Kindle Review – Kindle Fire Review, Kindle 4 Review

The iPhone App Store holds some valuable lessons for publishers, authors, and even Amazon and the Kindle Store.

There’s a very high chance that as the Kindle Store and ebooks evolve we face the very same issues that iPhone App developers face today.

Lesson #1: There’s a relentless race to the bottom

Take a look at what iPhone App developers have to say -

AppCubby: With the average price in the App Store now at $1.39 for games and $2.58 for all apps, the App Store is killing the value perception of mobile software shoppers.

He also adds: I’m finally willing to concede that for most apps, the price ceiling is now $5.

Craig Hockenberry - developers are lowering prices to the lowest possible level in order to get favorable placement in iTunes. This proliferation of 99¢ “ringtone apps” is affecting our product development.

When there are extremely low barriers to entry and loads of people are competing, they end up competing on price. 

This is why we’re seeing some Independent authors selling their books for $1 just to be able to create a brand. This directly results in -

1. Unrealistic expectations developing about ebook prices.
2. Pressure on every independent author to sell at $1.

This will, sooner or later, translate into pressure on small and big authors and publishers.

Note: The iPhone App Store has the added downward pressure inducer of Free Apps. Thankfully, the Kindle Store has a $1 price limit. This ensures ‘Free’ marketing doesn’t completely destroy the value of writing.

Lesson #2: Bestseller Lists and ‘Getting Featured’ become ridiculously important

There are currently over 65,000 iPhone Apps. There are over 100,000 registered iPhone App Developers.

There are only 3 ways for them to get attention -

1. Sell a lot and hit the Bestseller lists. Difficult, given there are 64,999 other apps. 
2. Get featured by Apple in the ‘What’s New’ or ‘Staff Picks’ sections.  
3. Get featured by blogs, newspapers, TV channels, etc.

This complaint from the creator of PCalc iPhone App should sound familiar to Kindle owners -

As it stands, the App Store is too crowded to find anything if you don’t know exactly what you are looking for by name.

iPhone App Developers are finding that their options are limited -

AppCubby:  the only methods of marketing I’ve found to be measurably cost effective are working with the press and getting featured by Apple, both of which are essentially free, but incredibly hard to guarantee.

The closest thing I’ve seen to a “business model” for marketing iPhone apps is to advertise like crazy until you get into the top 50 and once you’re there, the top 50 list will start generating it’s own buzz. Then, just throttle the advertising to keep it in the top 50.

The Kindle Store faces the same search and discovery problem. Amazon does a better job of diving into niches – however, it’s still rudimentary.

Also, putting free books into the main bestseller list is an issue.

Lesson #3: It’s not easy making a living off of Apps for Individual Developers

This, although a result of the first, is important enough to consider separately.

Safe from the Losing Fight pointed out in end 2008 -

I’m unconvinced that having one or two iPhone applications as a sole source of revenue is sustainable. Earning $4,000/year seems like the most likely scenario (at least after the first year).

We now have a lot more apps in the App Store and huge companies like Skype, ESPN, and Google entering (actually Google Voice was barred from the App Store).

People look at an app like SGN’s F.A.S.T. that made $1 million in 6 weeks and assume their app will make a million too. However, they miss out things like -

1. Social Gaming Network is a full-fledged company with $15 million in funding (that it got in May 2008).  
2. It has a million plus people that use its Facebook apps – people that it can advertise their iPhone apps to for free.
3. It has 24 employees.  
4. There’s a lot of history – SGN’s founder Shervin Peshavar had built up Freewebs.com to 24 million unique visitors a month BEFORE he ever started on Apps.

A lot of the successes in the iPhone App Store are really big companies like ESPN and companies founded by industry veterans like SGN.

There are very few individual app developers making a living, and even fewer getting rich.

Thoughts – Lessons ebooks and Kindle Store could learn

Unless the Kindle Store and eBook Stores are careful we’ll result in the same situation i.e. instead of a democratization we get randomization.

There are a few things obviously needed –  

1. Tighter price controls i.e. not let authors price themselves into oblivion.
2. Better Search and Discovery that lets readers find what is of interest to them -
   

   Perhaps create a Kindle Store per user i.e. something that focuses on the 3% of books that the individual user is actually interested in, and the additional 2% they might be interested in.

3. Create a mechanism that gives independent authors a fair chance and perhaps even lets them stay independent.  

Evolving the Kindle Store intelligently is an almost intractable problem, and it might not even be in Amazon’s favor to do it (because they could, like Apple, just profit from people working for their platform).

However, here’s to hoping Amazon and the Kindle Store find a solution that benefits readers and authors.

Filed under: evolution Tagged: | kindle store, kindle vs iphone