Perhaps the most effective move would be removing DRM and making their own eReaders. This would allow them to create their own pipeline and also to weaken the pipelines of the existing Platforms. Without DRM there’s no lock-in any more.

The Digital Reader discusses the success of the Tolino eReader in Germany. It’s an eReader made by a group of book retailers, which can access books from any of the stores. Apparently, it’s selling well.

Why don’t Publishers make an eReader of their own?

There’s literally nothing stopping them. Amazon doesn’t own the screen technology, eInk does. The various parts are easy to make. Foxconn, Pegatron, and a few other manufacturers would gladly make eReaders for Publishers.

It would take very little effort and comparatively little money. Publishers could even take preorders and figure out demand.

Why do Publishers need DRM?

People who pirate books aren’t stopping because of DRM. It’s trivial to remove DRM. The only thing DRM is doing, is allowing Amazon to create lock-in and gain more and more power. If Publishers remove DRM then Amazon’s lock-in disappears.

Amazon’s lock-in is the Big thing allowing Amazon to dominate the ebook market. If readers were able to buy books from any store and read on their Kindle, they would. It would allow hungry new startups to emerge that would offer Publishers and Readers better terms. It would allow Publishers to Divide and Conquer – shift the balance of power away from the Platforms and back to the Content Providers.

It’s all about the Books right now. Publishers need to wake up and realize that if they don’t do something it’ll shift to being all about the Platforms.

Publishers need to leverage what they have – 50% of Content and 75% of the Books people want to read

Remove DRM, release your own eReader, and make it easier and more convenient for readers to read books on the Publishers’ eReader or any eReader.

There are only two points of power – the store, the device.

There are only two sources for books – The Big 5 Publishers, Smaller Publishers and Indie Authors.

The longer Publishers wait, the less power and leverage they have. If they move quickly, they can build up their own ecosystem (jointly owned by the Big 5 Publishers), their own eReader base, their own customers. Then they aren’t at the mercy of B&N and Amazon and Kobo and Apple.

They have their own pipeline and their own Platform.

Publishers must leverage what they have BEFORE they no longer have it. Because Publishers’ share of ‘Books People Want to Read’ and ‘Authors People Want to Read’ is gradually declining. Once it falls below 49%, they are toast.

Stores are weakening Publishers by building up Smaller Publishers and Indie Authors

Publishers need to look at what Google did to newspapers. It distributed traffic between blogs, smaller newspapers, and larger newspapers. Soon, people stopped going as much to the larger newspapers. Revenues fell and the newspapers started dying. While Google prospered by running ads against all the searches.

The same thing is happening in books. In 2007 you would have 80% of the Top 100 covered by Big 6 Publisher books. Perhaps a bit less.

Now, in 2013, we are seeing Indie Authors take up 25%, Amazon Publishing take up 10%, smaller Publishers take up 15%. That’s means the Big 5 have just 50% of the Top 100. This process is going to continue until the Big 5 Publishers have been weakened so much that they are at the mercy of the Platforms (Amazon, Apple, B&N, Kobo).

The Big 5 Publishers still have 75% of the ‘Books People Want to Read’. But they only have 50% of the Top 100 Spots. What’s wrong with this picture?

The Big 5 Publishers have to be delusional if they -

1. Don’t see what the stores are doing i.e. weakening the Big 5 Publishers.
2. Think that they have some great ‘Quality’ or ‘Branding’ advantage. People can only buy your books if they can see and find your books.

The store gets Brand X Ketchup and Brand Y Ketchup. People flock to the store. The Store introduces its own Ketchup. It puts its own Ketchup on the easy-to-get middle shelf, and the other ones on the hard-to-reach top shelf. After a few years, it puts them in the last aisle where only 25% of shoppers shop. Then soon it has 55% market share and it dictates terms to Brand X and Brand Y.

That’s EXACTLY what Amazon and the stores are doing. Publishers seem to be in some sort of Reality Distortion Field where they think they are still the Gatekeepers and that no one else can write and publish good books.

Good $1 Books will beat Great $13 Books – Every Single Time

Publishers seem to be completely oblivious to the fact that Good is the Enemy of Great. Good $1 and $3 books will, sooner or later, destroy Great $13 Books.

13 times more expensive. There are not very many markets where the high-end is 13 times more expensive than the low-end. There’s definitely no market where the high-end is 13 times more expensive and also sells more.

Perhaps even more dangerous is the possibility of the Rise of Great $1 and $3 Books.

It’s already happening to an extent. What happens when there are lots of Great $1 and $3 Books available?

Publishers seem completely oblivious to this possibility. Perhaps they are assuming that everyone else has their legacy costs.

Why removing DRM is a Smart Move

In any Pipeline, every step-owner in the pipeline tries to outwit every other step-owner. It’s a constant battle to grab 90% of the profits while making the other participants work for peanuts.

In Books we had a good arrangement. Publishers had the books and Distributors had the distribution channels and Stores had the shelves. It worked well – everyone profited.

Now, Amazon and B&N have too much power. They will do Divide and Conquer. Pit Publishers against Smaller Publishers and pit Published Authors against Indie Authors. They will build their in-house teams and publish themselves.

Their goal is to make Publishers redundant. Then to replace Publishers as the gatekeepers. Then to replace all other books by their books. This is crazy out of control ambition. Delusional too. Just as Publishers are under the delusion that only they can publish great and good books, the Platforms are under the delusion that they can train readers to buy only their published books.

Everyone wants to play God. Until they get struck by lightning.

What can Publishers do? Divide and Conquer back.

Equalize the Platforms. If it’s currently 65% Amazon, 15% B&N, 10% Apple, 10% everyone else, then Publishers need to get it to 40% Amazon, 25% Apple, 15% B&N, 20% everyone else.

What’s the best way to do this? Remove DRM. Standardize Prices (which has failed already). Lock out Amazon (a very bold move but worth a shot). Build their own stores. Sell their own eReaders.

Think of the pipeline. Why are Publishers at the mercy of Amazon and B&N and Apple? Because they don’t own the eReader or the Reading App or the eBook store.

When we had Brick & Mortar stores it made sense to not own stores. What’s the excuse now? Same for eReaders – what’s the excuse?

Readers buy eReaders for Books. The Big 5 Publishers have 75% of the books that people want to read. Why do they need stores or eReaders they don’t control?

This is the equivalent of Russia and Saudi Arabia saying – Hey Greece. We have all this oil. Would you build pipelines and ships and carry them to North America for us? We’ll let you control the entire trade if you save us the hassle of building our own ships and pipelines.

What is it all about? The Books.

Who has the Books people want to read? The Big 5 Publishers.

Then why are they letting themselves be turned into pawns in the eReader and eBook Wars? Perhaps they genuinely are that naïve. Perhaps they vastly overestimate the amount of effort required to build an ebook store and reading apps and eReaders. Perhaps they just don’t get it.

All of Books and Publishing is up for grabs. Publishers can either replace stores and distributors and ereader companies OR they can get replaced.

Publishers just have to do two things -

1. Build a pipeline to readers and control it 100%.
2. Price books at prices that let readers buy and read the books they want to read, without forcing readers into the arms of indie authors.

It’s absolutely unbelievable that Publishers are doing absolutely everything they can to hand over all control to the Platforms. To push readers into the arms of indie authors and smaller publishers.

Perhaps Amazon and B&N planted spies into the Big 5′s Strategy Departments. Perhaps the Big 5 are under the misconception that ‘eBooks will just go away’ and/or ‘eBooks will never go above 25%’. Whatever the reason, it’s painful to watch the Big 5 Publishers be played for fools by the Platforms.

Think about it – The Platforms are using Books published by the Big 5 Publishers to attract readers to their ecosystems and get locked into their pipelines. They are then, gradually, training those users to buy books from other sources. Eventually, they would have used the Big 5 Publishers’ product (books) to replace Big 5 Publishers. It’s absolutely crazy that the Big 5 Publishers still don’t get it. The Platforms are going about the process of REPLACING you. What part of that is not clear?

It’s baffling to me why Publishers are so miserly and mean-spirited when it comes to readers who just want to pay them money to read their books. It’s even more baffling that Publishers are so large-hearted with Platforms that want to weaken them and replace them. Shouldn’t it be the other way around?

This is true in pretty much every field and every business.

Indie Authors currently have lots of competitive advantages and several important competitive disadvantages. Their success, and their ability to ward off all the ‘indie authors are bad for writing’ attacks and the subterfuge of the stores, depends on building up sustainable competitive advantages and rendering Publishers’ competitive advantages unsustainable.

Let’s explore how Indie Authors can create sustainable competitive advantages that will allow them to become the superstar authors of the future.

Cialdini’s Influence & Seeing Reality As It Is

A lot of this post will be based around Cialdini’s Influence: The Psychology of Persuasion. If you’re an indie author, you need to read this book. It’s that simple.

A lot of this post will also factor in another of Jack Welch’s 6 Rules – See Reality As It Is, Not as it Was, or as You Want it To be.

