Mathew Ingram of GigaOm has posted a column looking ahead to how the publishing market might change if Kindles become available for free (as more people seem to speculate will soon happen the further Amazon lowers its prices).
Ingram notes the explosion of cheaply self-published titles, and adds that a free Kindle would give such titles a greater-than-ever audience of potential buyers. Traditional publishers, of course, still haven’t gotten the message that cheaper books sell better.
He also touches on the Sam Harris column that I covered a few days ago, in which Harris bemoaned the increasing desire on consumers’ part to get everything for free, but Ingram points out that what consumers really want isn’t necessarily free, just cheaper. But even free books might not be so bad:
There’s even the possibility that books could be free and still make money: Amazon has an ad-supported Kindle, so why not extend that model to the books themselves? Magazine writers publish their content in an ad-supported medium, so why not books? Authors such as Charles Dickens and Arthur Conan Doyle wrote many of their novels on a monthly basis as magazine supplements. And Amazon apparently already has a patent that covers advertising-supported e-books.
I have very little doubt that many TeleRead readers will shudder at the idea of advertisements invading their e-books—but on the other hand, even if that happens I expect the e-books would still be available ad-free for those willing to pay extra.
Getting back to the overall point, though, I wonder if the ad-supported Kindle with Special Offers will hit free within just another year or two? I certainly wouldn’t be surprised to see it hit “free to Amazon Prime subscribers,” given that Prime is already a significant cash cow for Amazon and that would give people an added incentive to sign up.
And as others have noted, even the $79 Kindle with Special Offers could be considered free in a sense, given that it’s possible to save as much money as the Kindle itself cost in a relatively short period of special offer buying. But that still requires that would-be readers must have $79 available in the first place, and be able to spend enough money afterward to save that much money.
The Kindle has already dropped in price an amazing amount in just a few short years since its introduction. It’s probably going to drop still further, even if it takes a while to make it to “free”. But you can bet that, as much as Amazon stands to gain from having Kindle owners buy its content, if there is a way to get it to free the company will do its level best to get there.
Let me answer that question with another. DVD players used to cost $100s of dollars. You can get now get a decent DVD player for $16-$20. How are DVD’s doing?
The problem with price cuts is that at some point it starts cutting against buyer psychology. If I spend $200 on an ereader, then I feel like I need to spend at least $200 on ebooks to “make it up” in savings. If I only spend $20 on an ereader, then I only feel like I need to spend at least $20, etc. If it’s free, then I might just sell it for parts.
To compound the matter- people who don’t read much, or who prefer paper books, don’t really care how cheap the Kindle gets. And heavy readers buy more when they have a good device rather than the version that can be made for free.
Amazon and Barnes and Noble know this, which is why the cheap-o ereaders they sell are really just there for the headline, while the more popular models, that people actually buy are getting more expensive. Albeit with low margins.
I expect this trend to continue with Mirasol.
Readers can learn to ignore/skip over ads in books just as we do when we surf through the home page on this web site. Annoying? Yes, but I still have NOT read a single one of them.
Nice idea Peter but how does that extrapolate to mobile phones ? It doesn’t. Extrapolation is a risky thing.
DVD players depended on the DVD medium which was always going to have a fixed shelf life. What about eBooks ? what is the medium and what is the shelf life likely to be ? The medium is the web/cloud. The file formats can be updated with software changes.
“Harris bemoaned the increasing desire on consumers’ part to get everything for free, but Ingram points out that what consumers really want isn’t necessarily free, just cheaper.”
I just don’t buy into this, and never did. People want ‘value’, not free.
The Kindle will never be free. The lowest it will go is free with a bundle, as with mobile phones. And that selling model has worked fantastically for mobile phones. As long as the product, the eBooks are good ‘value’. Amazon knows it is not in the tablet or eReader business, it is the eBook business.
Howard,
I think I agree with you, although I’m not sure what you are referring to in the mobile phone market.
