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Why Amazon's Kindle will fail.

Posted on November 18, 2007 by Jeremy Toeman

First, let me say I very much like Amazon, and about 90% or more of my online shopping goes through them, in virtually every category. Used books, new games, my soon-to-be-replaced 32″ Olevia LCD, baby apparel, rechargable Xbox controllers, and even Kangaroo Ribs – all from Amazon (sorry, the kangaroo meat vendor seems to have disappeared, but its hopefully temporary. tastes like chicken). But no matter how much I may like them doesn’t change my belief that their new electronic book reader device will fail, and fail terribly.

Electronic readers are one of those categories that sound really great in a boardroom. They demo great, and technologists tend to love them (yup, that includes my friends). I’m sure they even test well in focus groups, and will rapidly admit that there is *some* market for them. But that market isn’t the masses, it’s a small niche. And unfortunately, small niches are hard to sustain if you are a gadget maker.

The way I like to look at a new gadget is generally inspired by the language Pip Coburn uses in The Change Function. Is the market today “in crisis” when it comes to books? No. Next, is there a perceived pain in adopting electronic book readers? Absolutely. Now that’s not enough to completely rule out the category, but it certainly is a quick and dirty way to see why it’s not quite a slam dunk either.

In my eyes this is one of those technologies that is still searching for a problem. At $399 + $9.99 per book, it’s certainly not a cost-competitive solution to purchasing books, unless you are comparing solely against new, hardcover prints. Further, it’s not exactly a challenge to find and buy books, whether online or offline, new or used. In fact, it’s pretty hard to argue that an electronic reader will vastly improve the book discovery, purchase, and consumption experience (unlike how much an MP3 player was able to do that exact thing). The only really viable argument against physical books is they are bigger and bulkier, but that really only applies to hardcover books.

I can go on at length about all the different use-cases for why an electronic reader can’t win, but then I think this would become one of those all-too-wordy posts I tend to use. So, I’ll jump into quick bulleted list format for the rest:

  • Unlike newspapers and magazines, the content of books isn’t about timeliness, so digital versions do not offer an advantage. While those industries are in a change-or-die crisis, books aren’t.
  • Book consumption is unlike any other form of media, and cannot be compared to music, videos, news articles, blog posts, etc.
  • The “barriers” to buying a book today involve knowing where to buy a book. Anyone savvy enough to buy Kindle knows where to buy books, and it is highly unlikely they are in massive dissatisfaction with that process. Compare this to the perceived barriers about an electronic reader.
  • Most positive comments on e-readers have tons of “ifs” in them. IF it has good battery life. IF the screen looks good. IF buying books is easy. IF its very “booklike”. This isn’t a sound argument for a product, it’s instead presenting a very narrow window and how to look through it in order to see the light.
  • For the most part, consumers do not buy technology products because of technology. They buy products for the services they provide, and the experiences that go along with them. Kindle would have to literally knock it out of the park to pass this criteria, not to mention everything I’ve mentioned above. The reality is the mass market of consumes tends to resent most new technology, since it tends to be overly hyped and well-marketed, yet do little more than frustrate and fail to deliver on expectations (much like the Sony Vaio VGN-SZ460N, an utter failure of a laptop).

Lastly, it’s most prudent to think about the real-world use case for reading books. How many people are really in a position where they need a mobile library of 200 books with them to choose from? Few. In my years of experience designing products for consumers, they routinely react to new device categories extremely poorly. I obviously don’t know how much money Bezos & Co is willing to throw at the Kindle, so I can’t possibly predict how long until it disappears from the catalog, but I’m definitely willing to predict it doesn’t go the distance.

UPDATE: I just read Seth Godin’s thoughts on Kindle. One of the marketing blogs I definitely enjoy, and his post on the topic is pretty good. But he mentions something that again shows me how off the mark even “industry experts” can be. He writes “The challenge that my hero Jeff Bezos has is that if he’s really really lucky, he’ll sell a million of these things in a year.” I think he’s missing about 5+ “really”s here. If he’s lucky he’ll sell 50,000 in a year, really lucky is 100,000, and really really lucky is about 200K. Moving 7 figures worth of hardware per year is VERY VERY hard! VERY hard. And that’s in an established category, let alone a speculative one.

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Posted in Convergence, Gadgets | 26 Comments
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26 thoughts on “Why Amazon's Kindle will fail.”

