Shameless plug: this blog is available for Kindle. In fact, it has been available for Kindle since before your grandmother was born. I’m rarely an early adopter of anything, but I was pretty into the Kindle when it first came out and I made sure to get the maximum use out of it.
Now that the Kindle has come down in price, and Amazon’s kindle books outsell their hardbacks, I’ve been thinking again about the future of the device. Really, the thing I love least about it is the Digital Rights Management. Especially because Microsoft, Apple, and the notorious RIAA have all learned the DRM lesson before. Amazon’s is tamer than most in that it is mostly invisible, but let me pitch you an idea:
Amazon should become a publishing house.
I know this idea is going to get me into trouble with my writer friends, who will all protest something along the lines of “We will all starve and DIE! Do you want that, Ryan? Is that what you’re suggesting?” except they will do it with graceful prose. But here’s the thing: if Amazon keeps its DRM and begins publishing, two things will happen. One, they will sideline all the publishers currently generating content for Kindle. Two, they will concentrate on publishing mass-market cash cows (read: crap). This combination will decrease available variety, thereby devaluing the Kindle device.
Here’s what should happen instead: Amazon removes DRM from the Kindle and becomes a publishing house. Art-housey publishers everywhere will jump at the opportunity to sell art-housey literature to a whole new audience. Art-housey consumers will start buying Kindles because of all the suddenly-available art-housey content. Writers are happy because they are selling more books. Amazon is happy because they are selling more Kindles, plus they are cutting out Stieg Larsson’s pesky publisher Knopf out of the equation. Consumers are happy because they can do more with their Kindle. What’s not to love?
2 Comments
I actually don’t think digital publishing is going to make writers starve any more than they already are. It may make printers starve. It may make some publishers starve. Writers are the source of the commodity, not the purveyors, and the most popular writers will continue getting the most income as usual. The only bad thing about digital publishing (and the reason there’s DRM) is that it’s so easy to pirate the commodity. (Even with DRM, it’s very easy to give away a song you’ve purchased through iTunes.) So just as bands now have to tour a lot more to make ends meet (and their agents’ job has become surfing the net daily to harass sites that are giving away their songs for free), writers are going to make most of their income from teaching gigs and honoraria. Though even that, for writers anyway, has been true for years.
For Amazon, the mass market cash cows are the name of the game. People go to Amazon because they know Amazon will have those books and will sell it for cheaper than a traditional bookstore. DRM is a necessary component because those who control the content will not allow it to be distributed through any channel that does not protect its IP rights. I’m actually working on a deal right now involving a video DRM-provider that sells products to CE companies and distribution channels like cable and satellite, and it’s pretty much the same idea. Amazon actually does offer certain self-publishing services already, and I wouldn’t be surprised if at some later point they decided to publish under their own imprint. However, my guess would be that they would publish discount versions of content that is already in the public domain because the costs of acquiring that content are very low. Amazon is essentially a volume business. They sacrificed profitability for a number of years in order to increase their market share. Now they are a major distribution channel and their volume is such that they generate billions in free cash flow per year (check out their latest 10-K, it is truly amazing). The more scale they get, the more profitable they become and traditional booksellers who have far fewer inventory turns, longer payment cycles and much higher fixed costs are basically getting blown away. The biggest problem for Amazon right now is that they are in a fight to the finish with Apple to determine which device (and hence which distribution service) will dominate the landscape for those mass market cash cows. Amazon’s approach has been to drop Kindle prices and try to increase its market share that way, but it’s unclear whether that will be enough to overcome the potentially greater mass appeal of the iPad. One clear beneficiary has been the publishers, who can now force Amazon back to the bargaining table and prevent them from demanding lower wholesale prices in the future.
I think the future for independent content providers may look a lot like Pandora. Most of the music on Pandora is actually indie. Thanks to the power of their music recommendation system, Pandora is able to take people’s starting preferences (which generally tend towards mass market songs and artists) and nudge them towards things they would not have otherwise discovered. The main problem with replicating this approach is the investment it requires. Pandora employs scores of great musicians and makes them undergo a rigorous training process. They need to decide not only whether a song is “good,” but they also need to determine the core attributes of each song, which can be subjective If Amazon or any other content provider were to attempt this, they would likely need to develop whole new sets of core competencies. Amazon currently does have a recommendation engine, but like Netflix’s, it is software-based and generally seems to be less effective than Pandora’s (and may be less likely to orient people towards new content if the recommendation engine is driven by the preferences of other users, as is often the case).
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