This (Seeing Reality As It Is, in the Present) is very, very critical. You have to understand that we’re in a different world. There are a few realities to think about carefully -

1. This isn’t the Publisher controlled world any more. Readers will buy your books if it’s good. The relentless drop in prices in ebook stores is proof of this. Only Indie Authors and ex-Published Authors dropped to $1 and $3 initially. Now everyone is being forced to. Readers bought those books without the stamp of Publishers. They still are.
2. Absolutely anyone can top the charts now. This sounds like heresy. However, there are now so many different websites and apps and channels to promote books that you just need enough marketing. It doesn’t matter what the quality of the books is. Price the book at $1, get it listed in enough places, and you’ll hit #1. It’s not just a possibility, it’s guaranteed. If you don’t believe me, then see what Amazon Publishing is doing with its titles. All the titles that people weren’t even buying are now in the Top 100 (with a few exceptions). Note: Amazon Publishing uses all the sites and channels I’m talking about. Strange as it seems, Amazon pays other people to advertise their own books in their own store. This shows how powerful the outside channels have become. The first really hard to believe reality you have to admit, and internalize, is that with sufficient marketing (which is attainable by ANYONE with some money) you can get your book to #1 in the Store. It doesn’t matter how good the book is. Quality and Product Market Fit only determines how long the book will stay in the Top 100.
3. Absolutely anyone is topping the charts now (notice the subtle difference). If you don’t believe this, take a look at what happens with the Kindle Daily Deal. Most of those books are not special. Yet they almost always hit the Top 10 or Top 20. Take a look at all the $1 and $3 books in the Top 100. Read the reviews. These aren’t marvellously written books. There aren’t once-in-a-lifetime books. A few are undoubtedly very, very good. However, most are just normal to good books.
4. Amazon’s job isn’t to help you. In fact, even Amazon isn’t clear what its job is. It’s torn between suppressing lower priced books to make money, promoting its own titles, and keeping book prices low to bring people into its ecosystem. This means that you absolutely MUST assume that Amazon will use books as the loss leader. So the only way you can make a living from books is planning around that. How do you make money if Amazon turns books into loss leaders? In a way, this is already happening. The average selling price of a Top 100 book is $6.287. That includes $13 and $10 books from Publishers - Which means that the average selling price for Indie titles is between $1 and $4. How will you survive in that world?
5. Publishers are stuck. They need to make enough money to keep their massive dinosaur engines running. At the same time prices for ebooks are dropping and the market share of ebooks is rising. What does that mean? It means they have to carve out more for themselves and less for authors. There is no workaround around that reality – If Indie Authors succeed, Publishers and Published Authors die. They aren’t writing long meandering essays on ‘Quality of Books is Falling’ because they care about the quality of books, or because it is (it is, actually). What they really mean is – All these annoying Indie Authors are selling good books for $1 when they should be selling for $10 like we are. It’s unfair.

These are REALITIES. You’ll have to test them (see the facts and then see what the facts show you, not what you want to believe) and then accept them (if the facts show you that these are indeed Realities).

You’ll have to replace all the negative beliefs and misconceptions with these Realities. Get rid of all the brainwashing -

1. You need Publishers to approve you. This might be true if you are looking for validation. If you actually want to sell books and be read and make money, then you only need to publish your books. Self-publishing achieves that.
2. You need to sell paper books. You don’t. Again, if this is part of your need for validation or your need to impress your friends and family, then it’s fine. However, it doesn’t matter whether or not your books are stocked in stores. If you succeed with ebooks, Publishers will flock to you and this will happen automatically.
3. You can’t make money from $1 books. Yes, you can. You just need to sell more. The current ebook stores are optimized for a model of $1 to $5 books that sell at high volumes. You don’t really have any other choice if you’re an indie author. Soon, no one will have any other choice – might as well switch and adapt now.
4. You need Amazon to succeed. You don’t. There are indie authors who are in the Top 100 in B&N and making enough to not care two hoots about Amazon. If you sell well, then it hurts Amazon to not have you, so they will come for you.
5. You can’t make money being an indie author. There are lots of indie authors making hundreds of thousands of dollars a year. A few are making hundreds of thousands of dollars a month. If you want to make more than that – well, first you should figure out how many authors actually make millions a month. It’s not a long list.
6. You can’t gain recognition as an indie author. If you get a movie deal or a Top 10 rank – that’s recognition. It doesn’t matter whether you’re ‘published’ or not.

This part is the toughest. This is where a lot of indie authors fail. The more you can drum out all the brainwashing and look at things with a clean slate, the higher the chance you can pick the right approach for you (and that might be Publishers). The key is – Publishers are one option out of many. Same for signing up with Amazon.

Now, on to the real stuff.

Indie Authors’ Competitive Advantages

1. Value for Money. Indie Authors can price their books at $1 and $3. This does two things – Kills Publisher Books at $7 and $9 and $13, Reduces the friction in a user buying and trying your book. At $1 to $5, you’ll have 10 to 3 times more readers willing to take a chance on your book. If you don’t have the first book in a series (or one of you books) free, or at $1, then you’re losing your biggest competitive advantage.
2. Being able to sell at $1 to $3. Not only is this making you more attractive, it is killing Publishers. Literally killing them. If 20 indie authors at $1 and $2 are selling in the Top 100, that means 20 books at $10 and $13 aren’t. Publishers are losing millions every single day. The faster the transition happens, the less time Publishers have to adapt. Indie Authors can not only gain a big competitive advantage by pricing their books between $1 and $3, they can also literally kill off Publishers.
3. No Illusion that Marketing will magically happen. A lot of published authors are under the misconception that they can just write. Apart from the established superstars, everyone has to market themselves. As an Indie Author you are free of any misconceptions that the Marketing Fairy will magically make everyone aware your book exists.
4. A Deeper Connection with Readers. Who do you think readers relate to better - Big large soulless corporations or new authors making a name for themselves? As an indie author, you’re the People’s Champion. Your readers will fight for you. Give them a chance. You have to do your part and give of yourself – be available, talk to your readers, get feedback, be a human being and not a name on a cover. Get yourself out there.
5. Speed to Market. Read this post on Indie Authors being much faster to market. You can react quicker. You can improve your books quicker. You can send out sequels quicker. You can react to and cater to Hot New Markets quicker.
6. Creative Control. There are multiple perspectives on what might work and what might not. The truth is that you don’t really know. No one does. If a Hot New Market exists or is created, you can cater to it. However, there’s no way you can guarantee your book creates a new market. If you just want to write something in your heart, with self-publishing you have total creative control. In my opinion, this leads to better work, provided indie authors embrace quality enhancers like editing and proofreading.
7. Constant Improvement of the Book itself. As an Indie Author you can take the typos and errors and keep adding to them. You can add free stories. You can add sequels. You can add downloads like wallpapers and stories and illustrations. A Publisher will move very slowly and a Publisher will only do this when a book is a success. You, on the other hand, can keep improving the value proposition and the quality of the book. If you don’t do this, you’re throwing away a big competitive differentiator.
8. Betting 100% on eBooks & Optimizing for eBooks. Publishers have to sabotage ebooks to ensure their paper book sales don’t die out. So, you get strange things like delayed releases and crazy prices. You also get a total neglect of ebook marketing, ebook polish and quality, and other factors like social marketing. You are free. You can focus on all the things that are needed. Think of it as Entity A running a hotel and on the side running a Bed & Breakfast. However, it doesn’t really want to run the Bed & Breakfast and that shows through in lots of ways. You, on the other hand, are in LOVE with your Bed & Breakfast and take joy in making your Bed & Breakfast excellent in every way.
9. Incorporating Customer Feedback & Strengthening Customer Relationships. This is different from 4. A Deeper Connection to Readers. There, you were showing your human side and using Likability and Familiarity to create a bond. Here, you are showing you genuinely care about their reading experience and strengthening it. It’s akin to deepening a friendship by taking a road trip together.

Note: We’ll use a lot of principles of influence throughout. We don’t mean it in a sleazy ‘magical and revolutionary’ sort of way. We really mean it. Now you’re one to one with your readers so only integrity and genuinely caring will work. If you don’t really care for readers then work with Publishers so that you can hide that disadvantage.

We have to use influence because our competitors (Publishers, Platforms) are, and because they have way too many unfair advantages.

Indie Authors’ Competitive Disadvantages

Eliminating some of these is important, especially the first.

1. Lack of Quality Control, Lack of Curation. Would it be crazy to suggest that the Kindle Owners’ Lending Library and 5-days-free offers were attempts to dilute the march of the best indie authors? Perhaps. Perhaps truth is stranger than fiction. This (lack of quality control, lack of curation) is the single biggest competitive disadvantage for indie authors. There’s no curation and that suggests that all indie author titles are garbage.
2. Too Much Supply. This is a competitive disadvantage in the sense that it makes it hard for indie authors to make money. However, the workaround is to use Free and $1 for Marketing and then sell the rest of your books at higher prices.
3. No Awareness amongst Readers. This is the second biggest disadvantage. How do you let readers know you exist? There are various choices – Free as Marketing, Cheap as Marketing, buy advertising, build your own channels. Unfortunately, all of these require hard work and they require authors to venture into uncomfortable territory – marketing, sales, pre-sales.
4. No Marketing Channels that Authors own themselves. This has to be fixed. If this isn’t fixed then there’s no point to what you are doing. You want a strong, PERMANENT channel to your readers. Which you own COMPLETELY – 100%. Not a Facebook or Twitter account. None of that nonsense. Your OWN blog (with a custom domain you own 100%) and your own email newsletter.
5. No Money. This is a tough one. How do you market? polish? write? … if you don’t have the money to buy services and time. I don’t have an answer.
6. Lack of Brand and Branding. I think indie authors should just skip this and focus on building their marketing channels and building real relationships with their readers and with their 1,000 true fans.
7. Lack of Market Intelligence. This is a really hard one. The only way to gain this is to sell books. You can try to buy it, but it’s expensive and doesn’t work as well. It helps to create Author Master Minds. However, how do you find 5 to 10 other indie authors who are focused and willing to put aside all their brainwashing?
8. Lack of Belief. Nothing works except you being ready to stop being a serf.
9. Lack of Guile. This is really tough. Guile requires a few things that aren’t easy to acquire – street smarts, experience, a variable moral compass. This isn’t necessary but it helps.
10. No Customer Relationships or Intent to Build Them. This is key. You can do well without customer relationships. However, these (customer relationships) are literally the foundation on which you build a sustainable career. If you aren’t willing to do this perhaps you should consider another line of work or sign up with a Publisher.