  1. C. Alexander Brown, Rockcliffe Park, Canada. says:
    November 18, 2007 at 9:30 pm

    Interesting device, but in my view an intermediate device leading to other quite useful things. I have already conceived of two, without thinking even seriously about the matter as a classic design opportunity/problem. This is such a juicy fruit that I am tempted to end my long sabbatical and get really active again.
    It will be interesting to see where this goes, and what iterations Mr. Bezos will come up with.
    As for the prediction that “It will fail..,” this is foolhardy, to say the least.

    Reply
  2. Pingback: Amazon Reader Hate « Scobleizer — Tech geek blogger

  3. Pingback: Equinox of Insanity - Amazon’s Kindle, Unfortunately Unscented

  4. Tom says:
    November 19, 2007 at 1:19 am

    I can see many of your points except #2:

    “Book consumption is unlike any other form of media, and cannot be compared to music, videos, news articles, blog posts, etc.”

    I understand what you’re saying, but my first thought about the Kindle is that I have stacks of books in the house and bookcases with no more room. Wouldn’t it be great to have a “book iPod” that I could carry around that would eventually hold a few hundred books? That thought appeals to me greatly.

    The Kindle may not be the “book iPod” I’m looking for, but if not it’s at least a link in the chain leading to it.

    Reply
  5. John Gibson says:
    November 19, 2007 at 5:18 am

    IMO the key is things like newpapers and magazines. If they market it towards and can get buy-in to content that is tailor made for a digital device then it becomes real easy to expand the usage of the device for other content like books. Unfortunately it doesn’t sound like that is the plan for Amazon.

    Reply
  6. tivoboy says:
    November 19, 2007 at 6:43 am

    I think one, it will sell better than the sony bookreader. Which, I thought was a great device, with NO marketing, no relationships and it was too much of a geek product, even though they show more AAPR members in their ads than anything short of diapers or cialis ads.

    Two, the ability to get the book via OTA download is great, not sure how this is going to eat margins on book or services. I bet they will sell more than 100K year one. COULD be 200K.

    Reply
  7. Ben Drawbaugh says:
    November 19, 2007 at 9:09 am

    Where this thing would really excel is in College. Imagine having all those huge overpriced books on there for each class and being able to annotate and lookup things while studying. Email yourself study guides, instructor related material etc.

    Personally I don’t have time to read fiction, and at $1/mo per blog it’d cost me way to much.

    Reply
  8. Swaroop says:
    November 20, 2007 at 1:48 am

    I am sure it will sell well..
    Brining something off the topic.

    [quote]
    even Kangaroo Ribs – all from Amazon (sorry, the kangaroo meat vendor seems to have disappeared, but its hopefully temporary. tastes like chicken)
    [/quote]

    Did u ever feel that u were eating chicken all the while sold as kangaroo meat ?

    Reply
  9. Xavier says:
    November 20, 2007 at 2:34 pm

    Jeremey-totally agree this thing with fail. I’ve put together a list of 10 reasons why here- http://www.notebooks.com/2007/11/19/10-reasons-the-amazon-kindle-will-fail/

    Reply
  10. Pingback: Amazon Kindle | Sam Levenback

  11. tivoboy says:
    November 21, 2007 at 12:47 pm

    Sold out!

    http://blog.blankbaby.com/blankbaby/2007/11/kindle-sold-out.html

    Reply
  12. Mark Evans says:
    November 23, 2007 at 11:39 am

    Jeremy,
    The enduring question is why there’s so much interest in building a better mousetrap? So far, consumers have shown little interest in eReaders for a variety of reasons. Still, Sony, Franklin and, now, Amazon have insisted on pushing the concept into the market. Like you, I agree the Kindle won’t fare any better than other eBooks.

    One thing I do like is the idea of wireless connectivity given it could add some interesting functionality such as video and music to enhance the book reading experience. Even then, I don’t think market is going to be that big.

    Reply
  13. Jeremy Toeman says:
    November 25, 2007 at 11:48 pm

    Mark – good idea, but I already have that device… it’s my laptop. 🙂

    tivoboy – so they haven’t disclosed units MADE, which makes this data point fairly irrelevant. Furthermore, reading “consumer” reviews points to mostly existing beta testers as “reviewers” (at least they are disclosing the fact!), and the product is categorized in “Kindle Store” where’s it’s ranked first. No rank in ANY hardware category. Fail.

    Reply
  14. Pingback: Out of the Box » Blog Archive » How Kindle can succeed in failure

  15. Mark Delman says:
    December 2, 2007 at 8:35 am

    I have to agree with Jeremy on this and add two points:

    1) I do alot of my pleasure reading on airplanes. For me, the Kindle is absolutely LESS convenient than a traditional book. One need to make sure the Kindle is charged. One may need to carry a separate charging unit or adapter. And then there is airport security where this will look just like a lap top etc.

