A year ago I wrote a column titled "E-Book Readers Can Do Better" that outlined what products like the Amazon Kindle and the Sony Reader series would need to add before they truly appealed to mainstream consumers. One year and one tremendous endorsement from Oprah later, Amazon's Kindle 2 incorporates a lot of my suggestions. Still, it isn't the latest Kindle that's cemented Amazon's leadership role in the e-book market. It was today's announcement of a free Kindle reader for the iPhone, because it shows that Amazon really understands what e-books are: software.As a serious book lover, that's difficult for me to admit. My first edition copy of Ernest Hemingway's Winner Take Nothing is one of my most prized possessions. Seven Pillars of Wisdom, by T.E. Lawrence, complete with its fold-out maps of the Arabian Peninsula, is one of the best things I've read in my life. Carrying my entire book collection up to my fourth-floor walk-up apartment required a fair amount of sweat and even a few tears. Yet despite the vast potential energy of my hundreds of books, their contents would likely fit inside a single Kindle 2. It can, after all, hold 1,500 titles. Good or bad, this is the world we now live in. And Amazon gets it.
Amazon has been wildly successful in the e-book biz. Last year, Kindles literally sold out. But this hasn't kept the company from supplying Kindle for iPhone, a move that's guaranteed to cut into Kindle 2 sales. The thing is, it will also help Amazon sell a lot more e-book titles, and will go a long way toward making Kindle the de facto e-book publishing platform in the U.S. Amazon's not just selling razors, after all—they're also selling the blades.
The move also indicates that Apple has ceded the e-book market to Amazon. That is probably best, since the iTunes franchise is already stretched thin distributing songs, music videos, TV shows, movies, podcasts, and iPhone apps. "iTunes Store" has become a misnomer; it seems like a name change is overdue. Still, to see Kindle as merely an e-book platform is to miss the forest for the trees. Kindle doesn't just mean books. It is a secure content delivery platform that can be used by every blog, magazine, and newspaper on the Web.
Most of these companies already publish on the Web, but the Kindle platform offers several key advantages. The first, naturally, is DRM protection. Amazon says it is up to content providers to choose or refuse DRM, but so far almost all of the book publishers have chosen to lock up their books. Given what's happened with the music industry, can you blame them? I would love to see a more open format, like ePub, supported by the Kindle, but given Amazon's current success that won't likely happen anytime soon.
For newspapers, magazines, and blogs, the issue is less DRM than it is fulfillment and subscriber management. As many of you know, PCMag.com recently went 100 percent digital, ceasing to print a paper magazine to focus exclusively on the Web and Zinio digital edition. One of the reasons we partnered with Zinio was so we would have a company that could bill subscribers and manage their accounts. Not many people have managed to do that on the Web, but platforms like the Zinio and Kindle offer a way for readers to get service and for publishers to get paid.
Before I coronate Amazon as the king of cloud-based content distribution, I'll point out a few places where the company could run aground. One problem revolves around Amazon's dual role as hardware and software vendor. First of all, it could cling too tightly to its closed format. Open-minded publishers like Tim O'Reilly, founder and CEO of O'Reilly Media, have already balked at joining Amazon's single-source, single-file-format delivery system. As the market grows, so will the demand for alternatives. Even Apple supports multiple file formats on the iPod.
Hardware devices like the Kindle are also vulnerable on the price front. $359 is a tough sell in a miserable economy, especially when you can buy a netbook for around same price. A raft of more basic, less-expensive e-book readers are slated to hit the market this year. They won't likely be as easy to use as the Kindle 2 or feature its wireless content delivery, but they'll probably appeal to the cost-conscious consumer who wants to get into electronic books.
My advice for Amazon is to push the books over the devices—the blades over the razors. The Kindle's competitive advantage isn't in its e-ink display or plastic keyboard, but in the 230,000 titles available at the click of a button. Amazon has become a real software publisher in the truest sense of the phrase.
Taken from pcmag.com
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