I’m saying users who pay more for a product use it, and spend money on it, more often.
And I think that point does extrapolates very well to mobile phones.
I see Iphone and Android owners, who pay an arm an a leg for the product itself, buying all sorts of apps and basically living their whole life centered around showing off their their phone. I hardly use my flip phone at all except in emergencies.
I suppose I should clarify that by making an analogy to the DVD market, I’m not saying that’s where the ereader is headed (anytime soon- I do think when the time comes for tablets/ereaders to die out, “the cloud” will die a coupled death with them). Quite to the contrary; I think the ebook market will continue to grow and become much larger than anyone expects.
But what I am saying is that at this point- sub $99- price cuts will see diminishing returns as a growth driver for the market and become less important. People who can afford to spend significant money on ebooks can afford and justify an ereader purchase.
I think that brings us into agreement on the point of free with a bundle being the “cheapest” we’ll ever get. The race to zero exists only in the minds of certain analysts who think the point of ebooks is simply to kill paper books.
Peter: “I think I agree with you, although I’m not sure what you are referring to in the mobile phone market.”
What I mean is that Mobile phones used to cost a lot of money, but no longer. Only a small proportion of the population use expensive premium phones like smart phones after all.
Most people I know now, and the majority of ordinary young people, use mobile phones that come for 50 euros or less, and most then spend 30 euros on calls and texts every month. They don’t relate what they spend to buy their phone to what they spend on calls…
The comments made are interesting.
I feel the current technology must change before tablet PCs can become the norm for reading books and magazines, playing music and watching videos.
Like modern cell phones tablet PCs are useless in bright daylight – even when set to maximum brightness, the display looks black.
I see no real future for black ink on white paper displays – full hi-res color and video playback via 3g or 4g is the future – we just need a breakthrough in portable screen technology first.
It will also be interesting to see just how long it takes before somebody finds a way to unlock the kindles so they don’t show ads.
I expect we’ll maybe see something like the old book of the month clubs done with eBooks – sign up for 12 months of eBook purchases and get a free e-reader.
A free Kindle may have less effect than expected. Already the Kindle app is free for the iPhone, Android and BlackBerry, etc., and it is a far superior experience to the other free readers for Google books, I am sorry to say. I put it this way because I would prefer to buy ebooks from my independent bookstore, via Google books. But the flow is extraordinarily cumbersome compared to the seamless 1-Click service I get with Amazon to my Android phone. That’s where I read my books.
I have quite a few Edgar Wallace paperbacks* published during or between the World Wars, in a format known as the Yellow Jacket. This was a remarkably cheap edition for the times, and included interpolated advertizements.
I didn’t really find these ads annoying when I read the books**, possibly because they are black-and-white, and rather intriguing and quaint at this distance of time. There are only two or three ad pages interleaved into the story, with one at each end of the book and one ad printed on the back cover.
I think this would work well for people who need a cheaper edition in ebooks. Certainly the Agency price model is unsustainable, and has significantly reduced my ebook spending in the time since it was imposed. The majority of people are now poorer, but the ebooks were deliberatly made more expensive. In what universe does that make sense?
Incidentally, these Yellow Jacket paperbacks were never intended to last. They were a cheap, disposable edition for people who couldn’t afford “decent” editions. Some of mine are now nearly a hundred years old, and they’re certainly a bit tatty, but as long as the story is all there, they’re still readable.
I think ad-supported ebooks will have the same appeal, as long as the ads aren’t too intrusive, and you can pay a bit more for an ad-free edition. This stepped-price model is working for Kindle in choosing to borrow or buy some ebooks (and you can upgrade while reading), so it’s ready-made for ad-supported books.
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* Most of these titles have since been made available as public-domain (free) ebooks from Project Gutenberg. :))
** Due to illness, I became unable to read paper books: one reason for my early and enthusiastic adoption of ebooks, and my frustration with deliberately-imposed barriers to their use by disabled people, such a geographic limitations.