These are very big disadvantages. There’s no denying that. The good thing is that the advantages are bigger, and that most of these disadvantages can be neutralized or circumvented.

Creating Sustainable Competitive Advantages

There’s one key thing to understand -

1. A competitive advantage will let you win. A single competitive advantage could be enough to win the battle. An example is pricing – Pricing your book at $1 is powerful enough that it, alone, can allow indie authors to destroy Publishers in book sales.
2. To keep winning, you need sustainable competitive advantages. With a sustainable competitive advantage, you can win the war. Example: A relationship you build with your readers. Publishers and Authors build brands but most of them don’t really put effort into building relationships. Authors are happy to let Publishers handle all communication. Publishers are happy to let booksellers handle all interaction. Any indie author who actively engages with her/his readers will create a sustainable competitive advantage. If all other things are equal, we choose the product from the person/company we like and are familiar with.

Cialdini’s points on Liking and Familiarity are key. There’s the brand recognition aspect and there’s the personal human aspect. The Human aspect wins every single time.

What Sustainable Competitive Advantages can Indie Authors build?

1. $1 to $3 books. If Indie Authors stick with prices that most Publishers can’t survive on, and which most other indie authors won’t go with, for strange reasons like ‘believing my unproven work is worth $10′, they can create one sustainable competitive advantage.
2. Their own channels to readers. Email lists. Blogs. Social Network connections. While every published author depends on Publishers. While most indie authors do nothing or depend on advertising. You can build your own channels that you control yourself. If you’ve sold 250,000 books and release a new one – Guess which readers are the most likely to buy your new book. Well, you better create channels to them and for them. Even releasing an app which has one book free and then updates readers about your other books isn’t extreme. Why? Because when you release new books, you can send a message to the App and to your readers. You can reach all of them quickly and for free.
3. A Human Connection and Relationship. If a reader likes your book and then gets to interact with you – That greatly increases the chances that reader will buy one or more of your other books. You now have the opportunity to do virtual book signings and tours and meet lots and lots of your readers. It would be laziness and stupidity not to. The 1,000 true fans are the most important – If you can’t meet the rest, at least build connections with these 1,000 true fans.
4. Speed & Optimized Processes. Build up processes and tools and procedures so that you can do things faster and better than anyone else. If you can whittle down things so that a book takes you 6 months to release, and most Publishers and Authors take 2 years, then you can release 4 books in the time they release 1. They simply can’t compete.
5. A Large Portfolio. The single biggest sustainable advantage you have is a large portfolio of books. Why? Each book feeds each other. You can create a Book Network. The minute you hit 5-6 books (and not books in a single series) you’ll see serious network effects. If a reader likes your book, and you have only 1 book, then you’re finished. If, on the other hand, you have 21 books, then you might see 1 or 2 or even 20 more purchases from that reader.
6. Marketing Skills and Channels. This is similar to 2. All the channels you build while doing marketing are channels to readers. They are also channels to market your new books. This is why it’s important to build channels you control completely or are run by honest people. Facebook changed the rules so that now you can reach only a fraction of your followers, unless you pay for a ‘sponsored post’. Lesson: Build up your blog and email lists. Build your own little Pottermore or your own free apps.
7. Book Quality. You are nimble and focused on delivering the absolute best reading experience. That means you can take your book from 80/100 to 95/100 in quality and polish. Most Publishers simply can’t afford to get beyond 90/100. Most indie authors never get beyond 75/100. Get all/most your books to 95/100 in polish – You’ll have an advantage that no one else can match.
8. Optimizing for eBooks and Constantly Improving. If you start running in ebooks – learn strategies, polish, learn marketing, learn how ebooks work. Well, you’ll gain a strong advantage. Now, if you keep running and keep improving, everyone else can never catch up. Plus you’ll need comparatively less time and effort to keep improving, while the ones trailing you have to put in 3-4 times more work and effort.

There are other sustainable competitive advantages indie authors can build up. The sustainable part is most important – It has to be something you control and which no one else can take away. It has to be something that can’t be duplicated easily. There will also be sustainable competitive advantages that are UNIQUE to who YOU are. Figure those out.

The key thing to remember is that very, very few people have competitive advantages in ebooks and even fewer have sustainable ones. If you start now and focus, you can get way ahead of the field. It might seem ludicrous to suggest that you could build stronger marketing channels than even Amazon and B&N and Publishers. However, this is exactly what some smart authors and companies are doing – and a few of them will succeed (some have already succeeded).

The very things that were strengths for the Publishers and Platforms are turning into liabilities. You get to start afresh without having to guard any existing assets. It’s a huge advantage. Perhaps the biggest if leveraged right.

Destroying the sustainability of Competitive Advantages Publishers and Published Authors have

This is a touchy subject. The serfs (indie authors and us readers) aren’t supposed to question the God-given right of Publishers and Published Authors. Perhaps the Platforms, once they have more power, will feel they have special status too.

However, we aren’t in medieval Europe. It’s time to fight fire with fire.

What are Publishers striking at – The Quality Perception of Indie Books. Strike back. Publishers spend 90% of their effort on paper books. They then make low-quality ebook versions and sell them for outrageous prices.

Tell readers the truth – Your ebook versions get 100% of your time and effort. They aren’t treated like third-class citizens. They aren’t delayed. They aren’t overpriced. They aren’t sacrificed at the altar of paper book sales.

What are Platforms doing – giving subtle marketing and awareness advantages to their own titles and to high-priced books. They don’t even have the courage to be open about their attempts. The Platforms use small meaningless influence tactics that Cialdini would probably laugh at. Even Sheep (literal sheep, with wool and stuff) wouldn’t fall for that weak stuff. Note: That’s why it isn’t working. That’s why low priced books are still taking over.

Beat them on price and quality. There are already 21 books at $1 in the Top 100. All you have to do is deliver quality. The $1 price does the rest.

$1 and $0 are so Powerful they should be Illegal

$1 is magical – It’s marketing. It reduces friction. It increases sales. It gets readers willing to buy all your books, instead of just a few.

Notice how indie authors who gambled on $1 and $3 saw lots and lots of their books hit the top of the charts.

John Locke and Amanda Hocking had, at times, 3 of the Top 10 titles in the Kindle Store. Including #1. Why would that happen? Because the books were ALL cheap. Very little friction. That’s the power of $1.

$1 can destroy every single handicap and algorithm tweak the Platforms throw at it.

Free? Free is even more powerful.

Guess what Publishers and Platforms can’t afford – $0 and $1. Even Amazon got scared of $0 and ran away from free kindle book promotions. It’s hiding the Top 100 Free Books list now.

As an Indie Author, you aren’t scared. You can use $0 as powerful marketing. Then you can use $1 to get readers more invested. Then $3 to make a decent amount of money.

All of the Competitive Advantages Publishers and Platforms have are Unsustainable

That’s just the truth. Every single advantage they have is based on a world that has already gone. A world where there were gates and there were all-powerful gatekeepers.

There is no Gate, Neo.

Now Publishers and Platforms are using weak freshman year psychology and illusions and fancy words to pretend they still have power.

Just strip away the illusions.

There’s not a single competitive advantage Publishers have that is sustainable.

The only two sustainable advantages Platforms have are ‘Curation’ and ‘Convenience’. All it takes is one intelligent algorithm – whether crowd-sourced or silicon-sourced. That’s all. Those two advantages will be gone. Note: The stores aren’t very good at curation. They aren’t even really trying.

If you can’t wait for algorithms or crowds, then just build your own channels and speak to readers directly. They would like that.

The bottom line is – We’re in a completely different world. All the competitive advantages Publishers and Platforms have are unsustainable. All the real sustainable competitive advantages are ones that Indie Authors can build better than Publishers or Platforms – because they have no baggage and no existing paper book markets to protect. Indie Authors have nothing to lose and everything to gain. They have no old mindsets they have been trained in, unless they are exceptionally attached to past patterns (which makes no sense – you weren’t even getting published, why believe in that ancient world). The entire world of books and publishing is changing and the wolves have been let loose. I don’t see any way that Publishers and Platforms can fight them all off. Now it’s just a question of which wave of wolves tears out the throats of Publishers. How many waves after that before the Platforms are reduced to enablers instead of gatekeepers.

For some strange reason, lots of people are reading that post these last few days. Guess it’s time to do a post for 2013 on Choosing a Kindle. It borrows from that post, and also from this post from 2011 - Which Kindle? Kindle Buying Guide.

What is the Best Kindle for Me?

Well, first let’s look at the options.

