Kindle Craziness

December 7, 2009

For some interesting MBA logic, read “Kindle Fantasies Are Running Wild — But, For Now, Amazon Is Losing Its Shirt.” I am not too keen on Amazon or the Kindle. Amazon’s financial reports are not too informative, and the data about its cloud services are expressed in mythical Amazon units. Spare me. The Kindle is annoying in its various incarnations. Among the reasons is the dorky snap on cover that can break the device and the when-pigs-fly search system that often launches itself when packing the gizmo away when the pilot tells me to turn off electronic devices. I have learned to live with the gray on dark gray screen and the clumsy keyboard, the experimental browser, and odd buttons. Kindle 1 had buttons that were too easy to push. Kindle 2 have buttons that are tough to use when reading on the elliptical exercise machine. The big Kindle is an invitation to breakage. PDFs and graphics generally are miserable experiences.

The article cited above sidesteps my points and goes into a more murky area; namely, the finances of Amazon’s selling eBooks. The key passage in the write up in my opinion was:

Publishers should be able to sell e-books to distributors like Amazon at $5 and still maintain the profit margins they enjoyed on print book sales.  In turn, distributors like Amazon should be able to sell e-books at the current $9-$10 price and still enjoy a healthy profit. The bad news for authors is that their royalties will decrease since they are based off of retail sales price.

I think that books of any type are going to be a financial challenge whether in print, online, or on a device like the Kindle. In case you have not noticed, books are not the way folks under 20 get their info. I don’t see the demographic bulges that are bursting with video, Web, and tweet consumers suddenly jumping on the book bandwagon. There are 320 million or so people in the US and most book readers are concentrated above 42nd Street, in university burgs like Charlottesville, Virginia, Washington, DC, and a half dozen other major cities.

The numbers presented in the write up appear rational, but the thinking that gives rise to this type of analysis is oddly disconnected from the reality of the publishing business. Can traditional publishing survive with a shrinking pool of book readers? Check out the argument in Carnival Culture: The Trashing of Taste in America. That 1992 future is now here. When a blockbuster fails to materialize for book publishers, the decline will be sure and steady. In fact, that’s what is happening right now in publishing. When Google provides good enough options to get nuggets of information, the revenue bleeding will be slow and the open wound will lead to financial Streptococcus pneumoniae. Prognosis: no marathons for the victim. Publishing outfits may just wheeze along.

Don’t expect gizmos and price wars to change the descent. Just take a look at your kids. Reading a book? Not likely for the majority of families I assert.

Stephen Arnold, December 8, 2009

Oyez, oyez, I want to disclose to the Department of the Army that books are not what they once were. If you know someone in the Army responsible for recruit training, run your book argument by that non commissioned officer and let me know what you hear. By the way, this is a free blog. You will have to pay the author of the cited article to get their reasoning for financial bonanzas.


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