Kindle Book Subscription Model seems inevitable

We’ve now seen two moves in quick succession by Amazon that bring us ever closer to a Kindle Book subscription model.,

  1. It added the Kindle Owners Library to the Amazon Prime Program. That’s already 25% of the work towards creating a proper Kindle Book subscription model. The $79 you pay a year for Prime gets you 1 free book loan a month.
  2. It just allowed any Author/Publisher to offer books free for up to 5 days in every 3 month period. That’s hundreds of free books a day for Kindle owners to choose from. When you consider the jump in sales rank and awareness this creates – it’s hard not to think that more and more authors will start offering free books in return for the marketing opportunity and the sales rank jumps. Of course, Amazon gets 90 day exclusives as a bonus.

It’s far closer to a subscription model than you would think at first. The first hints of ‘more books than you pay for’, ‘read as much as you like’, and ‘huge range of books’ are already there. Everyone’s on the slippery slope now. Even Amazon can’t stop what’s coming – It is, however, very well placed to take advantage of it. The things that are missing will gradually and automatically be filled in.

  1. More participation from the Big 6 Publishers. This will increase as Amazon gets more and more of a stranglehold over ebooks. Right now Publishers probably are thanking the Heavens that B&N invested in Nook and Nook Tablet. However, sooner or later, they will have to make a tough decision and either forsake Amazon completely or embrace its view of ebooks as Gold Stars that lure customers into Amazon.com’s virtual aisles.
  2. Anytime loans instead of the limit of 1 book a month. This shouldn’t be too difficult – as Amazon gets more power, and as authors become more desperate, we’ll see a lot more of this. We’re talking about authors who are already fighting to get people to pay them nothing for their books. Amazon is just supplying the little psychological magic (the $500K that gets split amongst a mere 5 million indie authors). Authors feel it’s less hopeless than it really is.
  3. Enough money (or a large enough lottery prize) for authors so that they are OK with offering their books for free. As soon as Amazon can figure out just how much money free book offers generate, in terms of other products bought at Amazon, it’ll start increasing the $500K a month bounty. It’ll still work out to nothing for 99% of authors. However, the lottery mentality means that every author secretly hopes she can get 10% of that monthly bounty (plus sales from the periods when her books aren’t free). More and more authors will jump in – as the prize gets bigger and bigger, authors will find it easier and easier to ignore the millions of other indie authors jumping in.
  4. In the UK there have been a flurry of complaints over the last few years about how supermarkets and retail store chains use book bestsellers as loss leaders. Selling them for 4 pounds and 5 pounds and driving bookstores to their death. Grocery Stores in the US have been using bestsellers as loss leaders too. Amazon is doing exactly the same – except it’s replacing $4 with $1 and $0. It’s ebooks so Amazon can give them away – it just has to offer enough of a carrot to authors or create a good enough lottery. A Kindle Book subscription model would be the ultimate lure to draw readers into Amazon.com – especially if Amazon can make it a Kindle exclusive. Amazon will 100% push for lifetime exclusives – it’s already tried with Amanda Hocking and probably with other authors. The End Goal is obvious – Kindle books as the irresistible loss leaders that pull people in to Amazon.com.
  5. Enough books published by Amazon imprints to provide a significant part of the subscription value (even if it’s 10% of the books people hear about, it’s still significant).
  6. Enough distillation of indie authors and smaller publishers to make the subscription model more compelling. Do note that the quality does exist – as soon as the curation problem is solved (if it is, and it probably will be), Amazon gets all the good indie authors who are, strangely enough, willing to offer up their books for nothing. All for the promise of recognition and other things that fill hearts and not stomachs.

Amazon thinks it’s game over. Don’t know if it is but Amazon is certainly behaving as if it’s game over – there’s no other reason to show its hand so early. Everything leads to a Kindle Book Subscription Model that is not only very compelling for the amount of reading it offers readers, it’s also exclusive to Amazon.