Amazon sells the following eInk Kindles -

1. Kindle WiFi with Ads for $69. In the budget eReader market, this really is the best choice. You get a device focused on reading, at a very low price. You get access to the Kindle Store, which has the best range of ebooks. It also has the lowest ebook prices. As a bonus, the Kindle Store has the most free books from new and upcoming indie authors. The Ads only show on the screensaver, so they don’t impact your reading experience. The eInk Pearl screen isn’t as white as the Kindle Paperwhite’s, and there’s no in-built light, but the reading experience is still very good. You get Amazon’s infrastructure and customer service. There are sometimes cheaper deals – However, Kindle WiFi with Ads for $69 is easily the best budget eReader when you consider the overall package.
2. Kindle Paperwhite with Ads for $119. Kindle Paperwhite was the best eReader since its launch, until recently. Now Kobo Aura HD has arrived and it’s hard to say which is better. Kobo Aura HD is $169 which is considerably more expensive. However, you get a higher resolution HD eInk screen, which should lead to a markedly better reading experience. You also get what should be better lighting for the screen (unconfirmed until actual use). Kindle Paperwhite still boasts the better store (Kindle Store is better than Kobo Store), the better infrastructure and services package, and considerably better customer service. My recommendation here would be to wait a few months and see what Kindle Paperwhite 2 is like. If you can’t wait and can afford $169, then Kobo Aura HD is a safe bet. If you can’t afford $169, then Kindle Paperwhite is your best option.
3. Kindle Paperwhite with 3G and Ads for $169. If you want 3G access on your eReader, Kindle Paperwhite with 3G is the only choice. 3G access is helpful if one or more of the following are true for you – you travel a lot, you read while commuting, you live in a region without easy WiFi access, you don’t want to deal with having to look for WiFi hotspots. You get free 3G access to the Kindle Store and 60-second downloads. You also get all the other benefits of owning a Kindle Paperwhite.
4. Kindle DX 2 for $299. I really can’t recommend this. This is the only large screen eReader available, so you might be tempted to buy it. However, the technology is 2 years old and the product line had been discontinued. Amazon is perhaps going to release a new Kindle DX, in which case you’ll regret buying something that’s 2 years old. If Amazon doesn’t release something new, then this will be the only option, but it’s an exceedingly poor one. There are a few things you miss out on – Kindle Paperwhite screen (previous generation), eInk Pearl screen (2 generations ago), HD eInk screen (latest generation), in-built lighting. Paying $299 for a device from 2 years ago makes little sense – it’s the equivalent of buying a brand new car manufactured in 1980. Just get a Tablet instead or a Kindle Paperwhite.

The Kindle WiFi, the Kindle Paperwhite, and the Kindle Paperwhite 3G are all good choices. It depends on what your needs are, and what your budget is. In later sections, we’ll discuss further on which is the Best Kindle eReader for you.

Amazon sells the following Kindle Fire Tablets -

1. Kindle Fire Tablet at $159. This is a slightly updated version of the original Kindle Fire. I would very strongly recommend NOT getting this. This is very, very outdated now. If you can’t afford the $199 Kindle Fire 2, then get a Nook HD for $129 (currently on sale), or wait to see if Nexus 7 goes on sale for $149 once the Nexus 7 2 arrives. Here’s an example of why it’s outdated – Kindle Fire 2 has 1024 by 600 pixel resolution at 169 ppi, and is $159. Nook HD for $129 (currently on sale) has 1440 by 900 pixels screen resolution at 220+ ppi. Just that screen difference alone will make you cry if you ever see them side by side. Plus Nook HD is on sale for $129.
2. Kindle Fire HD at $199. This is a good, solid tablet with a great screen, the best speakers of any tablet, and all the Amazon ecosystem and infrastructure benefits. If you are set on buying a Kindle Fire Tablet then it comes down to this (7″ screen, $199 price) or the Kindle Fire HD 8.9″ (larger screen, slightly more expensive at $269). This is better if you want a more compact, easy to carry device. The Kindle Fire HD 8.9″ is better if you want a larger screen. Do consider the Nook HD and Nook HD+ at $129 and $149 respectively. They now seem to be on permanent sale.
3. Kindle Fire HD 8.9″ at $269. This is the larger screen Kindle Fire HD. This is very similar (almost identical) to the Kindle Fire HD, apart from having a larger screen and weighing more and being slightly unwieldy. At this price you also need to start considering the iPad Mini which offers a much richer App Store for $60 more. It also is much lighter while still having a screen larger than the 7″ Tablets. Another option worth checking out is the Nook HD+ at $149 (much cheaper since B&N is clearing out stock).
4. Kindle Fire HD 8.9″ LTE at $399. I really wouldn’t recommend this. Paying $130 more for LTE makes zero sense. It’s just a $25 to $35 chip – so you’re gifting Amazon $100 for nothing. Also, at $399 we’re competing with $499 iPads and Samsung’s higher end tablets and $329 iPad Minis. Kindle Fire HD doesn’t win any of those comparisons – unless you are very attached to Amazon’s ecosystem. Even then, it’s irrational to pay $399 for the Kindle Fire HD 8.9″ LTE.

Out of the 4 Kindle Fire Tablets, the best choices are the Kindle Fire HD and the Kindle Fire HD 8.9″. You should also consider fire sales like the one currently going on with the Nook HD+ (just $149) and the Nook HD (just $129). The Kindle Fire HD and Kindle Fire HD 8.9″ are good, solid choices. Kindle Fire HD is the better choice of the two, unless you want a larger 8.9″ screen.

Let’s get into more detail below.

Should I get a Kindle eReader or a Kindle Fire Tablet?

This is a good question. It depends on what your needs are.

Kindle eReaders with eInk screens are good if -

1. You read a lot. This is the main criterion.
2. You are not looking for a device that can do more than read. This is pretty important too. An eReader isn’t good for anything else. It’s not a tablet you can read on. It’s a device you can ONLY read on.
3. You want a device optimized for and built for reading.
4. You already have a tablet and want a reading focused eReader to complement it.
5. You read quite a bit in sunlight – at the beach, by the pool, in the park, etc. Note: No matter what device manufacturers claim, LCD screens aren’t readable in direct sunlight. You need an eReader if you often read in sunlight.
6. Your eyes get tired after reading for a long time on LCD screens. Note: There are LCD-compatible people who complain loudly at the mere suggestion that LCDs can hurt the eyes. There are LCD-incompatibles who prefer eInk over LCDs. There are also studies that show that reading on LCD screens before sleeping time causes sleep problems. Your individual case will differ. See if reading on LCD screens works for you or not. If not, then you’ll love the eInk screen.
7. You want the lightest possible device because your hands get tired from holding Tablets for long. If you read in stretches of longer than 15-30 minutes then you really need to get a 7″ Tablet or a 6″ eInk Reader. Those are the only two devices that you can hold for long stretches. Of them, the 6″ eReaders are half the weight – So, if your hands are weak and you read for long stretches, then you probably need an eReader.
8. You want something for reading which is far cheaper than a Tablet. Note: If you can’t afford a Tablet consider the fire sale on the Nook HD ($129 now). You can also wait for the release of the new Nexus 7 2. Nexus 7 might drop to $149 after Nexus 7 2 arrives.

The two keys are -

1. You should get a Kindle eReader if you are looking for a device optimized for reading and which can be used only for reading.
2. You should get a Kindle eReader if you want to read more and/or love to read. If you want a device suited for people who read a lot.

If you read more than a book a month, then spending $69 on a Kindle WiFi or $119 on a Kindle Paperwhite is a good decision.

Kindle Fire Tablets are good for you if -

1. You want a device that can do more than just read. In particular, you want a Tablet that you can do lots of things on – read books, watch movies, play games, check the Internet, check your email, listen to music.
2. You want a device on which you can also check your email and surf the Internet. While these things are technically somewhat possible on Kindle Paperwhite, they are very inconvenient and inelegant. In effect, you can’t really do them on eReaders.
3. You don’t read more than a book a month and/or You are fine reading entire books on LCD screens. If you are LCD-compatible, you’ll probably miss the color and shine and glimmer of LCD screens.
4. You are an Apple or Google person. If you believe strongly in Apple products or in Google products, then the design decisions and overall user experience of the Kindle eReaders will bother you to your very core. For Apple – There’s a stark lack of aesthetics and animated page turns. For Google – there’s no openness, only a walled rainforest.
5. You feel it’s not worth it to buy a separate device focused for reading. You also might not want to carry around both a Tablet and an eReader.
6. You don’t usually read in the sunlight. Note: As mentioned earlier, LCD screens don’t work in sunlight. So don’t believe the marketing nonsense about anti-glare layers and such.
7. You do one or more of these things often – watch movies, surf the Internet, check email, listen to music. You want a Tablet that allows you to do these easily and conveniently. Important: Kindle eReaders are NOT Tablets. They are devices dedicated to reading books and they don’t really do anything else.
8. You can’t afford an iPad or iPad Mini OR You prefer Amazon or Amazon’s ecosystem. If money is no object then you should get an iPad – no matter what. If you absolutely dislike Apple then get a Surface Pro or a high-end Samsung Tablet. Kindle Fire Tablets are not high-end or luxury tablets and if you can afford a high-end tablet it will almost certainly provide a markedly better experience.
9. You want a Tablet that ties in with Amazon’s offerings like Amazon Instant Video and Kindle Owners’ Lending Library and Kindle FreeTime for Kids. Kindle Fire HD is perfect for that.
10. You travel a lot and/or have a long commute and want a Tablet to pass the time and/or make some use of the time. The downside with a Kindle Paperwhite is that you can only read. If you want a device that also lets you play a quick game or check the news then you need a Tablet.

