Scott Marlowe, fantasy author

Scott Marlowe

Author of the Alchemancer and Assassin Without a Name fantasy series

Amazon Kindle: Now, is the price right?

Amazon cut the price on their Kindle digital e-book reader again. This marks the second price cut of the year so far (the previous cut was $60). With Christmas rapidly approaching, and more digital readers hitting the market all the time (now, Barnes & Noble is going to sell one), one wonders if we won't see another price cut—or possible holiday price reductions—before the year is out.

As it stands now, here's the current breakdown of Kindle models and prices:

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The $259 and $279 Kindle differ only in that the latter allows one to download e-books when traveling abroad (outside the United States). The Kindle DX is the deluxe, super-sized Kindle, with a larger reading screen and more memory. Scott Hanselman, a technologist whom I follow on Twitter and whose blog and podcast I read and listen to regularly, has a nice post up about the differences between the Kindle and the Kindle DX if you'd like to read more on that.

Given this most recent price reduction, I'd like to dig up an older post of mine, How much does the Kindle 2 really cost?, where I cited an article where the author ran through a cost-justification of the Kindle 2. The author makes a comparison between buying a Kindle and accompanying e-books (at a rate of 2 per month) vs... buying the same number of traditional paperbacks.

So, buying paperbacks:

I could get free shipping if I ordered two paperbacks at a time and didn't mind waiting five to nine business days for them to ship. If I chose standard shipping (three business days) instead, I'd pay about $4.88 for two paperbacks mailed together. I wouldn't be charged tax. (I live in San Francisco. How much you pay in shipping or taxes depends on where you live.) The $4.88 shipping for two books a month would equal $58.56 a year. That brings my two-paperback-a-month habit (books + shipping) to $447.12 per year.

Versus buying the Kindle (remember, the cited price of the reader does not include the recent price cut, nor does it include the price cut of $60 from three months ago):

My Kindle 2 order totaled $365.98, which includes $359 for the e-book reader and $6.98 for three-business-day shipping. The average price of the top 10 Amazon Kindle nonfiction bestsellers is $9.78. If I bought two e-books per month, I'd spend $19.56 per month or $234.72 a year (shipping isn't necessary). My grand total for the year: $600.70, which includes the Kindle 2 and 24 e-books.

That gives us $447 vs.. $600. A $153 difference. If you extrapolate this out to 2 years as the author of the article does (excluding the cost of the Kindle on the second year, of course), those figures go to $894 and $835. By buying the Kindle (at yesterday's prices) you wind up saving $59.

Now, let's look at that in light of the recent Kindle price reduction.

The first scenario obviously doesn't change, so our annual price of buying 2 paperbacks/month remains at $447.

The first year Kindle price plus e-books, however, goes down to $500 (Kindle: $259; s/h: $6.98; e-books: $234.72) from $600.

That makes for a 1 year difference of $53 in favor of buying traditional books (much better than the initial figure of $153). Over 2 years, however, we have $894 for traditional books and $734, a difference in favor of the Kindle of $160. Before the price reduction, that savings for 2 years of Kindle ownership was $59.

Given all of that, the question is this: Is now the time to buy a Kindle?

I think not.

While I think the long term cost savings begin to warrant the cost of the device, I'm willing to wait just a little bit longer to see what holiday price reductions Amazon institutes. Competition in the digital reader space is increasing, driving prices down. I'd like to see how much further they fall before I pull the trigger.

2009-10-09 Update: No sooner do I publish this post when word gets around Twitter that Barnes & Noble is planning a color e-book reader, to be released next year. A reason to put off buying a monochrome reader, or does this have further potential to drive prices of existing readers down? Guess we'll wait and see.

How much does the Kindle 2 really cost?

iSuppli, which makes a business out of tearing down electronics products to see what's inside and then publishing their cost findings, released a report stating that Amazon's Kindle 2 costs $185.49 in components. The Kindle 2 retails for $359. That's a difference of $173.51.

Engadget shows the component breakdown:

I don't mind Amazon making a profit, but I'm still not sold enough on the Kindle to fork over $359 for it. James Martin of PC World did a cost-justification analysis comparing the purchase of a Kindle 2 and associated e-books vs. going the traditional route and it didn't work out so well:

"...my number crunching reveals that even a loyal reader of paperbacks would only have saved $58.82 by the end of the second year of Kindle 2 ownership."

That's a whopping savings of $60 after two years. In his analysis, he assumes 2 paperbacks per month; that's a lot of reading. I know I couldn't maintain that pace for 2 years.

He goes on to say:

"Amazon is sure to introduce a third-generation Kindle during that period, which you may decide you can't live without. There goes your $58.82 savings, and then some." 

Therein lies the crux of technology, my friends. There's always something bigger and better right around the corner. However, I'd love to own a Kindle 2, and maybe that "next gen" version will help drive down the price of the current model.

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Authors: Kindle 2 text-to-speech undermines audio books

image The Author's Guild has issued an E-Book Rights Alert, informing authors of the possible revenue loss to stem from Amazon's Kindle 2 'text-to-speech' feature because of that technology's potential to undermine the audio book market.

The Guild says this about the Kindle 2's text-to-speech feature:

[Text-to-speech] presents a significant challenge to the publishing industry. Audiobooks surpassed $1 billion in sales in 2007; e-book sales are just a small fraction of that. While the audio quality of the Kindle 2, judging from Amazon's promotional materials, is best described as serviceable, it's far better than the text-to-speech audio of just a few years ago. We expect this software to improve rapidly.