This is the inflection point. The fact that Amazon has set up and kicked off a model where not only are authors falling over each other to offer their books free to Kindle owners, they are also giving Amazon 90 day exclusives. The fact that it’s already started a Subscription Model and turned it into a selling point for Kindle Fire and Amazon Prime. Don’t see any way the Big 6 can get out of this alive. B&N is in deep trouble too – It’s restricted by its need to make money selling books. This is the inflection point of inflection points. It will, in retrospect, make the other inflection points in eReaders and eBooks seem trivial. The Tragedy of the Commons = The Best Lossleaders Ever.

For Reading: Kindle > Kindle Fire > iPad

Just finished reading The Hunger Games on Kindle Fire.

Based on the limited experience of reading that one book on Kindle Fire, a few books on iPad, and lots of books on Kindles, here are my thoughts.

Note: I have read quite a few books on Nook Color (another 7″ reading tablet, which happens to be very similar to Kindle Fire).

Kindle is by far the best device for reading books

Why is Kindle better than Kindle Fire?

Kindle’s eInk screen is optimized for reading. The eInk really is better than LCDs. It does not tire your eyes (which Kindle Fire does, to a noticeable amount). It does not tire your hands (which Kindle Fire does, a bit).

If a person had both, and didn’t have to read in the dark, the person would almost always pick the Kindle for reading.

Things like size and weight are not things you should gloss over. If you like to read without resting the book on something, then Kindle is the best option because it is very compact and light. Kindle Fire is manageable but iPad isn’t. With iPad, you absolutely must rest it on something because it’s just too heavy for one-handed reading and it turns into a work-out if you do two-handed reading.

Kindle Fire provides a good reading experience, but nothing like the Kindle

If we strip away all our strong feelings of love and belonging, and look at just the quality of reading experience, then a few things stand out –

  1. Kindle Fire is good for reading.
  2. The LCD screen isn’t as good as eInk. It does tire the eyes.
  3. The IPS LCD screen isn’t very readable in sunlight. By ‘isn’t very’ we mean ‘basically isn’t’.
  4. The weight is a bit much – you’ll have to switch hands after half an hour or so. Or you’ll have to get something to rest it against.
  5. The size is very good. Not as great as Kindle but still good. This is a BIG advantage of 7″ Tablets over 10″ and even 8.9″ Tablets. 7″ is very close to a paperback and manageable.
  6. Kindle Fire is very good for night reading – after you dial down the brightness.
  7. Kindle Fire’s size and weight and wieldiness (ability to handle it easily) make it considerably better than iPad for reading. The mainstream press can throw all the ‘animated page turn’ nonsense it wants and claim iPad is better for reading than Kindle Fire and Nook Tablet – However, the size and weight of the 7″ Tablets are far more suited to reading.

My theory of there being LCD compatible people and LCD incompatible people seems weaker and weaker. I think it has more to do with people being in love with their device and not being willing to admit that eInk really is better for reading. OR there are just people who use a different definition of reading (one book a year) to claim LCD devices are as good for reading.

After now owning an iPhone, a Nook Color, and an iPad for over a year each, and reading quite a few books on each, it just seems to me that the feeling of ‘Tablets and Smartphones are so pretty and lovable’ is really the root cause of all the ‘LCD is as good as eInk’ claims.

You can see it in extreme effect in people who claim – LCD is fine for reading in sunlight. Just find the shade. Just dial down the brightness.

LCD compatible people = People who love their devices so much they morph LCD compatibility into themselves. A sort of placebo effect.

For anyone who claims that LCDs are just as readable as eInk:

Q1: Do you love your LCD device? Are you very fond of it?

Q2: What about the Kindle you played with for 5 minutes before dismissing it? Does it hold any more meaning for you than a hole in the wall?

That right there is why LCD seems as good to you as eInk. Everyone who owns and uses BOTH a Kindle and a Tablet (Kindle Fire, Nook Color, iPad) for a reasonable period of time (6 months) can attest to the fact that eInk really is better for reading.