    2) High tech products can bring huge advantages but they generally more complex. To use the Kindle, one will need to download content, transfer it to the Kindle, contact customer support if download or transfer fails, etc. How about a service contract? Updated software? Changes in format standards? Is the juice worth the squeeze with the Kindle? I doubt it.

    No I think that the real beneficiary here is the book industry that would love to lower their cost of delivering content (books need to be printed, books need to be inventoried, books need to be shipped, unsold books need to be discounted, etc.) Publisher and book sellers like Amazon are the folks that benefit from electronic book adoption, not consumers. If the book industry wants to make electronic books viable, they are going to need to compensate consumers for the inherent DISADVANTAGES of electronic books. That probably means a cheap, or free viewing device, and much lower costs for electronic book content.

    Reply
  16. Jim Treacher says:
    December 4, 2007 at 6:10 pm

    I sure hope it starts failing quicker so I can get mine before Christmas.

    Reply
  17. JAM says:
    December 15, 2007 at 9:44 pm

    I’m one of the individuals in the so called “small niche”. What you need to understand is that the Amazon Kindle is not meant to be everything to everyone. When a company makes a decision to release a product such as the Kindle is because it fills a void in the market (how ever small that is right now). I also disagree about the Kindle not surviving. The Kindle has enough differentiating features that will capture (and has) the attention of customers within the target niche.

    Reply
  18. Steve T. Smith says:
    January 3, 2008 at 2:09 pm

    Anybody here that dislikes the device want to sale theirs to me? I’ve been waiting for over a month. I am offering 550$.

    Reply
  19. DBAGuy says:
    January 5, 2008 at 11:04 am

    Bad facts in your argument, Mr. Toeman.

    — you really need to look at the Kindle bookstore…you’ll see that there are many, many, many books for less than $9.99. If you include being able to load (at no cost) all the Gutenberg project books, your argument about price (which is a main argument of your position) just doesn’t hold water.

    — As far as TPPA, the pain of adoption isn’t as high as you say, especially when I can, without adding an SD card, carry over 100 books with me, including humor, reference, etc. For people who like to read, especially those who have several books (I usually have 4 or 5) running at the same time, I don’t find myself at the airport, or in the doctor’s office, or anywhere, without a book or magazine to read. The pain of the ‘crisis’ for anyone that likes to read and has a busy life, is high…the pain of adoption isn’t. Granted, that is a matter of opinion, but you should really get your hands on one, or even better, see a non-gadget person with one, before you issue your ‘it will fail’ proclamation. IMHO, your prediction is similar to Time magazine, in 1996, saying that Apple had no future.

    Reply
  20. Pingback: Sam Levenback » Amazon Kindle

  21. Tiffany says:
    January 31, 2009 at 3:19 pm

    I love this idea. I wish that I could afford to buy one. Especially if college books were available. I would save some money. Unfortunately, at $360.00 it’s not an affordable device. With that said, I also can’t figure out how it would pay for itself over time. I could buy a lot of books for $360 and even though these e-books are cheaper than than their hardcover counterparts, I could find these books used for $3 and $4 at a used bookstore in a few months. I do love this idea; especially the idea of taking 100’s of books with me everywhere I go, but at this point it just doesn’t seem affordable.

    Reply
  22. Mark Johnson says:
    July 31, 2009 at 8:33 am

    “The only really viable argument against physical books is they are bigger and bulkier, but that really only applies to hardcover books.”

    – Production, marketing, distribution and disposal of paper books, newspapers and junk mail are environmentally destructive.
    – You can’t carry a paper library around with you.
    – Paper books aren’t searchable; traditional indices are limited and vary in quality.
    – Paper books can’t be delivered to practically anywhere in under ten minutes.
    – Write in a paper book, and the mark is there to stay.
    – Photocopiers are more expensive and harder to use than a “Copy” key.
    – Paper books can’t cross-index each other just because they’re on the same shelf. (I’m sure Kindle doesn’t do this, but it could.)

    I’m sure there are a lot more viable reasons.

    All that said, though, I’m not rushing out to buy a Kindle. It wouldn’t solve many problems I really care about, and introduces other problems (listed above). And there are a lot of other things I’d rather spend $400 on.

    But I LOVE the idea of college textbooks on the thing. And API reference manuals.

    Maybe Kindle is good for some kinds of reading and publication, and not for others?

    Reply
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About

Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

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