What direction should Amazon go with the Kindle?

The Kindle is less interesting than a tablet. But it has some very good points to it.  Convenience is one, the connection right to the Amazon store is something some people like. It’s light and has a sharp reflective screen that can be read inside or outdoors. On the flipside, though it’s slow and  it doesn’t do media or animation. The iPad, which is selling a lot more units per second than the Kindle these days is more useful to people because it gives them abilities to surf, game, and create. Thousands of apps add to it’s feature list. It appeals to young and old. It’s a device you can experiment with, you can add onto it. The 6″ Kindle is half the price of the iPad, but the big Kindle DX is the same price $500  as the lowest iPad with the same size screens.  Someone ready to buy either one has to answer the question would they rather read in bright sunlight on something like a paper page, or get something with a lot more sizzle, that you can play with, watch video and produce content too?

The point I’ m making is that if people essentially don’t care about the e-paper screen or the sunlight issue, the iPad makes a lot more sense. You can buy the same books, you’ll get a better view of the photos in color. You can quickly get out of that book and switch tasks in an instant. You can consume AND create. Sure the iPad’s LCD will probably strain your eyes faster, but it might also fill a couple niches in your life. Tablets like the iPad can be the perfect living room device for sharing and playing.  (Damnit no camera on this thing?)

So if you were Amazon and you want to continue to sell more Kindles, you need to raise its appeal.  Seth Godin wrote today for his Kindle friends that they should get the Kindle priced down to $49.00 and increase the attractiveness of buying ebooks with book-of-the-month club purchases.  He added that corporations should be able to buy them for hundreds of their employees and be able to push their own content such as technical manuals or maybe annual reports to everyone in the company. Godin’s ideas make a lot of sense. And if the prices were right, you can turn more people into Kindle users if you can make the ebooks more attractive too.

I have one solution for Amazon that might make a biggest difference though. Amazon really needs to take a very close look at Valve’s Steam store and copy the hell out of it. Steam is a website for downloading PC games (Macs now too). Games are like first cousins to ebooks, both are digital content of an unlimited supply. If you have a desire to play a new game, much like you might feel a desire to read a new book, you can go to Steam and see latest best sellers. But something really obvious on the Steam store are nice shiny buttons to take you to games under $10 and under $5.  Something for everyone.

The next great thing Steam has is sales on games on one particular day a week or over a weekend. If you’re visiting the site frequently and paying attention, you can grab a $40 game for $20 for example. Lastly, you can buy packs of games under certain publishers for big discounts too. Valve, the creators of the Steampowered store sell the complete Valve pack. Close to 20 Valve games. Buy the pack, you save a $100.  Actually you’re saving a lot more because many of the games are well below their original retail price already.  The Valve pack at $99 is enough gameplay online and off to keep you busy for a while. It’s instantly downloadable content too. And you can download it to different locations.

This is the trifecta. This makes Steam a very attractive place to shop for games. Books are a little different yes, and it will take a lot of work with the publishers, but it’s the only forward looking move that you can make with ebooks right now.  Amazon has the publisher partnerships, something that Valve had to work really hard to do. Amazon has the advantage of a lot more book titles than games.  Publisher book packs could be in many different flavors of collections. For example Penguin Books, who just finally came to an agreement with Amazon on their best seller prices could sell best sellers as a discounted pack of ebooks, or packs under a certain topic, such as a technical area of expertise and make these collections accessible and affordable. Not only that, but publisher packs also help the reader identify the publisher. Readers might look forward to the next Penguin or Wiley book because that pack they bought last time had all the good stuff.

Think how powerful it would be if Amazon could just layout prices of new books at discounts where you really feel fortunate as a Kindle owner. Say 6 months after a hardback book is released, Amazon could have a 24 hour sale on the book pricing it $5.99 rather than $9.99. It’s still a new book and because it’s a one day only, and perhaps a never repeated sale, the lower price doesn’t devalue the normal price or the physical book price. Anyone who missed out, too bad, but it would be consoling to know another sale will come soon enough and they just need to check back often. Sales can be promoted through all kinds of social channels too. Ebook sales are easy. The supply is unlimited. If nobody buys, who cares! Everything that happens or doesn’t happen is a valuable and instant learning opportunity.

Right now on the web page for the Kindle store, they don’t have a bargain bin, though they do have some cheaper books. Finding ebooks at $7.99 and even $2.49 didn’t take long.  But it’s not presented in a way that’s good for impulses like a retail store is. If you look at the best sellers category for example, they actually think crossing out the other price is a good way to make the Kindle price look better. Look at the price(s) for the top left book in the photo below. Oops! Funny thing is, I’ve hardly ever buy a book at list price. Do they even use the list price at Borders or Barnes and Noble? Seems like all new books there have a discounted sticker of at least 10%.  Amazon fails to entice me with this overused cross-out original price tactic. I’ve never bought a book at full price at Amazon. If that’s what they sold them for, I doubt I would shop there as often.

Next we have a page with best sellers in the Kindle Store. 2 columns. Top 100 paid, and Top 100 Free.  Once again we have a problem. The good news for consumers. About 10% of these top 100 were priced under $5.  The bad news for Amazon, you have to pay attention to see that. Why don’t they just have the $5 or even the $2.50 category?

I love a top 100 free category, but if they have the free column, there’s no reason not to have top 100 under $5.

Multiple surveys I’ve seen have indicated that people think a reasonable price for an ebook is $5 and under.  Why is this category not here and promoted on the front page of the Kindle store?  If it was, anyone getting a Kindle will at least know, hey this is cool and there are a bunch of books for only a couple dollars. They know they’ll have plenty to read, they also know they might be rewarded for paying attention to discount days.

Publishers need to get it through their heads, Unlimited supply changes things. They need to help these e-reader stores become attractive through book pricing and big 50% and 75% off sales.  And they need to start yesterday. If they’d rather wait, they might as well choose to not do ebooks and face the consequences of being paper only.  Ebooks fit the model of selling more at a lesser price. Publisher have repeatedly said that the cost of printed books is negligible, but this is the biggest lie. Because it’s not just printing. It’s shipping, it’s employee and warehouse handling, inventory, real estate, insurance, etc.  Ebooks eliminate much of this and allow for more affiliate marketing opportunities.