 2011 -

    Amazon has long been the champion of the Razor and Razor Blade approach as the revenue model for its e-reader devices. This means that the price of content is the main profit driver. We have seen that free content is neat but In copyright content is where the profit and volume is going to be. Since the Trade Book Publishers adopted the agency model for their E book Content the results in both volume and revenue have had a positive impact on their bottom lines. Print goes down but total units sold goes up. Print is not going away but as long as E content is a profitable solution for a Publisher and a growth opportunity they are going to feed every E device and solution that comes to market.

    [Xerox Employee]

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