slice of koh

Farhad Manjoo of Slate.com wrote an article claiming that “the amazing Amazon Kindle is bad news for the publishing industry.”  I actually don’t know if it’s all bad news.  It could be bad news for print, but it could be gift for digital publishing.

Why is Kindle 2 attractive to the consumer?  One advantage for the consumer is the ability to have a large library of books in one small form factor.  The Kindle 2′s internal storage capacity is 2 gig where about 1.4 gigs would be available for user content.  This is enough room for at least 1500 titles.  Additionally, the Amazon Kindle has the biggest selection of titles (240k+) compared to #2 Sony Reader (100k).  Many of the e-books are affordable and often cheaper than the print version.  The Kindle makes its easy to search, buy, and download e-books and other media content as it pre-syncs to your Amazon account, so you don’t need to hook up your device to a computer.  The Kindle connects through Sprint’s 3g network, and Amazon will pay for the connectivity fees.

Amazon also made some improvements to the user interface and design.  The Kindle 2 strived to be like “reading an actual book”.  The new Kindle provides a sharp, contrasting black-and-white 6″ screen for easy reading.  The screen reflects light like paper and does not suffer from glare.  Page turns are faster than the original Kindle, and there are a multitude of other features such as text-to-speech and dictionary search.

Why is Kindle 2 attractive to authors and publishers?  For one thing, similar to the heavy ITunes users that tend to buy more music, Kindle customers tend to buy and read a lot more books.  This is good news for both authors and publishers as it provides an additional revenue stream.   A big advantage for digital media content is its low distribution and development costs compared to traditional print publishing.  As rising costs of paper makes it hard for publishers to keep costs down and increase profits, releasing new content through a digital channel is very attractive from a business perspective.  The reach of Amazon’s Kindle service is attractive to new authors who are looking to easily sell and distribute their works while building a fan base.

Despite all the great characteristics, the Kindle 2 is a disruptor for the traditional print publishing business model.  First, the Kindle 2 only syncs to a consumer’s Amazon account tying them to one retailer.   As Amazon have the largest number of titles compared to any other e-book platform, any consumer looking to buy an e-book reader will choose the service with the largest selection of books.  This will make Amazon the undisputable leader in the e-book market and allow Amazon to influence everything such as pricing, marketing, and launch dates.  Amazon are selling e-books at a loss to build a consumer  base.  Once there is enough consumers, Amazon will be able to force publishers to lower these prices which could hurt their publishing revenue.

Additionally, the Kindle service is a closed distribution service; thus, publishers would be restricted to on retailer for their content unless they develop a different version for the other platforms.  Consumers would not be able to easily share the books they enjoy with others unless they purchase the content through their Kindle.  Nonetheless, a viable open-source media content platform could encourage consumers to freeload off of others’ purchases.  Businesses fear piracy more than being restricted to one retailer; however, I do agree with Manjoo that our culture accepts the tenet that books should be sharable with everyone.  This is why there is such thing as a library in almost every town and city in America.

Finally, the thought of having a digital reader is scary to any print publishing business.  Take a look at the newspapers and magazines, especially in news and finance.  Many of them have either gone bankrupt, don’t exist, or looking for a capital infusion.  The Internet has become the preferred choice to access news and finance immediately versus waiting for the morning paper or weekly/monthly magazine.   Print categories such as books and lifestyle magazines have survived this long because people valued browsing and reading tangible content as a way to get away from the real world.  So far, there really hasn’t been a viable digital platform that emulates the “book/magazine reading experience.”  Nonetheless, no one thought people would spend so much time reading and playing games on the tiny screens of their mobile phones.  It seemed like technology would catch up one day and encroach upon the bubble of books and magazines.

I am not convinced that the publishing industry is dead though.  Print publishing will always be around because you really can’t take your e-book reader to the bathtub or easily share the content with your friends and family.  Physical books and magazines still have an advantage in that respect.  The publishing industry will definitely change as more publishing firms will adopt digital content as another method of distributing and selling content.