In short, Kindle 2's text-to-speech feature is just that: any text stored on the Kindle 2 can be read back to you. The voice has been described as a "not-quite-natural electronic voice", but as the Author's Guild states, this feature should improve over time. Just the fact that we have such technology is proof enough that it will improve. Text-to-speech years ago was horrible. Yet now you can listen to say, my blog posts, through a service like Odiogo.com in a voice that is fairly pleasant if not a bit inconsistent in its pacing. It's 'serviceable', no doubt.

Personally, I take issue with the Guild's stance on this issue. First of all, audio books are expensive. Amazon has clearly invented a way to bring that cost down effectively to zero. That's good for consumers, right? Second, we live in a free market society where innovation is generally considered a good thing. This particular innovation, again, is a win for consumers because instead of having to buy print and audio versions of a book, you can now buy the Kindle format and that's it. Read or listen (or both), it's up to you. Just think of it: now you can read as usual, but you also have the option of listening for those times when reading is not possible. It's the ultimate in maximizing your time while still partaking in one of civilized society's greatest forms of entertainment.

I understand the other side of the argument. The "lost revenue" side, that is. But much like Paul Bunyan had to bow out to make way for the chainsaw, maybe it's time for the publishing industry to get out of the way and let technology and innovation pave the way to a brighter reading and listening future for all.

I'll leave you with Neil Gaiman's thoughts on the subject:

When you buy a book, you're also buying the right to read it aloud, have it read to you by anyone, read it to your children on long car trips, record yourself reading it and send that to your girlfriend etc. This is the same kind of thing, only without the ability to do the voices properly, and no-one's going to confuse it with an audiobook. And that any authors' societies or publishers who are thinking of spending money on fighting a fundamentally pointless legal case would be much better off taking that money and advertising and promoting what audio books are and what's good about them with it.

 Now, what do you think?

Amazon's Kindle 2 to Launch February 24

image There's plenty of news, buzz, skepticism, excitement, early product reviews, and photos surrounding the imminent launch on February 24 of Amazon's all new version of the popular e-book reader, the Kindle 2.

The feature list for this new Kindle is impressive:

  • Slim: Just over 1/3 of an inch, as thin as most magazines
  • Lightweight: At 10.2 ounces, lighter than a typical paperback
  • Wireless: 3G wireless lets you download books right from your Kindle, anytime, anywhere; no monthly fees, service plans, or hunting for Wi-Fi hotspots
  • Books in Under 60 Seconds: Get books delivered in less than 60 seconds; no PC required
  • Improved Display: Reads like real paper; now boasts 16 shades of gray for clear text and even crisper images
  • Longer Battery Life: 25% longer battery life; read for days without recharging
  • More Storage: Take your library with you; holds over 1,500 books
  • Faster Page Turns: 20% faster page turns
  • Read-to-Me: With the new Text-to-Speech feature, Kindle can read every book, blog, magazine, and newspaper out loud to you
  • Large Selection: Over 230,000 books plus U.S. and international newspapers, magazines, and blogs available
  • Low Book Prices: New York Times Best Sellers and New Releases $9.99, unless marked otherwise

imageFor me, the most attractive items from that list are the size, weight, battery life, and the sheer selection of Kindle-formatted books that Amazon now offers. The wireless feature is kind of cool, but I don't know that I'd use it all that often. In other words, once you've got a book or two downloaded you're pretty much set for days if not weeks, right? I spend enough time in the office and at home that having to hook up to a standard network isn't a big deal, though it's not clear to me at this point if that is even an option. Downloading over 3G might be the only way to bring content down.

As far as size, the image on the right says it all. The Kindle 2 is described as "pencil thin". That it is. That's one slim piece of machinery, though I do wonder about the Kindle 2's durability. I'm anxious to read early adopter reviews to see if this is an issue at all.

Other intriguing features include Whispersync which will allow you to start reading a book on the Kindle 2, then pick it up automatically on your iPhone or Blackberry, then jump back to the Kindle 2, all without losing your place. Read-to-Me is of some interest as well, though I wonder how tinny or jagged the speech will sound as it reads the book to you. If done right, with a smooth, pleasant voice, you may never have to actually read a book again

Update on Read-to-me: Legal action is already being contemplated because of this feature. Publisher's Weekly reports:

Some in the publishing community are raising objections to the new device's deployment of text-to-speech software that lets users have books read aloud by Kindle. Agents are raising questions and Authors Guild executive director Paul Aiken tells the WSJ "they don't have the right to read a book out loud. That's an audio right, which is derivative under copyright law." Amazon spokesman Drew Herdener says "these are not audiobooks. Text to speech is simply software that runs on devices and reads content." To that argument, an agent responds to us: "TTS is a tool. So is a knife. If I use it to cut vegetables, I'm using it for its intended and lawful purpose. If I use it to stab someone, I'm committing a crime. The fact that they are using a technology to create an audiobook rather than recording one has nothing to do with the issue. They are using a tool that has lawful purposes to violate copyright." Asked about next steps, Aiken says "we're studying it right now."

The Kindle was intended as the iPod or iPhone of the book world. Based on the sales figures Amazon has reported it would seem they're succeeding in this regard. According to Jeff Bezos, Amazon had been selling e-books “for years” and “it wasn’t working until 14 months ago” when the Kindle was launched.image

You can see the "Kindle effect" clearly demonstrated by the spike starting in 2007.

So, what to do? Wait-and-see or rush out and pre-order right now? What are other folks' thoughts on the new Kindle 2?

Further Reading