Your eyes and your hands can attest to it too – ask them right after you’ve read a book on a LCD tablet. Ironically, the situation in which an LCD outshines a Kindle (reading at night) is the situation that most hurts your eyes and body (due to your sleep patterns being affected and due to the huge contrast between the LCD screen and the dark environment).

iPad isn’t really suited for reading

Three reasons:

  1. LCD isn’t as good as eInk. It’s not even close. This includes things like tiring the eyes and not being readable in sunlight.
  2. The size isn’t very convenient. A 10″ Tablet is quite a bit larger than a paperback. That makes it unwieldy and a horror if you’re reading a book (as opposed to 10 minute snippets of reading between other things).
  3. The weight is a real pain. You can always rest it against something and claim the weight isn’t an issue. But that introduces newer problems (reading in something other than your favorite reading positions, what it does to your neck, the reading distance becoming unoptimal). Bottom line: If you can’t hold your eBook Reader in your hands while reading, that’s a good hint it isn’t really an eBook Reader.

There are lots of redeeming qualities for the iPad. The first few are things related to reading:

  1. It can be read on at night. Note: So can the 7″ Tablets and they eliminate the weight and unwieldiness problems.
  2. It has Color. This is admittedly important for some categories of books.
  3. You can get books from any store. Note: Kindle Fire allows this by letting you sideload apps from other sources. Not as convenient, but doable.

There are also things unrelated to reading: It’s great for movies, it has a bigger screen, it has a touch screen, and so forth.

Qualities unrelated to reading are NOT a killer reason to buy an iPad for reading. This is something that people who don’t read much don’t seem to get. You aren’t going to buy an umbrella if you’re looking for a pair of pants just because an umbrella is rain-proof.

If you’re looking for a device for reading – There’s no competition. Kindle is far better than iPad, and it is clearly better than Kindle Fire.

Note: Kindle and Nook are pretty close. Nook Touch (with eInk) is going to be available on sale for $79 on Black Friday. You might want to take a look.

If you own an iPad, don’t despair – You can get a Kindle for $79, or you can think yourself into being LCD compatible. Do keep in mind that the cost on your eyes and neck and wrists might not be something you’ll be able to wish away. The cost on eyes part also holds for Kindle Fire and Nook Tablet.

If you’re choosing between Kindle and Kindle Fire, it becomes really interesting. The weight and unwieldiness problems are gone with 7″ Tablets like Kindle Fire and Nook Tablet. So it comes down to how much you value reading. If your main reason for buying a Kindle Fire is reading, then my very strong recommendation would be to buy a Kindle 3 instead (the one with the keyboard). If your main use of the device will be for reading, then it makes sense to get the device that is the very best for reading.

For Reading: Kindle >> Kindle Fire >> iPad. For Reading: eInk >>>> LCD.

Amazon vs Apple AKA Jeff Bezos vs No Direction AKA The Evolution Economy vs The Leisure Economy

Amazon vs Apple isn’t really worth discussing. Yet, the main stream press keep discussing it.

There’s an article today from one of the TechCrunch guys writing about how much profit Apple is going to make in the holiday quarter and how little profit Amazon will make. It’s a general theme that constantly amazes me – Apple is finally successful. Why still try to show you’re superior?

If your sense of worth doesn’t flow from inside yourself then at least having $60 billion cash in the bank should fill that hole in your soul.

It makes you wonder exactly why Apple and Apple people need to trumpet how amazing and revolutionary Apple products are.

Did electricity have to send out a Press Release touting why it’s better than candle light? Did the wheel hold a fancy presentation to tout how much better it is than square-shaped transportation attachments?

When it strikes you the answer becomes apparent. When what you are doing isn’t really permanent then you have to constantly pretend it is. To feel good about yourself.

Bill Gates left the PC Wars to try to find cures for Malaria and Cancer and solve the really big problems. Perhaps nothing comes of it. Perhaps something does. If he does manage to achieve even one of his big targets (cure malaria, cure cancer, create a culture of billionaires pledging half of their money to such causes) then he would have done something that is perhaps far more important than putting a computer on every desk (which he did do).

Jeff Bezos is doing a lot of things that potentially have huge long-term impacts i.e. Blue Origin (space), Kindle (the future of books), AWS (a move to a cloud infrastructure), the future of retail. He doesn’t need to pose in a half-lit room and show the world how zen-buddhist cool he is. Because if Blue Origin ends up being one of the winners in the Space Race or Amazon takes over retail or Kindle replaces paper – every single person for the next 5,000 years will know who he is.

