My iPhone is a Kindle, sort of

So Amazon launched the Kindle 2 on February 9th as expected, but didn’t say anything more about its plans to make Kindle books available on other devices. Then today it launched a Kindle app for the iPhone, and I’ve been playing with it. (I can do this because my iTunes account is tied to an American bank account, even though I live in Britain.) It’s pretty impressive: it lets you read Kindle books on your iPhone, and if you have a Kindle it remembers which page you got to on each device and can synchronise them accordingly. The selection is good and the books are cheaper than on Stanza. Amazon is pushing this as a way to use the iPhone as a fall-back reader when you don’t have your Kindle with you, and as a way to introduce people to e-books in the hope that they will then buy a Kindle.

Here’s the interesting thing: you can’t actually buy Kindle books using the iPhone app. You have to go to Amazon.com and buy a Kindle book there; it can then be called up on the iPhone. Obviously you can go to Amazon.com using the iPhone’s browser, but it would have been much neater if you could do it inside the app. So why can’t you? Perhaps Amazon will add it later. Perhaps Apple wouldn’t allow it (there is some rule about requiring approval for apps that sell you things). Or perhaps Amazon doesn’t want to make it too easy to buy Kindle books on iPhones, because it wants the iPhone to be a supplementary reading device, and doesn’t want to cannibalise sales of the Kindle hardware. If so, this is nuts: surely the potential revenue from selling Kindle books on the iPhone is far greater than the revenue from selling hardware?

Anyway, the ball is now firmly in Apple’s court. Being able to buy e-books (even Kindle books) via iTunes would be much neater. Also, the Kindle app doesn’t support periodicals, so there’s an obvious gap for Apple to fill there, if Amazon doesn’t do it first. It will be interesting to see how Apple responds.

One final thought on e-books, iTunes and so forth. I wrote a leader in The Economist about all this in which I referred to a possible “iTunes moment” for e-books and speculated about the potential for e-book readers to provide a viable new model for newspapers and magazines, by allowing them to charge for content and thus reduce (or eliminate) their dependence on advertising. There has been a lot of discussion about this, much of it prompted by Walter Isaacson’s piece in Time, which suggested that newspapers ought to adopt a micropayment model, charging readers small sums to read each article instead of giving everything away on the web:

Under a micropayment system, a newspaper might decide to charge a nickel for an article or a dime for that day’s full edition or $2 for a month’s worth of Web access. Some surfers would balk, but I suspect most would merrily click through if it were cheap and easy enough.

This proposal has been generally savaged, most thoroughly by Clay Shirky, who noted that “users don’t like being nickel-and-dimed… small payment systems don’t survive contact with online markets, because we express our hatred of small payments by switching to alternatives, whether supported by subscription or subsidy.” The case against micropayments has also been made by the excellent Andrew Odlyzo, who can do no wrong as far as I’m concerned.

Anyway, Isaacson seemed to equate the iTunes model with micropayments, even though most people would not regard $0.99 as a micropayment. When you buy an album or an app on iTunes, you make the “buy” decision and you click. Nobody wants to have to make that decision for every article they might want to read. When I wrote about an iTunes moment, I was referring specifically to the way in which the iTunes Store kick-started a market by creating an easy-to-use standard with critical mass. I think Apple could do the same for e-books and e-periodicals. But it wouldn’t involve micropayments; I think it would involve a subscription model, of the sort Amazon uses to sell periodicals on the Kindle. Just my $0.02, as it were.

7 comments
  1. David said:

    Felix’s Facebook post led me to your blog. I too downloaded the new iPhone Kindle app. I also own a Kindle and the ability to access the same content but also keep your reading position in sync between devices is huge.
    Note that on the actual Kindle device, periodicals are available but as you point out, they are missing from the iPhone app.
    Interestingly, Amazon’s other iPhone app (which lets you search for items and also take photos of things you run into in bricks and mortar retailers and buy online instead) does enable you to transact through it. It would n’t surprise me to see this functionality added in a revision of the Kindle app. I agree with you that where the money is made is on the content versus the device itself, so enabling transactions through the iPhone Kindle app can only help Amazon.
    I think that making the content available through iTunes would actually be a bad thing. First, if the content were the same price as on the Amazon Kindle Store, Amazon would presumably lose money on every transaction since Apple is unlikely to make the content available for no transaction cost. Second, since the content requires the Kindle app to work, it would be a tie to a third party app, which probably wouldn’t sit well with Apple. Of course, Apple could do a smart thing and bake the Kindle app into the iPhone firmware (similar to the YouTube app).

  2. tomstandage said:

    Good points all. I still don’t quite understand why you can buy books via the Stanza app, or the Amazon shopping app, but not through the Kindle app.

    As for iTunes, I’m sure Amazon’s margins would be lower if it sold through iTunes. There are several ways Apple could do things, though. It could define its own e-book standard, sell e-books on iTunes, and allow publishers to submit books in that format (ie, what it does with music). This would cut Amazon out altogether. It could also allow Amazon to sell Kindle books through iTunes, and bake the Kindle app into the iPhone, as you suggest; but I think this is unlikely. Apple likes to control the file formats on iTunes.

    But perhaps Apple might decide to treat Amazon as an ally with which it competes in some areas (eg music sales); that is, after all, how it treats Google.

  3. Georgia Cameron-Clarke said:

    I’ve often wondered why people don’t like micropayments. God knows, we make mega-payments all day long (parking, congestion, coffee) in a far more cumbersome way. I hope it is just a matter of timing and that, as you say, iTunes has paved the way.
    FWIW I love Stanza, but the books feel expensive. I would be happier paying £1 or £1.50.

  4. tomstandage said:

    I think the problem with micropayments is that if you ask people to make a “buy or don’t buy” decision for every click, they’ll make fewer clicks. You make the “buy” decision for a coffee when you come out of the Tube station, or whatever, and decide which way to walk. Then you’re committed. Conversely, if you charge people a flat rate for unlimited access, they may end up paying you more, because not having to worry about the cost of each extra click is very attractive, and people are bad at estimating what their consumption will be (they often overestimate).

    On pricing, I wonder what impact Kindle’s arrival will have on Stanza’s pricing!

  5. Mike said:

    I wouldn’t read too much into the lack of book purchasing in the Amazon iPhone app, Tom. The iPhone App store tends to encourage you to ship often and iterate, since initial setup is tricky, and refreshing your apps gets you back in the top 25 / featured lists. I think also the standard software development processes make it easy to carve out functionality and punt to v.next. eBay’s app, for example, used to not have messages or search refinement, for example, or the New York Times app used to crash a lot… wait, sorry, that’s a different example.
    Mike (also via Felix’s Facebook post)

  6. Tom,

    Liked your impressions of the kindle and am also puzzled by Amazon’s download strategy. My guess is they’ll fix it at some point.

    I think it’s too early to write off micropayments. Not that you’re wrong about people not wanting to pay 10 cents a click or what have you. Still (and not to be a survey of one), there are times I would’ve paid for something on a content site if it didn’t involve registering, or they weren’t asking $2.95 for a single article or some such thing. I guess those aren’t micropayments, but minipayments. In any case, it’s only been 15 years. The model for such things doesn’t seem set yet.

    Best,

    mike

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