We have for years on S&F been a big fan of the idea of the eBook, but always tempered our enthusiasm with the proviso that the eBook was pretty much a non-starter commercially until the day when the proper display technology became widely available. With the introduction of E Ink technology as used in Amazon's Kindle
as well as others, that day has, in large part, arrived (there are a few problems that need to be worked out, such as display speed and a lack of colors other than grays and black).
Predictably, the Kindle has taken off, and has been counted a success. But to our way of thinking, Amazon has made a cardinal error in the marketing of the Kindle, and consequently its success is but a fraction of what it could and should have been. Had any other entity come up with the Kindle, that cardinal error would not have been an error at all, but simply sound business practice. Given its unique position, however, for Amazon it's an error that's costing them millions of dollars — perhaps even tens of millions — in lost sales per year, and, worse, is impeding the growth of the eBook market, and the real beginning of the eBook revolution.
And the cardinal error?
For that, let's look back a bit at another successful invention, and the stroke of marketing genius that made it a spectacular financial success: the safety razor.
In 1904, inventor and entrepreneur King Camp Gillette was granted a patent on his invention of a razor that used a disposable razor blade. The razor consisted of two parts: the razor blade "holder", and the perfectly sharp disposable razor blade itself which, after a number of shaves had dulled it somewhat, was simply thrown away and replaced with a perfectly sharp new disposable razor blade.
And the stroke of marketing genius that made that invention a spectacular financial success?
Gillette saw, if not immediately, that the money to be made from his invention was not by sales of the razor blade "holder", but by sales of the disposable razor blade itself the sales of which over the years would number in the thousands for each razor blade "holder" in use. Accordingly, Gillette decided to all but give away the razor blade "holder", for he understood he was not in the razor blade "holder" business, but in the business of selling disposable razor blades.
Back to Amazon.
In marketing the Kindle, Amazon has taken the position they're now in the eBook reader business; ergo, the Kindle's retail price of $259 per unit.
But that's exactly the wrong position for Amazon to have taken, and a cardinal error in their marketing of the Kindle. Amazon should all but give the thing away for nothing because, uniquely for Amazon, they're really not in the eBook reader business, but in the eBook business as that's where the money is, and you can't sell a Kindle eBook to someone who has no Kindle eBook reader. If Amazon sold the Kindle for, say, $99 (or not much more than that) even if it cost double that to manufacture, they'd be way ahead of the game as at $99 per unit every book reader in the world could afford, and most would buy, a Kindle, and then the eBook revolution would, finally, after a number of false starts, be off and running, and the floodgates would be opened for Amazon to rack up millions upon millions of dollars in sales of Kindle eBooks — year, after year, after year, ad infinitum (well, for a really long time, at any rate).
We truly want a Kindle, but at $259 it's just too dear for our limited pocketbook. But a Kindle at $99? We'd buy it in a heartbeat, and dozens of Kindle eBooks per year to fill it.
Jeff Bezos, are you listening?
as well as others, that day has, in large part, arrived (there are a few problems that need to be worked out, such as display speed and a lack of colors other than grays and black).
Predictably, the Kindle has taken off, and has been counted a success. But to our way of thinking, Amazon has made a cardinal error in the marketing of the Kindle, and consequently its success is but a fraction of what it could and should have been. Had any other entity come up with the Kindle, that cardinal error would not have been an error at all, but simply sound business practice. Given its unique position, however, for Amazon it's an error that's costing them millions of dollars — perhaps even tens of millions — in lost sales per year, and, worse, is impeding the growth of the eBook market, and the real beginning of the eBook revolution.
And the cardinal error?
For that, let's look back a bit at another successful invention, and the stroke of marketing genius that made it a spectacular financial success: the safety razor.
In 1904, inventor and entrepreneur King Camp Gillette was granted a patent on his invention of a razor that used a disposable razor blade. The razor consisted of two parts: the razor blade "holder", and the perfectly sharp disposable razor blade itself which, after a number of shaves had dulled it somewhat, was simply thrown away and replaced with a perfectly sharp new disposable razor blade.
And the stroke of marketing genius that made that invention a spectacular financial success?
Gillette saw, if not immediately, that the money to be made from his invention was not by sales of the razor blade "holder", but by sales of the disposable razor blade itself the sales of which over the years would number in the thousands for each razor blade "holder" in use. Accordingly, Gillette decided to all but give away the razor blade "holder", for he understood he was not in the razor blade "holder" business, but in the business of selling disposable razor blades.
Back to Amazon.
In marketing the Kindle, Amazon has taken the position they're now in the eBook reader business; ergo, the Kindle's retail price of $259 per unit.
But that's exactly the wrong position for Amazon to have taken, and a cardinal error in their marketing of the Kindle. Amazon should all but give the thing away for nothing because, uniquely for Amazon, they're really not in the eBook reader business, but in the eBook business as that's where the money is, and you can't sell a Kindle eBook to someone who has no Kindle eBook reader. If Amazon sold the Kindle for, say, $99 (or not much more than that) even if it cost double that to manufacture, they'd be way ahead of the game as at $99 per unit every book reader in the world could afford, and most would buy, a Kindle, and then the eBook revolution would, finally, after a number of false starts, be off and running, and the floodgates would be opened for Amazon to rack up millions upon millions of dollars in sales of Kindle eBooks — year, after year, after year, ad infinitum (well, for a really long time, at any rate).
We truly want a Kindle, but at $259 it's just too dear for our limited pocketbook. But a Kindle at $99? We'd buy it in a heartbeat, and dozens of Kindle eBooks per year to fill it.
Jeff Bezos, are you listening?
It's The Music, Stupid!
Peggy