He’s even building a clock that will work for 10,000 years. Perhaps that helps explain why he doesn’t care what the leeches and parasites of Wall Street think about his plan to invest in the future.

Google, despite the distinct possibility that it becomes the Matrix, is doing Search and Maps and Self-Driven Cars and lots of Translation work and a lot of information organization and gathering.

***

When you do stuff that has really big impact and are focused on the really long-term – you don’t need the validation of short-term success. Things like popularity and acceptance and being cool are pretty meaningless.

Note: We aren’t judging here. Every person is different and some people want to be Prom Queen and some want to write a book that is timeless. Everything is fine. The problem is when you try to have your cake and eat it too. The Prom Queen should stop insisting that her winning the Prom Queen title is timeless and as significant as Shakespeare writing Macbeth.

Let’s consider someone who isn’t making pretty gadgets and isn’t considered the Technological God of the current generation and is relatively unknown – Elon Musk.

This is what he wrote about what areas he chose to focus on (courtesy Wikipedia) –

His undergraduate degrees behind him, and drawing inspiration from innovators such as Thomas Edison and Nikola Tesla; Musk then considered three areas he wanted to get into that were “important problems”, as he said later, “One was the Internet, one was clean energy, and one was space.”.

These are the companies he’s part of or owns (or was part of): SpaceX (which won that multi-billion dollar contract from NASA to handle space launches), Tesla (the electric car frontrunner, in most people’s opinion), SolarCity (one of the largest solar panel installers), PayPal (which did something pretty impressive).

Not many people know of him because he isn’t really focusing on ‘making people happy for the short-term with shiny gadgets’. Conversely, he probably has little need to gain ‘the love of the common people’ and be considered ‘the greatest technology person alive’. If even one of his two main bets works out – then every single person for the next 10,000 years will know who he is.

Here’s the crux of the argument:

If Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin become 2 of the big winners in the Space Race. If Bill Gates cures some major disease and sets up the richest fund ever for the good of humankind. Will anyone remember who made the Walkman or made the prettiest Tablet?

That, in a nutshell, is why the consumerist culture engine is so focused on taking the Vatican of Consumerist Culture and portraying it as life-changing and revolutionary. It’s a futile attempt but impressive. There’s probably a maker of pure ivory tools from prehistoric times who wishes he had the same marketing engine – He’s convinced that if he did, then today his pure ivory nutcracker made from only the finest Mastodon teeth would be considered more important than the wheel.

***

All of this leads to a brief detour.

Amazon vs Apple is meaningless. Jeff Bezos is still here to build Amazon into something (and Charlie Rose really should ask him this the next time he goes on the show) that lasts longer than his 10,000 Year Clock.

Steve Jobs built something that now has no head. It’s literally a giant stack of money and 5 years of plans for fancy gadgets and then nothing. It’s a Validation Providing Engine without the one person who most understood the need for validation and how to provide it.

Jobs-less Apple will release an easier to use and prettier TV and will then claim that TV was nothing before this. That making remote controls easy to use was the real magic. That Baird and Farnsworth and everyone else were minor contributors. But no one at Apple now knows how to link Apple TV to people’s need for validation – not without letting people realize it’s just a pipeline of Validation sent out by and connected to the Vatican of Consumerism.

Without Steve Jobs there is only reality and reality does not treat Validation Engines very well.

Amazon vs Apple is such a concern for the main stream press for this precise reason. If Apple’s Press Acolytes really thought Amazon was not a danger they would be indifferent. Truth is that they are scared out of their wits because Jeff Bezos might beat Apple’s Validation Engines with his Value Engines.

It’s bad enough he doesn’t have Time Magazine spend 25 hours lining up the perfect photo to show how artistic and cool he is. What’s worse – he doesn’t care about profit or the short-term.

Enough of this pointless detour. Let’s get to the real story.

***

The Evolution Economy vs The Leisure Economy

There are two warring viewpoints trying to take over the world.