The three keys are -

1. You want a Tablet i.e. a device that can do lots of things.
2. You want a Tablet from Amazon.
3. You don’t read a lot and/or you are fine reading for long stretches on LCD screens.

If a Tablet is what you’re looking for, your next questions is – Is Kindle Fire HD the best tablet for me? What is the best Kindle Fire Tablet for me?

The following sections will help you answer those questions.

Which is the Best Kindle Reader for Me?

That’s a tough question. The three best Kindle eReader choices each have their own unique advantages -

1. Kindle WiFi – This is the cheapest. The eInk Pearl screen is still very good. This is the most compact. This is also really good as an add-on device dedicated to reading if you already have a Tablet.
2. Kindle Paperwhite - This is the best option if you don’t need or want 3G. The screen is great. The device works well. It’s pretty well-priced at $119. Note: Please also consider the Kobo Aura HD.
3. Kindle Paperwhite with 3G – This is the only option if you want an eReader that also has 3G store access and 3G book downloads. It’s pricy at $179 but worth it as the 3G is very, very convenient.

Get Kindle WiFi if one or more of the following are true – money is tight, you already have a tablet, you read just one book a month, you aren’t really much of a reader, you are buying it for your kids, you want the lightest and most compact eReader, you’ll use it only on occasional trips and vacations.

Get Kindle Paperwhite if one or more of the following are true – you want the best reading screen out of all eInk Kindles (also consider Kobo Aura HD if this is the case), you want the newest Kindle (you could wait for a few months for Kindle Paperwhite 2 if you want the absolute newest model), you read a lot, you need an eReader for your daily commute, you travel often for work, money is no object and you want the best screen (consider the Kindle Paperwhite 3G and the Kobo Aura HD too), you are OK with having only WiFi, you read a book a week or more, you read often at night and need the built-in reading light the Kindle Paperwhite has.

Get Kindle Paperwhite 3G if one or more of the following are true – you will read books often while travelling or commuting and don’t want to bother with finding WiFi (Note: WiFi is only needed to download books and to shop for books, not for reading books that are already downloaded), money is no object and you think 3G will help.

Kindle Paperwhite is perhaps the best fit for most people. Do consider waiting a few months to see what Kindle Paperwhite 2 will be like.

Which is the Best Kindle Fire for Me?

If you’ve decided on a Kindle Fire Tablet, chances are that the Kindle Fire HD or the Kindle Fire HD 8.9″ is the best choice for you. The two best choices have their own unique advantages -

1. Kindle Fire HD – This is the 7″ Kindle Fire HD. This is a good choice if you want a compact, light Tablet with a very high quality screen and great speakers and decent usability. If you can afford the iPad Mini, get that instead – it is easier to use and has a lot more apps. Kindle Fire HD at $199 is perhaps one of the best choices after iPad Mini (also consider Nook HD at $129). This is the best choice if you want a lighter, more compact 7″ tablet, or if your budget is only $200.
2. Kindle Fire HD 8.9″ – This is the 8.9″ Kindle Fire. This is $269 and a good choice if you want a larger screen. Perhaps you want to increase font size in books. Perhaps you want a larger screen for magazines and Internet surfing. Perhaps you want the larger screen for HD movies to have more room. The downside of having a larger screen is that the device is slightly heavier, it is larger, and it is a bit awkward to hold for long periods. Also consider the Nook HD+ at $159.

Get Kindle Fire HD if – you want a 7″ tablet, you have a limited budget (consider the on-sale $129 Nook HD if that’s the case), you want a lighter tablet, you have arthritis in your hands or have weak hands, you have smaller hands and want an easier to grip tablet, you want something you can throw into your purse or handbag easily (the larger model won’t fit smaller purses), you have good eyesight and don’t need a 8.9″ screen for large size font in books and websites, you want a more compact tablet.

Get Kindle Fire HD 8.9″ if – you want a 8.9″ tablet, you have weak eyesight and/or you like reading in larger font sizes and want to be able to see more of the large font size text on pages in books and websites, you don’t mind a slightly heavier and a larger tablet, you won’t be travelling with it and it doesn’t have to be small OR you don’t mind it being less compact, money is no object and you don’t mind the $70 higher price, you prefer it over iPad Mini (I think iPad Mini is a better choice than Kindle Fire HD 8.9″), you want a device better suited for magazines and newspapers, you don’t like the much cheaper but equally good Nook HD+ at $149.

Unless you have a need for a large screen device, I would recommend the Kindle Fire HD or the cheaper $129 Nook HD.

Is there a better eReader than the Kindle eReader?

For the moment, you have the Kobo Aura HD as a serious contender -

1. Kobo Aura HD offers a better resolution screen than the Kindle Paperwhite and, at 6.8″, the screen is a bit larger than the Kindle Paperwhite’s 6″ screen.
2. Kindle Paperwhite offers a better store and better services and infrastructure.
3. Check out our Kindle Paperwhite vs Kobo Aura HD comparison for further details.

It depends on what you value more. If screen resolution and clarity and sharpness of text are most important to you, then you should get Kobo Aura HD or wait for Kindle Paperwhite 2. If the largest ebook store with the best prices (and the most free books) is important for you, then get the Kindle Paperwhite.

Is there a better Tablet than the Kindle Fire HD?

Yes, there are several. My rough ranking would be -

1. iPad Mini.
2. Surface Pro if you want a good keyboard and Windows 8.
3. iPad.
4. Samsung’s higher end Tablets.
5. Surface RT.
6. [Tied] Kindle Fire HD and Kindle Fire HD 8.9″ and Nook HD and Nook HD+ (the latter two are on sale for $129 and $149).
7. Nexus 7.
8. Other Android Tablets.
9. Other Windows 8 Tablets.

Kindle Fire HD is, however, the best Tablet under $200 (tied with Nook HD). It’s also tied with Nook HD for best 7″ Tablet.

1. If you’re looking for a smaller 7″ tablet, at a price below $200, then Kindle Fire HD is perfect for you. Note: Nook HD might be a better fit if your budget is tight.
2. If your budget is higher, get an iPad Mini or Surface Pro or iPad. If you need a larger screen, but are short on money, consider Kindle Fire HD 8.9″ and Nook HD+.

Well, that brings us close to the end of our ‘Best Kindle for You’ article.

What is the Best Kindle for Me? Only you can decide

We’ve walked you through all the choices and it’s pretty clear that -

1. You need to decide whether you want an eInk Kindle or a Kindle Tablet.
2. If you want an eInk Kindle, then Kindle WiFi, Kindle Paperwhite, and Kindle Paperwhite 3G are all good choices. Kobo Aura HD is also worth considering.
3. If you want a Kindle Fire Tablet, then your choice depends on your budget. If your budget is tight, the $199 Kindle Fire HD and $129 Nook HD are your two top choices if you want a 7″ Tablet. If you want a larger Tablet but have a tight budget, the $269 Kindle Fire HD 8.9″ and the $149 Nook HD+ are your two top choices.
4. If your budget is more expansive (or limitless), then iPad Mini, Surface Pro, and iPad are your best three choices. The new Kindle Fire HD 2 will arrive by end of this year. At this stage, however, it’s hard to say if it will beat out iPad Mini and Surface Pro. It’s somewhat unlikely.
5. You could get a Tablet and an eReader. A good combination for the budget conscious would be a $149 Nook HD+ and a $69 Kindle WiFi. For those with more of a budget, you could get an iPad Mini for $329 and a Kindle Paperwhite with Ads for $119.

Best of luck with your decision on ‘What is the Best Kindle for Me’. If you can wait 2-3 months, you’ll have a much better choice of eInk Kindles – perhaps even a Kindle Paperwhite HD. If you can wait 4-5 months, you’ll have a much better choice in Kindle Fire Tablets.

Now, B&N has ‘extended’ it beyond Father’s Day – conclusively proving it’s a fire sale to clear out stock, and not some ‘super special Father’s Day sale’.

B&N’s Press Release about the Nook HD Fire Sale is pretty interesting, especially this paragraph -

“With the fantastic success of our Father’s Day promotion, we decided to extend the great prices on NOOK HD and NOOK HD+ to help our customers gear up for a great summer reading season,” said Jamie Iannone, President of NOOK Media. “In our stores and online, customers have embraced these beautifully designed, lightweight devices with stunning displays that offer great reading and entertainment content.  We’re thrilled to keep in place our best prices ever and deliver great value to make reading more affordable.”

Well, good for them if they are seeing a great reaction. It certainly helps them clear out all the unsold stock they presumably had from their disastrous Holiday 2012 season.

It’s painfully obvious now that B&N is ending Nook HD (and perhaps replacing it with something else? perhaps not)

There were two possibilities we discussed -

1. B&N is ending Nook HD Tablets completely and leaving the Tablet space.
2. B&N is switching over to Windows 8 Tablets and clearing out stock of Android based Nook HDs.

The former seems likelier. However, one of the two is definitely happening, based on the extension of the crazy Father’s Day fire sale on Nook HD and Nook HD+.

At Paid Content, Laura Owen has this to say about the Nook HD fire sale extension -

combine the price cuts with the multiplerumors that Barnes & Noble plans to phase out the Nook tablet line by the end of fiscal year 2014 (which would be a year from now) and it starts to look as if B&N is trying to clear out stock. (The company has already phased out the lower-end Nook Tablet and Nook Color.) We may get more answers from the company’s next earnings report, which comes out June 25.

