Tuesday, November 20, 2007

A Pricing Analysis of Amazon's Kindle E-Book Reader



The latest publishing buzz is Amazon's introduction of the Kindle, a new e-book reader. At $399, it's a bit pricey: Sony's e-book reader is $100 less. And there are many e-books that can be read on PDAs-- even if you're dealing with text-only on a much smaller screen, you don't necessarily need a separate device. But the Kindle offers some pretty cool features, and the books and newspapers that are available to be read on it are discounted quite a bit compared to their print versions. Can the Kindle end up paying for itself?

I actually had a chance to play with one of these a few months ago. I thought the size and weight were ok, and the experience of using it was pretty impressive-- not perfect, but better than any other portable electronic reading device. I liked the fact that it was a stand-alone wireless product: if you're traveling or at the beach and you decide you want to read something, you can go online and download it without having to go back to your computer, and without having to subscribe to any sort of wireless plan or be at a hotspot since it's on a cell phone network. All in all, I was intrigued by what the device could do, but as a dedicated PDA user, I didn't see myself buying another electronic device to tote around. (Also, a large percentage of my reading is done in manuscript form before the book is actually published, and though I could probably do some of that electronically, I'm not necessarily the ideal user for this product.)

But when I tried the Kindle, I didn't even think about the costs that might be involved. A lot of early comments have focused on the fairly high price of the device-- is it worth the money?

Books: NY Times Bestsellers and New Releases are $9.99 on the Kindle. For hardcovers that are $25 and up (the new Ken Follett hardcover is actually $35, which seems like a shocking price for fiction, even if it is over 1000 pages!), you're saving at least $15 per book. If you buy 26 hardcover books, the savings offset the price of the Kindle.

Newspapers: the NY Times is $13.99 a month. I pay $40.80 a month for delivery of the print edition. 15 months of subscribing saves you enough to pay for the Kindle.

Magazines: The Atlantic is $1.99 a month on the Kindle. Amazon offers subscriptions to the print edition at $24.95 a year, or $2.08 a month. The cover price on a newsstand is $4.95. No big savings for subscribers, but if you'd been buying individual copies, your savings would pay for your Kindle in, oh, about 11 years.

Blogs: $0.99-$1.99 a month each. Well that's not much of a deal, is it? Blogs are usually free, so here's one area where the Kindle doesn't exactly win. But compared to the cost of having a wireless Internet plan that allows you to go online and read blogs anywhere on a laptop or handheld, it might be a good deal, at least if you only read a few blogs. Their current selection is not all that great. None of the personal finance blogs that I read are included. From a quick search, the only blog I read that's on there is Apartment Therapy, which is one of the $1.99 ones. Until My Open Wallet is available in Kindle format, obviously this feature of the device is useless.

Bottom line: if you are someone who reads a lot and likes to read current bestselling hardcovers when they first come out, the Kindle could save you quite a bit of money. It's also probably lighter and smaller than that doorstop by Ken Follett, so you might avoid some chiropractor bills too. And aside from anything else, it's a nifty new electronic toy that I'm sure will end up under the Christmas trees of many people whose loved ones wonder what you get for the person that has everything... What do you think? Would you buy one?

7 comments:

Anonymous said...

I buy my books used if I buy them at all. I love libraries. So I don't think this would make financial sense for me.

I'm also a literal bibliophile and love the smell and feel and experience of a book.

If I were a rich person who thought it was a good idea to buy new hardcovers, I'd probably go for this and then buy them used if I wanted to have a real copy. Save money all around.

(Immediately starts plotting to get Mrs. Micah Kindle-friendly. Then realizes that nobody would pay (yet) to read it.) Well, when I'm a famous blogger then I'll make my side Kindlable.

VixenOnABudget said...

Although I would never spend the money to buy one for myself (I still don't have an iPod either)... I want one!

Mike G said...

Financially it doesn't really work at all - in your example of the Kindle paying for itself if one were to download 26 hardback books instead of purchasing at $25 or more, that is esp unlikely - no one pays full price for books anymore anyway - Amazon itself sells almost all hardcover bestsellers at a 40% discount, a $25 book for $15.

Plus if you lose this electronic gadget or drop it and it breaks, you're out $400. Or if it's stolen. I don't mean to sound negative but financially it's very difficult to make a case for this thing.

Anonymous said...

I love books - paper books. I read a decent amount of ficition, but a lot of non-fiction, and just like I was in school, I highlight and write notes in my books. It's my love of learning and that's my learning style and I feel I would lose out have to read a screen.

I try to be green, but at work, I print out important documents to read on paper and take notes.

My Gen Y staff thinks their Gen X boss needs to catch up. :)

Madame X said...

Canary-- excellent point, I definitely should have accounted for the discounting that most stores do on bestsellers.

Bikini brief Rob! Love your new nickname! I hope all your friends call you that too!

Bitty said...

I suspect this will either go the way of the e-reader and disappear or the way of the VCR and be replaced by something better.

And yes, I like books, paper books.

I read somewhere that it holds 200 books. Big deal. That's just one bookshelf in my house.

Furthermore, I have yet to be convinced that I have any use for an iPod...

Anonymous said...

I'm not going to rip it yet. People didn't think the iPod was going to be the success it was at its price point either.

The parts that intrigue me the most: foreign newspaper subscriptions and the potential for self-publishing.

I would love to read foreign newspapers. Both to keep up my language skills and to get a different point of view. But this is very hard to do both in a timely and cheap way. So this feature is attractive to me.

Similarly, I'm intrigued by the notion that you could email documents to the device in a format that can be read on them. Does this give people the first electronic platform that would allow self-publishing to be realistic as a business plan?