Amazon Device Doesn't Need Computers
The following was published as an article in the November 20, 2007 New York Times.
By SAUL HANSELL
Published: November 20, 2007
Jeff Bezos knows that the world is not exactly clamoring for another way to read electronic books.
“If you go back in time, the landscape is littered with the bodies of dead e-book readers,” Mr. Bezos, the chief executive of Amazon.com, said yesterday.
Mr. Bezos is hoping that Kindle, an ambitious $399 e-book device that he introduced in New York, will avoid that fate. Kindle, which Amazon spent three years developing, lets users wirelessly download best sellers for $9.99 each, and it is designed to be simpler to use and more comfortable to hold than similar devices.
Most significant, Amazon has made it easy to shop for and buy books through Kindle without using a computer. The device connects to a high-speed wireless data network from Sprint, and wireless delivery is included in the cost of books and other products. Downloading a book takes less than a minute.
Mr. Bezos said Kindle was most likely to appeal to travelers and others who want to carry several books with them.
“Anyone who is reading two, three, four books at the same time should have one of these,” he said in an interview. Kindle can store 200 books at once.
Mr. Bezos added that he thought Kindle would be more comfortable for people to curl up with than previous reading devices. It weighs 10.3 ounces and uses so-called electronic ink technology licensed from the company E Ink, based in Cambridge, Mass.
The screen reflects light, making it easier to read in a bright room, and it uses less power and generates less heat, because there is no backlight to the display.
Kindle will also download and display newspapers, magazines and blogs. Among the newspapers available are The New York Times for $13.99 a month and The Wall Street Journal for $9.99 a month. Some 300 blogs are available for 99 cents or $1.99 a month. Amazon shares some of that fee with newspaper and blog publishers. The device will only be available at Amazon.
Amazon, which is one of the world’s largest booksellers, reached agreements with all the major publishers to sell their wares on Kindle. It has about 90,000 titles so far and 90 percent of current best sellers.
Sony, which introduced an e-book reader a year ago, has about 20,000 titles for sale.
Publishing executives said they were optimistic about Kindle.
“You kind of understand why it has been three years in development because it offers so much in an uncomplicated way,” said David Young, the chief executive of the Hachette Book Group USA, which owns Little, Brown.
“The big challenge, of course, is that it is still relatively expensive,” he added. “You have to be a very committed book person to get a repay on that investment.”
The publishers themselves are concerned about return on investment; most have been spending a great deal to digitize their libraries for electronic readers, with little to show for it so far.
“If it does contribute to the many millions of dollars we have invested as an industry, that’s great,” Mr. Young said.
Amazon and the publishers declined to discuss the specifics of their financial arrangements. But several publishing executives said the industry practice was to sell an electronic version of a hardcover with a list price of $27 for about $20. While deals vary, the wholesale price of a $20 e-book is about $10, and most retailers have been selling them for about $16. The publishers said Amazon was paying about the same wholesale price as Sony and other e-book vendors.
By offering best sellers for $9.99, Amazon is leaving no profit margin, and it will have the expense of paying Sprint for the data transmission. Amazon says it hopes to make money on older titles that have better profit margins.
Digital distribution of books would seem to have a lot of benefits for publishers. So far there is not much book piracy online (although there have been some high-profile leaks, most notably that of the latest Harry Potter book).
There also is not much pressure to break books into smaller pieces, in the way that people want to buy songs, not albums. And there are no conflicts with distributors of the sort that complicate the online video business.
Indeed, e-books have the potential to save publishers the cost of printing, distribution and returns. But publishers said their biggest hope was that Kindle would expand sales of books to a new generation of gadget lovers.
“We have great authors, and we want to get our books to readers, and this is another channel to us,” said Kate Tentler, senior vice president for digital media at Simon & Schuster.