Dispatch September 2009

The Kindle Problem

Successful products need to offer great experience or great convenience. Amazon’s e-reader falls short on both.
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Life, it turns out, is a series of tradeoffs between great experience and high convenience. McDonalds:  convenient, but not such a great experience. Disney World: ah, there’s a great experience, but not so convenient. Most successful products and services aim for one or the other, but not both. Products and services that offer neither tend to fail.

That’s why, despite all the great press it’s gotten, Amazon.com’s Kindle may be in trouble: in aiming to provide both a great experience and supreme convenience, it has achieved neither. And unless it can be revamped to truly distinguish itself, either as the best reading experience around (superior to the old-fashioned book), or as the cheapest and most convenient reading outlet available, it may be doomed to fail.

A year ago—six months after the Kindle hit the market—I talked with Amazon’s CEO, Jeff Bezos, for a book I was writing. He told me sales of the Kindle were sizzling. But that’s not quite the case if you really look at numbers. While Amazon did sell out of Kindles in 2008, it hadn’t actually made that many of them. In fact, according to the market research firm In-Stat, the entire e-reader market consisted of just 1 million units in all of 2008, and Amazon nabbed only a slice of it. By contrast, Microsoft sold about 1 million Zune music players from mid-2007 to mid-2008, though the product was widely considered to be a failure.

Given the careful study and expertise that went into it, the Kindle should have been a tremendous success. Bezos and his core team devoted months, beginning in 2004, to analyzing the appeal of the book and to understanding why books have dominated the delivery of long-form narratives, stories, and information for 550 years. “We even got into how books smell,” Bezos told me. “We did research, and found that the smell is mostly glue – glue and maybe mildew. We joked that maybe we should have a spritzer on the [Kindle] that would send out that smell.” All in all, Bezos said, the team found that trying to improve on the book “was one of the most absurd challenges.”

After months of meetings, the team agreed on one particular concept that they felt rang true: the best thing about a book is that it disappears. You start reading, and you don’t notice the physical book itself, just the words and ideas on the page. “So three years ago, we said we have to make sure the device gets out of the way just like a physical book so you can lose yourself, but at the same time you’ve got to find some things that you could never do with a physical book and we have to do those things amazingly well,” Bezos said.

To beat the book – to be better than the book—Amazon also drove the Kindle toward convenience. It built in wireless communications so that a Kindle could download e-books, newspapers, magazines, and blogs anywhere, anytime. When Kindle launched, it had access to about 90,000 books (now it’s more than 300,000), nearly all priced at $9.99. That’s far less than hardcover list prices (though only somewhat better than Amazon’s discount prices). Bezos’ eventual goal was to make millions of titles available from Kindle at the touch of a button.

But loading up the kindle with so many appealing and convenient features was expensive, so the Kindle ended up priced at $300-$400. And while many people are willing to pay a couple hundred dollars for an iPod without giving it much thought, that’s because music lovers expect to rely on a device to play their music—whether it’s a portable CD player,  a Walkman tape player, or a home stereo. Readers, on the other hand, are not accustomed to having to buy a device in order to read their books. Paying $300 or more for a device to read books, in other words, is highly inconvenient.

On the reading experience side, the Kindle ended up on shaky ground, too. For people who love books, there are quite a few intangibles that an electronic device will never quite be able to replicate. For example, the Kindle lets readers down with respect to one subtle but powerful element of the traditional book’s appeal: its role as an identity marker. Pulling out a particular book on an airline flight or in a doctor’s office can mean staking a claim to being a particular kind of person. Likewise, the books lining your living room or office can tell others about your interests and background. But on the Kindle, no matter what you’re reading, all anyone else will see is an unchanging plastic device.

All in all, the Kindle ended up caught in a no-man’s land: it has a number of nifty features and convenient aspects – but also significant drawbacks and a high price tag. All of which leaves many consumers unconvinced that they really need to buy the thing.

Meanwhile, competitors have spotted an opening and are taking the opportunity to try to elbow the Kindle aside. As of this year, Google has made 1 million public domain books available for free on the Sony Reader, which is priced at $100 less than the Kindle. By thus joining forces, Google and Sony just might out-convenience Kindle. And in September, Asus, maker of the bargain-basement EeePc netbooks, said it, too, will make a super-cheap e-book reader.

What should Amazon do? Given the device’s inherent limitations, which make it impossible for the Kindle to ever outdo the appeal of the traditional book in every way, Amazon would probably do best to concentrate on the convenience angle. Bezos already has the right approach, with his goal of making every last book available to readers within 60 seconds. If he can achieve that goal, the Kindle will surely be the most convenient bookstore ever. But cost is a facet of convenience, too.  And that suggests that the Kindle needs to dramatically drop in price.

In fact, a recent Forrester Research study found that mass-market interest in e-book readers rockets when the price hits $98 or less. If the cost of a Kindle were to drop to that level, and if the ease of buying and storing books on it can blast past the convenience of buying and lugging around physical books, then consumers might at last discover that the intangible appeal of the old-fashioned book really isn’t so hard to get over after all.

Kevin Maney, a journalist who has written about technology for 25 years, is the author of Trade-Off: Why Some Things Catch On, and Others Don't, published this month.
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