Well, yes, it was apparent that B&N was clearing stock once it started doing weekly sales on Nook HD and Nook HD+. This pretty much confirms it.

WebProNews thinks B&N should see how Nook HD and Nook HD+ sell at the new lower prices before deciding to leave the hardware market. I would agree. B&N needs to figure out the exact reasons its comparably good hardware lost so badly to iPad Mini and Kindle Fire HD. If it can fix those issues (Google Play is a good first step), then it should consider staying and fighting in the Tablet Space.

Another possible reason for Nook HD not selling well is that Apple and Amazon have huge customer bases and huge marketing budgets. B&N hardly advertised the Nook HD and Nook HD+. When it did, it focused too much on the Julie prototype – a mother with two young kids and a husband. That sounds good in theory. In actual practice, we probably have a lot more single mothers and unwed people and teenagers and older couples and boomers interested in tablets than the fairy tale ‘perfect couple in their 30s’ with two young kids. I wouldn’t be surprised if the percentage of prospective Tablet owners that fit the ‘Julie’ prototype is less than 20%. B&N was alienating 80% of its market by focusing so strongly on kids’ books and kids’ apps and ads focused on perfect little 2+2 families.

Here’s what B&N is sending out in emails -

Great news! Due to popular demand, we will be extending our amazing offer for our NOOK HD Tablets.

NOOK HD+ Tablet Only $149 – savings of $120 off regular price!
NOOK HD Tablet Only $129 – Savings of up to $80 off regular price!

Got to love it. Nook HD at $129 indefinitely. Perhaps it forces Amazon to drop prices on the Kindle Fire HD.

Well, let’s do some pricing analysis using two methods, using only the Kindle Store, and figure out what the truth is.

1. First, let’s do average pricing assuming every book in the Top 100 sells the same amount. This gives us one estimate.
2. Second, let’s do average pricing assuming book sales are approximately – 10,000 a day for #1 to #10, 2,000 a day for #11 to #20, 1,000 a day for #21 to #50, and 500 a day for #51 to #100. This gives us a second estimate.

From these two estimates, we can get a good idea of what the actual average price of books in the Top 100 is.

Kindle Store Top 100 Pricing

Here’s what we have in the Kindle Store Top 100 -

1. Kindle Store Sales Ranks of Top 100 Books at $1 – #7, #9, #20, #22, #24, #26, #27, #28, #30, #33, #38, #44, #47, #48, #55, #72, #86, #90, #96, #97, #98.
2. Kindle Store Sales Ranks of Top 100 Books at $2 – #1, #32, #53, #56, #89, #91.
3. Kindle Store Sales Ranks of Top 100 Books at $3 – #4, #15, #23, #34, #46, #60, #75, #77, #80, #85, #95.
4. Kindle Store Sales Ranks of Top 100 Books at $4 – #3, #11, #13, #16, #18, #25, #37, #49, #54, #57, #58, #63, #67, #68, #76, #84.
5. Kindle Store Sales Ranks of Top 100 Books at $5 – #17, #41, #83, #99.
6. Kindle Store Sales Ranks of Top 100 Books at $6 – #50, #51, #61, #64, #65, #88.
7. Kindle Store Sales Ranks of Top 100 Books at $7 – #35, #73, #87, #93.
8. Kindle Store Sales Ranks of Top 100 Books at $8 – #12, #45, #92, #100..
9. Kindle Store Sales Ranks of Top 100 Books at $9 – #9, #70.
10. Kindle Store Sales Ranks of Top 100 Books at $10 – #5, #19, #29, #31, #62, #69, #71, #74, #79.
11. Kindle Store Sales Ranks of Top 100 Books at $11 – #42.
12. Kindle Store Sales Ranks of Top 100 Books at $12 – #21, #36, #39, #40.
13. Kindle Store Sales Ranks of Top 100 Books at $13 – #2, #6, #8, #14, #43, #52, #59, #66, #78, #82 (assumed price), #94.
14. Kindle Store Sales Ranks of Top 100 Books at $14 – None.
15. Kindle Store Sales Ranks of Top 100 Books at $15 – #81.

This is a very interesting list. Interesting to see $1, $4, and $3 being so popular. $13 is just as popular as $3 and $10 is also very popular.

Quick Review of the Frequency of Every Price Point in the Top 100

1. 21 books at $1. That’s massive and is bound to drop the average price. If 20% of your Top 100 are at $1, that says something. It’s also apparent that readers are voting with their still-heavy wallets when it comes to book pricing – $1 works.
2. 16 books at $4 ($3.99 to be precise). Not sure why $3.99 beats out $1.99, $2.99, and $4.99. Perhaps that whole psychological thing of readers seeing $3.99 as $3. Why then does $2.99 not work better?
3. 11 books at $3. $3 is the price at which Amazon starts giving Authors 70% revenue share. That, combined with readers preferring prices below $5, is perhaps why $3 and $4 do so well.
4. 11 books at $13. The joint third-most-popular price point. It seems Publishers are making $13 work for new books. It’s interesting to see 4 books at $13 in the Top 15 and then nothing until #43. Perhaps $13 works for new books but then reduces longevity in the Top 50.
5. 9 books at $10. This was the price point we were promised in 2007 and 2008 – $9.99. Interesting to see it become the 5th most popular price point.

The rest of the figures are there for you to see. This list obviously changes frequently. However, this is a reasonable list. I don’t see prices going up higher anytime soon.

Average Pricing and Pricing Analysis assuming Similar Sales at all Top 100 Sales Ranks

Yes, we know this is wrong. However, this gives us a good bound.

If we just weigh each sales rank equally, and given the relatively balanced distribution this isn’t a terribly bad idea, we get $571 as the amount required to buy all 100 books. That gives an average price of $5.71.

That should be a wake-up call to Publishers who complained that $9.99 was unsustainable. They started the Agency Model and tried to torture users with $13.99 and $15.99 prices. Now, instead of a nice and healthy $9.99 per ebook, they are faced with the average Top 100 price being just $5.71.

That’s incredible. $5.71. However, this is a very rough method. So let’s try something a bit more accurate.

Average Pricing and Pricing Analysis assuming Sales Figures drop sharply

10,000 a day for #1 to #10, 2,000 a day for #11 to #20, 1,000 a day for #21 to #50, and 500 a day for #51 to #100

We can simplify this as - 20 a day for #1 to #10, 4 a day for #11 to #20, 2 a day for #21 to #50, and 1 a day for #51 to #100. This simplification won’t affect the average price (just imagine we divided each figure by 500).

1. Average Price of the Top 10 – $6.89. Multiplied by 20 – $137.8.
2. Average Price of #11 to #20 – $5.63. Multiplied by 4 – $22.51.
3. Average Price of #21 to #50 – $5.06. Multiplied by 2*3 (because there are 30 books) – $30.364.
4. Average Price of #51 to #100 – $5.844. Multiplied by 1*5 (because there are 50 books) - $29.22.
5. Grand Total: $219.894.
6. Average = Grand Total/35 = $6.283.
7. An average of $6.283 per book. Very interesting to see the Top 10 being much higher than the other sales ranks. Perhaps due to the presence of three $13.99 books, one $10 book, and one $9 book.

$6.283 is surprisingly close to our previous estimate of $5.71. $6.283 is probably more accurate since it factors in the fact that the Top 10 and Top 20 sell a lot more than the rest of the Top 100.

Conclusion: The Average Sales Price of the Top 100 Kindle Books is perhaps around $6.283

Based on the above estimates and lists, we arrive at a few data points and guesstimates -

1. Average Sales Price of a Top 100 Kindle Book: $6.283.
2. Most Popular Price Points: $1, $4, $3 and $13 (joint), $10.
3. Most Popular Price Bands: $1, $3 to $4, $10 to $13.
4. Average Sales Price of a Top 10 Kindle Book: $6.89.
5. Average Sales Price of a Book in the bottom half of the Top 100: $5.844.
6. There are only 17 books priced above $9.99 in the Top 100. Contrary to the perception that $13.99 is winning out due to impatient Kindle owners, we are seeing prices above $10 mostly fail. The exception is $13 and that might be linked to the newest releases all being $13.
7. There are an absolutely massive 58 books below $5. This suggests prices below $5 are going to be the norm for the Top 100 in the near future.
8. There are 21 books at $1 and 16 books at $4 suggesting that $1 and $4 (or perhaps $3) might be long-term stable price points.

That figure of $6.283 is absolutely fascinating. The assumption all along has been that we would settle at price points such as $9, $10, $13, and $7. That would result in an average sales price of $10 to $11. In actuality, the advent of indie authors has forced prices down massively. There are very popular price bands of $1 and $3 to $4. These bring down prices to $6.283 on average.

$6.283 is very interesting. Even more interesting is the rise of $1 and the $3 to $4 band, and the possibility that average prices drop below $5 and perhaps stabilize in the $3 to $4 band.

1. Spend a few hundred thousand dollars each on making reading apps for iPhone, Android, iPad, PC, Mac, Blackberry, and Windows 8.
2. Get millions of customers each month.
3. These millions of customer buy books from you each month.

Money for nothing (Dire Straits would approve).

However, there are a few big hidden caveats. Let’s start with the first.