The Leisure Economy

Everything is fine. We are never going to have any problems. We have evolved enough and now we can just sit back and enjoy. The Human Race has reached its zenith and it’s either going to last forever OR it’s not our problem.

It’s the Leisure Economy. If it weren’t for those annoying greedy parasites on Wall Street – every person would have enough for a comfortable life and we could just worship Angry Birds champions and write about how the person who thought up virtual goods is more important than the person who invented the wheel.

It’s perfectly OK – We each have the option to choose any view-point we like. And we have the right to choose our heroes and Gods.

The Evolution Economy

Humans as a race need to keep evolving. All this worship of the present and thinking the American Idol winner is more important than your parents is getting out of hand. If teachers and policemen and doctors and librarians are considered worthless, and actors and musicians and people good at hitting a ball are worshipped, then it’s a warning sign.

People with this viewpoint look around and wonder –

What happens if we need another Planet? As in – really, really need another planet so we can survive as a species. Then they start thinking Space. Or, if they are elected officials focused only on the next election, and on pleasing their Wall Street overlords, they disband our Space programs and hope someone else will solve the problem.

What happens if we run out of Oil? Apart from minor inconveniences such as not being able to drive to MacDonalds we would have more serious issues like not being able to transport anything. Literally everything runs on Oil (including several governments 😉 ).

What happens with our water situation? A lot of people are dying (literally) because they can’t get any drinking water. If the absolutely imaginary global warming continues/happens/magically appears and the areas affected expand – what then? Would Consumerist Culture Jesus appear and turn wine into pure water?

It’s quite a long list. It’s also a list that we should pay at least a tiny bit of attention to. If not for ourselves, then for our kids. If not for our kids, then for whatever reason excites your fancy.

The Leisure Economy is very seductive

Who wants to believe in a world where things are hard. Reality is terrible. It’s like that person you really like who is crazy enough to not like you back. Love only hurts the heart – reality hurts every single part.

It’s much easier to embrace the fantasies and imaginary adventures of the Leisure Economy.

To believe that the biggest challenges your grandkids will face is choosing what color of iCar to buy and deciding whether to enter the Google matrix at 11 or wait until 21.

Perhaps people like Jeff Bezos and Bill Gates and Elon Musk are wrong. We truly have reached a Leisure Economy and nothing will go wrong and everyone will wake up and the World Peace fairy would have made everyone good and kind and benevolent. The Earth will never change its weather patterns. Asteroids will always stop at red lights. Sea Water will become drinkable. And that crazy man who was turning leaves into Oil will turn out to be right.

It is however, a very dangerous bet to make. We can look back all through history and the few times a Civilization reached riches like ours (Roman Empire, Ottoman Empire, etc.) – it didn’t turn out well. The Barbarians at the Gate didn’t have iPads or Angry Birds.

On a long enough timeline the survival rate for everyone drops to zero.

What accelerates things is when a species starts believing the illusion that there is no timeline. We are God’s chosen people and unlike every other empire and species before us we shall remain untouched.

Dinosaurs never had iPads. Otherwise they could have just used the iPads as shields when the Asteroids hit. All our human experience of playing Space Invaders will surely pay off.

That really is the belief amongst people who believe a bit too much in the Leisure economy – the voices of the American Idol singers and the bats of the Red Sox and Yankees and the iPods we throw out into Space will stop the Asteroid. Then they will fall back as a mix of pure oil and pure water and also cleanse any thoughts of war from the minds of the entire human race.

Our Species is safe. If that annoying Ice Age starts creeping up on us our rappers will just smile at it and their gold teeth will scare it back.

***

Should we really be thinking beyond the next 50 years?

It’s a good question. Probably depends on whether you have kids. Whether you think the human race deserves to live on.

What about beyond today?

An even better question. Wish I knew the answer to that.

***

Reasons a Leisure Economy is Unsustainable

Even if we do magically reach a perfectly balanced and perfectly secure Leisure Economy where every single person is happy and has enough money to buy a Maybach with platinum rims and 3D TVs, there are still a few problems.

