Is Amazon's Kindle Ebook Reader a Money-making Opportunity for Authors and Publishers?

Jeff Bezos changed the way people choose and buy books when he started Amazon. For many authors, Amazon has been a lifeline, breathing new life into books that had long since stopped being stocked by most bookshops. Amazon's clever reader reviews, recommendations and "people who bought this also bought" feature have pulled dusty, forgotten books from the back of the store and stuck them in the front window again.

Now Bezos and the Amazon team are taking their revolution one step further. On November 16, 2007, they finally launched their much-anticipated electronic-book reader, the Kindle.

This new device is intended to make reading a book as easy and pleasurable on a portable screen as it is on paper. The big advantages the device has are that it can store more than 200 books, it can easily be updated with new books and it is light and portable. Most books, including new best sellers, cost $9.99. Some classics can be downloaded for as little as $1.99. Subscriptions to newspapers, magazines and blogs can cost 99 cents each or up to $14 a month.

Will the Kindle Succeed?

Content is going digital, of that we can be sure. Books, newspapers, radio, TV, magazines, courses and videos are all migrating to the Web. Many content producers are fighting the move, because making money online is seen as being far more problematic than in the "real" world, but user behavior is forcing the shift. Every bit of research undertaken on user habits clearly shows a reduction in the use of traditional media and an increase in the use of the Internet. In one survey of the "born digital" generation (that's 12- to 18-year-olds), 87% said they consider the Web to be their primary source of information. These are the customers of tomorrow.

Does it follow that if content is going digital, then a product such as the Kindle, which makes this content portable, will likely be a great success?

My feeling is that portable reading devices will eventually become the norm, but it certainly won't happen overnight, for several reasons. First and foremost, there is fundamentally nothing wrong with the paper book. People like books. They are used to them. Books don't crash. They can be shared. I think the baby boomer generation will take a lot of convincing to move to electronic books. The advantages are negligible for the average casual reader.

Second is the cost. The Kindle is being launched at $399, plus $9.99 for each book. That is a lot of paperbacks for little advantage. In addition, Amazon has decided to charge for a lot of information that is free on the Web, such as newspapers and blogs. Had they provided this information for free and just charged for books, they might have attracted the Web generation. As it is, early adopters will download the blogs and newspapers onto their smartphones and stick with paper books.

"So as a Content Creator, Should I Ignore the Kindle?"

No! While I don't think there is anything that you need to do immediately, you should proactively monitor how Kindle and similar products do. Portable reading devices will come of age and be an important means of distributing content. In the meantime, I can see several trends that could encourage their uptake and that could become near-term opportunities for the specialist information publisher:

- Business books - I think that ebook readers could be adopted by companies to distribute business books, reports, industry magazines and blogs.

- Schools and colleges - I believe there is a huge opportunity for schools and colleges to utilize these devices to provide a much greater variety of books and information for their students. It is common for teachers and professors to have their students read just a single chapter of a textbook, but this can be impractical in the physical world. Ebook readers could be the answer.

- Books without publishers - More and more books are being written and published without publishers. Many of them are available only in digital format to minimize costs for authors. If this trend continues, which I think it will, then ebook readers could become important devices.

- Value-added books - One trend that could happen is books becoming enhanced by third-party comments. For example, Tony Blair could add notes to Bill Clinton's autobiography, giving his perspective on events. In a digital content world, annotating and distributing the enhanced version would be easy to do.

- Free books - There are thousands of books out of copyright. If these books became available for free to people with ebook readers, it could create demand.

- Green pressure - Creating books, newspapers and magazines is a very energy-wasting, resource-draining, green-unfriendly process. We chop down trees, transport them to factories, mash them into pulp, move the pulp to other factories to press into sheets, ship the sheets to plants to cover them with ink, then use large machines to cut and bind them, and finally ship them around the world. The ebook reader makes this whole process go away. This could be one of the biggest factors that will make ebook readers successful.

Conclusion

Ebook readers will take off in the future as the technology improves, prices drop and the "born digital" generation becomes the mass market. In the meantime, there will be pockets of opportunity for online content publishers. You will need to keep an eye on developments and be creative to generate revenues from this opportunity.