Kindle Reading Apps can never be as Valuable as an actual Kindle or an actual Kindle Fire HD

Kindle Fire HD and Kindle Paperwhite offer a few advantages that Kindle Reading Apps don’t -

1. Exclusivity – The only reading app on these devices is Kindle. Note: Yes, you can sideload. No, most people won’t sideload a different reading app.
2. Power of the Default – The DEFAULT is the Kindle Reading App. This is a very big deal. Depending on what survey/set of statistics you read, between 50% to 89% of people never ever change their default settings.
3. Optimization – You can tweak and optimize the reading app and the device to provide a GREAT Reading Experience. You obviously can’t tweak the hardware of an iPhone or a Blackberry if all you have is a software reading app.
4. Integrated Store – Apple sets its rules where either Kindle and Nook pay Apple 30% or they remove the store from their Reading Apps. Kindle Paperwhite and Kindle Fire HD allow the store to be integrated with the reading experience. Note: It’s well and good to say – Users can just go buy from the browser. However, the truth is that users want convenience – they want the store built-in.
5. Sell Other Things – Amazon and B&N both sell movies to Kindle Fire HD and Nook HD owners. With a reading app, they can’t really do that. Yes, they can release a separate app – But then things aren’t easy or smooth. Again, the power of the default kicks in.
6. Visibility – Tap ‘Books’ on a Kindle Fire HD and it starts the in-built Kindle Reading App. What better visibility could there be? There are numerous things like ‘Recommendations’ and ‘Sponsored Ads’ that promote the in-built Reading App and the Kindle Book Store.
7. Subtle Lock-In of Users – There are various types of lock-in and one type is having the user used to the device and to the reading app. Familiarity. With your own device you can increase this cognitive lock-in.

There are other advantages too. Hopefully these 7 advantages illustrate why owning the Device, in addition to the Reading App, is a big competitive advantage.

The second big caveat is that with a Reading App you’re building a Castle on someone else’s property.

Building Castles on Other People’s Property is a Bad Idea

You decide to build a castle on someone else’s property. Then you start a business of running tours in the castle. Money for nothing – right?

Well, not really.

Let’s look at the obvious risks -

1. You can get taxed. The property owners (App Store owners) can start charging you money. There are lots of examples of App Stores that didn’t charge money and then later changes the rules. Facebook used to give developers 100% of earnings. Now it’s 70%. Apple used to allow free in-app buying of books. Now there’s a 30% tax.
2. You can have your castle broken down. You get up one fine morning and the land owners claim you broke the terms of the original agreement and they’ve broken down your castle. All your hard work and blood and sweat – Gone!
3. You can have your castle hidden. The owners of the land might realize there’s a lot of money and they might build their own castle right in front of yours. Users can’t even see your castle any more. Note: With App Stores this is absolutely terrible. It’s as if your castle no longer exists. At least with something physical, it’s there for people to see. With a virtual thing, such as an app or a game, it just vanishes.
4. You can have your customers rerouted. Let’s say you build up a big business and have lots of customers arriving, on someone else’s property, to see your Castle. That someone else can set up businesses and other amusements that route your customers elsewhere. This isn’t an issue until you realize that you’re spending money attracting people to the castle but they’re ending up spending their money elsewhere.
5. You can have your castle taken over. This is perhaps the worst case scenario. You have your customers and your castle and all your investment taken over by the land owners. You find out that the property rules in that part of the world say that if the castle is on their land, it’s theirs. Should have read the fine print.
6. The land owners might make a mistake and drive traffic away. Perhaps they loan out part of their land to a nudist colony and families stop visiting your castle. Perhaps they erect a graveyard right across the road from your castle.
7. The land owners might not take proper care of the land and a natural disaster might cause huge damage to your castle. Keep in mind that not just your mistakes, but mistakes on the part of the land owners could kill your business. There are two big ways in which things can go wrong, instead of one.

The truth is that when you build a business on someone else’s land (app store, website, device) – You’re doing free Research & Development for them. You’re staking your future on their future. You’re leaving the future of your business in their hands.

Chances are, sooner or later, this will come back to bite you.

The third big caveat is that human nature won’t allow the land owners/store owner to let you succeed freely.

Your Castle doing too well means the Land Owners want the Lion’s Share of the Profits

Think of it from the perspective of the Land Owners – They were so generous and let you build a castle on their land. Then they watched in shock as you started doing better than them. They just want to make things right and get most of the profits.

The ideal situation for the Land Owner is what Apple has with the App Store -

1. Lifetime Amount Paid out to App Makers – $12 billion.
2. Lifetime Profits for App Makers as a Group – Negative Profits i.e. Losses. Note: If you were to average out the costs of the 700,000 or 800,000 apps in the store, even if you assume just $20,000 spent per app made, that’s $14 billion. Now factor in marketing costs, costs to do updates, costs to service customers. We will easily reach $20 billion in costs.
3. Monthly Profits for Apple from selling $500 Phones and Tablets that come with super cheap $1 and Free Software – $3 billion a month.

That’s what makes App Store owners and Land Owners happy – Look at all these app makers toiling away for Negative Total Profits (with the most profitable 2-4 making $50 million a month) while we make $3 billion a month in profits.

That’s the role the land owner envisions for you when they let you build a Castle – You are helping drive people to their lands and properties and making them money.

If the situation reverses (for example with Zynga and Facebook, at the time Zynga was riding high), then the Land Owners (they are human after all) get jealous and spiteful. They do things to steal your success and/or kill it -

1. Route users to someone else’s castle, or to the land owners’ own castle.
2. Divide and Conquer. Split up your customer stream between you and three-four other competitors.
3. Kill you by taking away your advantages. What Facebook did with Zynga - Zynga got killed because Facebook just nullified Zynga’s advantages and built up other developers instead.
4. Tax you and make your venture unprofitable or far less profitable.
5. Hide you so you get far fewer visitors. This can be done in lots and lots of subtle ways.
6. Close down the Lands. If you’re making millions in profits while they make nothing, they might just close down everything.
7. Sabotage you in subtle and not-so-subtle ways.

For every example of an App Store or Device that’s happy to see other companies make more profits than the device/store owners themselves, there are ten examples where the app store owner/device owner moves swiftly and decisively to close things down and/or to reroute the lion’s share of the profits to themselves.

It’s like Vegas – The House Always Wins!

If Apple iBooks has 20% Market Share, that means Apple will close down Kindle Reading Apps sooner or later

This is how it works -

1. You allow the Reading Apps in. So that customers buy your device.
2. You tax the Reading Apps and/or add subtle changes so that the experience of reading books and buying books becomes better with iBooks.
3. When you feel you have enough momentum and lock-in, you kick out other reading apps and shift everyone to your reading app.

What was the role that Kindle and Nook Reading Apps played? Getting people to your ecosystem.

How long are they needed? Only for as long as it takes until users get attached/locked-in to your ecosystem.

Apple and B&N are thinking – Wow! We’re getting customers for free who are buying books from us and making us $2 to $4 per book.

Apple is thinking – Wow! We’re getting customers who would have chosen another device. They are making us $200 to $400 per device. Once we have enough customers, we’ll do a calculation and if the money from books is more than from additional device sales due to Kindle and Nook Apps, we’ll kick them out.

As we sell more and more devices, the inflection point gets nearer and nearer. Apple and Google are going to teach Amazon a harsh lesson in the rewards of building Castles on other people’s Properties.

Questions worth Pondering

1. Are there more Authors than Readers?
2. What’s stronger – The Desire to Read OR The Desire to Be Read?
3. Is it really true that 80% of Americans want to write a book? Note: I’m in no way endorsing that site.
4. Now that it’s so easy and straightforward to write and publish your own book – How many of those 80% of Americans will write a book?
5. Is writing a book a means to make yourself immortal and/or leave a legacy?
6. Is writing a book one of the deepest ways to actually communicate with others?
7. With all these companies serving readers, who serves authors’ needs?

We could go on and on.

The world of Books and Publishing is changing. A lot of people are very focused on what happens with Publishers and the Top 100 Charts.

However, the real questions have to do with Authors and what happens in the Long Tail. The area between the Top 250 and the 10,000s in sales rank. Who are the authors who are getting read? Who are increasing their readership?

If we consider human communication, there is obviously value in the people who reach tens of millions of people and what they have to say. However, most of the truly meaningful conversations are in much smaller groups.

Are the Small Successes in Books more important than the Big Ones?

Let’s contrast two situations -

1. A bestselling author writes a book that’s good entertainment and it sells 1 million copies. A few hundred thousand people read it and enjoy it and consider it good entertainment.
2. An author writes a book that’s very targeted at a particular audience and it sells 10,000 copies. Half of those people read it and are really moved by it. For a few thousand people it’s a life changing experience.

There are, of course, bestsellers that can be a life-changing experience too. However, the more targeted you get, the higher the chance you have of really impacting people and speaking to their hearts.

That, in my opinion, is one of the major reasons that so many people want to write a book. As humans we pass on our lessons and experiences via stories. Writing a book does that – It allows us to progress and evolve and share our learning and experiences.

You want to tell your story. Just as stories you heard from your parents and grandparents helped you form a better picture of the world, you want to let people benefit from your life experiences.

The more you narrow down your audience and speak specifically to them – the higher the chance you impact them. Of course, with sufficient skill you can write a very general book that touches tens of millions of people very deeply.

However, what about the hundreds of millions of people who have valuable things to share but are never going to get ‘bestseller writer’ level of skill or publicity? What about them? They should have a means to reach people too. Even if it’s just a few thousand or a few hundred.