  1. A Black Swan event. Nassim Nicholas Taleb would explain this a 1,000 times better. In a nutshell – we might have the perfect world and annoying Earth might decide to go into an Ice Age and freeze us all to death. Or an Asteroid might hit. Or a virus might evolve faster than our defences and our medicines. Or a thousand different things. Low probability but if a black swan hits the Leisure Economy – The End, My Friend.
  2. Wall Street Banker Syndrome. We’ve spent so much time as a species fighting for resources and fighting with each other that it’ll be impossible for people to live happily in a Leisure Economy. You’ll want more and your neighbours will want even more and the chain continues until people think 100 million kids dying due to poverty is fine because they need to make money on commodities trading.
  3. War. This is not about inequality but a difference in opinions. Look at the world around us. The only thing saving us is that one country has huge military superiority. If we are unlucky enough to reach a state during our lifetimes where the Middle East and/or China become as powerful as the US, then all dreams of the Leisure Economy’s permanence will be permanently shattered. To be absolutely blunt – all those people working 70 hours a week making iPods and iPhones and Kindles and Xboxes might not treat us very well if they become the most powerful country in the world.

There’s a long list but it mostly stems from the fact that humans are used to competing with each other, for fighting for things, and to the Feudal model (Kings and Lords ruling over the peasants). There are also a lot of things going on that we ignore but shouldn’t (the race against viruses and parasites, the Earth itself, the energy situation).

Does that leave only the Evolution Economy?

That would be brutal. To find out that the only way for the human race to survive is to keep doing what it’s been doing (working and improving and evolving and doing things other than killing the time).

That people will have to keep inventing wheels and steam engines and electricity and airplanes and cars. That doctors and scientists will have to keep making medicines and discoveries. That we can’t all just sit and design ever prettier toys.

That’s a real bummer. Instead of having 7 billion people spending all their time figuring out how to amuse each other, we might be forced to evolve as a race and do boring things like explore space and the oceans and discover new technologies and sciences.

It almost suggests that we will bifurcate. This is where it starts getting really interesting.

The Evolution Economy AND The Leisure Economy

You could argue this is already happening.

25% of people choose the Evolution Economy. They build flying cars and fly to Mars and discover how to purify sea water and find new energy sources.

74% of people prefer the illusion that everything is perfect and they just need to think about the next ballgame and the next device upgrade and the next mortgage payment.

1% of people realize that there is a lot more money, in the short-term, in providing the above 74% people with the dream-illusion of the Leisure economy. That if you make a device shiny enough and market it well enough – the 74% will start thinking it’s as revolutionary as Electricity and the Steam Engine. That if you conjure up fantasies that are compelling and easy then the 74% will leave behind the harsh reality of the real world and embrace the fantasies.

That really is where I think the world will end up.

25% will choose reality and live in the real world and be part of the Evolution Economy.

1% will cater to the 74% that don’t like Reality – they will create a perfect matrix where you might be in vat of fluid the size of a coffin but you think you are flying to Switzerland for a ski in the afternoon and then walking on a farm in Wisconsin in the evening and finishing up by having dinner in Paris. Every day is just perfect and, to your senses, perfectly real.

It’s free choice – And it’s understandable.

It’s also completely natural that for people who choose the Leisure Economy the real heroes and Gods are the 1% who create it.

People in the Evolution Economy might find it strange that in the Leisure Economy the heroes are the ones who can allay the Satanic evil of boredom, even if just for a few minutes. But that really is the crux of the Leisure economy.

Everything is taken care of. No risks. No worries. Just Leisure. The highest goal anyone can achieve is fending off the terribleness of boredom and attaining the nirvana of being entertained. The 1% will figure out a way. To take all the drives and instincts built up over millions of years of fighting off saber toothed tigers and building cities and raising families. A way to channel them into fighting off Green Pigs and building virtual farms and raising imaginary children who never become ungrateful teenagers.

It’s inevitable and we just have to choose whether we are in the 25% who choose reality, the 74% who embrace total fantasy, or the 1% who keep the fantasy alive. Perception is reality – it’s debatable whether it’s the 25% choosing the Evolution Economy who are delusional or the 74%. Perhaps it’s the 1% who are truly delusional – they are the only ones who neither get to enjoy fantasy nor reality.