What happens to books when the Kindle is free?By Mathew Ingram
Amazon’s recent announcement of the Kindle Fire — its color tablet that may or may not become a competitor to the Apple iPad — was what got the most attention last week, but the online retailer also made some other announcements at the same time, including a drop in price for the original Kindle to $79. Based on the consistent and gradual declines in Kindle prices, some have speculated that Amazon could soon offer them for free, sponsored by advertising or other similar deals. Which raises an interesting question: What would free e-book readers do to the book industry?
As we’ve pointed out before, Amazon’s rationale in offering a tablet or other hardware (some think a phone is also a possibility) is the exact opposite of Apple’s. Apple makes most of its profits from selling hardware like the iPhone and iPad, and uses content — books, magazines, music, etc. — as a way of fueling demand for that hardware, while Amazon’s primary business is content, and it uses hardware as a conduit for getting that content to as many people as possible. So the original Kindle, for example, is simply a pipeline for getting books to people, and Amazon has continually expanded the types of content that Kindles can deliver, through programs such as Kindle Singles.
These not-quite-books can be written and uploaded by anyone, and offered at whatever price point an author decides: as little as 99 cents, or even free. Offering a free — or ad-supported — Kindle would presumably just provide even more of an avenue for these kinds of books to reach readers, and that in turn could (theoretically at least) make it possible for more writers to make a living from their writing.
New possibilities for e-book authors
You might not think authors — or Amazon, for that matter — would be able to generate much from 99 cent books, but you would be wrong. Young-adult author Amanda Hocking has become famous for making millions of dollars from her Kindle books in less than a year, without the help of an agent or a publisher (although she has since signed a publishing contract). Other self-published authors such as John Locke have sold millions of copies of their books. Some authors, such as J.A. Konrath, have noted that when they lowered the price of their books to 99 cents, they sold orders of magnitude more copies.
This message hasn’t gotten through to traditional publishers, who want to maintain the pricing structure that worked with physical books, and pushed through the “agency model” with Apple’s help (a move that’s currently the subject of a class-action lawsuit) in order to do so. As a result, Amazon has taken to doing an end-around publishers by signing up popular authors like Tim Ferriss. How long until it’s Amazon signing deals with self-publishers like Amanda Hocking, rather than a traditional agency?