That’s what we are seeing with ebooks and ereaders. An immense number of people are suddenly getting the opportunity to share their stories with the people they need to share them with.

Everyone has a story to share. How many people are willing to listen?

We have hundreds of millions of people around the world that are reaching the stage where they have enough rich life experience to write meaningful things. We also have nearly as many people who understand the nuances well enough to write things that thrill and give pleasure and scare and excite and connect.

Even among the younger generations we have some fine writers.

Unfortunately, of the billions of people around the world, we might not have as many people who are willing to listen or read or even be open to the stories being shared.

How many talkers do you know? How many good listeners?

If writing a book is telling a story, and if reading a book is connecting with that story, it’s worth asking – Is it easier to read a story or to write a story?

A World where everyone has a Story to Share and a Means to Share It, but Perhaps No One to Read It.

With self-publishing so easy now, we might see a shift where people being to think of writing books the way they thinking of starting a blog – Let’s just do it.

There’s no risk. It’s easy. It’s straightforward. You don’t need to invest much money.

The rewards are pretty great. For a lot of authors, even a handful of people reading your book is a win. Anything is better than not being heard. Anything is vastly better than not taking a shot.

So, we end up with almost every single person who has a story to share thinking writing a book is a great idea. A Book – it holds so much more meaning than a blog or an online journal or a profile on a social network.

On the other hand, how many people are willing to read these books? In particular, are there enough readers to take a chance on all these first-time book authors?

Even before any actual reading happens, how do all these new authors reach readers. There are already over a million ebooks available in most ebook stores. The only books that actually get any visibility are the ones in the various Top 100 charts. Some people search but there are just too many books. If there are 150,000 romance ebooks, how are readers going to get through all of them? Do all the new authors have any way of standing out?

If Authors keep increasing, at some point of time they will exceed Readers

As more and more people share their stories and publish books, we’ll see the number of Authors exceed the number of readers. To make matters worse, people writing a book have less time for reading. It’s not inconceivable that we end up in a world where -

1. There are more authors than readers.
2. The biggest challenge shifts from ‘getting your book published’ to ‘getting your book noticed and read’.
3. Finding readers becomes the key skill set that differentiates successful authors (not quality of writing).
4. Readers just get swamped with choice. Imagine having 10 times more books than we have now, while the number of readers at most doubles.
5. Authors start evolving more and more interesting strategies. There are already authors offering books for free, buying ad slots, offering gift cards for a review, and other crazy things. What happens once the situation gets worse?

Here’s the twist – I think it’s ALREADY happened. There are already more authors than there are readers.

We aren’t yet aware of this because most of the authors have tiny followings and no visibility. However, gradually it’ll become clearer and clearer that the number of authors is ABSOLUTELY MASSIVE. That it threatens to dwarf the number of readers.

What happens to Books and Publishing then? Perhaps the same that happens to any market where Supply massively exceeds Demand.

The thing that is really intriguing is that a lot of them have been indie authors. Riding a Hot New Market to hit the Top 100.

It’s a replay of what happened when YA and Twilight and Sparkling Vampires suddenly became big. A lot of indie authors were able to take advantage of the trend before Publishers could.

At first, this seems strange.

1. We have the Big 5 Publishers with thousands of people, hundreds of millions of dollars, specialists in every area. They have all the expertise, all the tastemaker skills, all the polish and refinement tools.
2. We have indie authors who are mostly one-person crews. Most of them have never had a hit before. Some of them have never even written a book before.

How are Indie Authors able to outpace Big 5 Publishers to the opportunity?

Well, it’s quite simple.

Publishers move like Giant Dinosaurs, Indie Authors move like Cheetahs

Here’s what happens with a Publisher -

1. A book like Twilight or 50 Shades of Gray shows there’s demand for a particular type of book. Basically, it validates the existence of a lucrative market. Let’s call it the ‘Hot New Market’.
2. Publishers start trickling this information down to Agents and Authors. Perhaps it takes 3-4 months until Publishers decide which authors should try and tap into this Hot New Market and get a few of them to agree.
3. The Author takes 3-9 months to finish the book. Perhaps longer.
4. Then, and this is the surprisingly slow part, it takes ONE ENTIRE YEAR for the finished book to be polished and readied and published to the stores.
5. The End Result: Approximately 1.5 to 2 years after the Hot New Market was found, Publishers have books catering to that market. Sometimes, Publishers move faster and get the books out in 1 to 1.5 years. However, it’s usually 1.5 years or longer.

So, and you can see this if you check some of the new Young Adult novels coming out from authors who haven’t written YA novels before, a Hot New Market gets catered to after 1 to 2 entire years have passed.

Readers just have to twiddle their thumbs while their need for new books in the Hot New Market goes unfulfilled.

This was quite alright when Publishers controlled the distribution channels and were the gatekeepers. During those dark and dreary 1 to 2 years of waiting, no one else could cater to the Hot New Market and the demand went unfulfilled – sometimes it increased, sometimes it died away. However, no one except Publishers could cater to it.

Indie Authors, who can now reach readers quickly and easily, without needing the blessings of a Publisher or a Bookstore Chain, can react much quicker than Publisher Dinosaurs.

1. A book, let’s call it Book X, proves there’s a Hot New Market with HUGE demand.
2. Indie Authors who are quick can make a call within a few months. Perhaps even a few weeks. Let’s be conservative and say 2 months.
3. Indie Authors, if they manage things well, can finish the book in 3-6 months.
4. Optionally, Indie Authors can take a few months to polish the book.
5. That’s it. They are ready to release. They can send out the ebook quickly and easily. The minute it’s done, it’s ready to be sent out and readers can get it the next day – No printing, no shipping, no distribution, no shelving, no complicated business deals.
6. Total Time: 5 to 9 months.

Whereas Publishers take 1 to 2 entire years to respond to a How New Market, Indie Authors can respond within 5 to 9 months. A few Indie Authors are even faster.

What is that Hot New Market going to do in the Interim?

Here’s the timeline -

1. Day 1: Book X launches.
2. Year 1: Book X proves the existence of a Hot New Market. So an entire legion of readers discover and fall in love with this Hot New Market.
3. Year 1 and Year 2: All these readers, who now love this Hot New Market, wait for more. But there’s NOTHING for them.
4. Opportunity for Indie Authors: During Year 1 and Year 2, there are not going to be ANY Publisher published books catering to this market. There might be a sequel to Book X – that’s it.
5. Publishers: Take their 1 to 2 years. By end of Year 2, or perhaps as late as Year 3, they launch books that cater to the Hot New Market.

Indie Authors get 1 to 1.5 years where they have -

1. A Hot New Market that is DEMANDING more books to satisfy it.
2. Publishers unable and/or unwilling to meet this STRONG DEMAND for the entire 1 to 1.5 years.

Basically, Indie Authors become the only Hamburger stand at a Carnivore Convention.

Meeting Demand Quickly is more important than Price

Publishers seem to fixate on ‘low prices’ of books by indie authors. However, the real danger indie authors pose is SPEED.

1. Speed at which Indie Authors can react to a Hot New Market.
2. Speed at which Indie Authors can publish sequels and series.
3. Speed at which Indie Authors can switch from one market to another.

For that 1 to 1.5 year gap, when the Hot New Market is waiting for ANY Book that will satisfy the insane demand, Publishers have nothing to offer. Price isn’t even a factor.

Indie Authors, on the other hand, can deliver quickly and repeatedly. It will take Publishers 1.5 years to 2 years to refocus an existing superstar author on the new market opportunity, polish the book, and ship it. In that same time period, a superstar Indie Author can deliver an entire 3-book series. The first might arrive within 6-9 months.

It’s not even a contest.

That Hot New Market can either wait for 1.5 years, or it can read the books Indie Authors are delivering. A LOT of readers pick the Indie Authors. That’s why we see a non-stop stream of ‘Billionaire’ indie titles hitting the Top 100. It’s a trend that’s going to get much stronger – Indie Authors are getting better and better at catering to Hot New Markets long before Publishers can.

Today, we find out two big things (thanks to Eddy Cue, the senior most Apple executive questioned so far (SVP of Internet and Services)).

1. Apple considered splitting Books & Music between Amazon and Apple. The key part from CNet’s coverage of DoJ vs Apple -
   

   Eddy Cue, Apple’s senior vice president of Internet software and services, who took the stand Thursday in district court in lower Manhattan, also said Apple considered splitting the market with Amazon in a setup where Apple would control the music market, while Amazon would monopolize books.

2. Apple’s Eddy Cue pretty much admitted that ebook prices went up because of Apple’s deal with Publishers.

This is a bit of a surprise. On the one hand, Apple claims it did nothing wrong. On the other hand, their senior executives are admitting Apple’s moves led to higher ebook prices.

Apple’s Reality Distortion Field affects Apple Executives too?

Apparently, Mr. Cue got testy when asked what he thought about ebook prices going from $9.99 to $12.99 to $14.99. He didn’t think it hurt consumers. Here’s what he said -

“Our consumers were protected by my price points,” he said. “I thought we were going to treat our consumers very, very fairly.”

Wait a minute. Books were $9.99. Then Apple struck a deal with Publishers and caused prices to rise to $12.99 to $14.99.

Apple executives actually thought by doing this they were protecting consumers?

That’s some good Kool-Aid they’re serving at Apple’s SpaceShip One HQ.

Apple to control Music? Amazon to control Books?

The juiciest part of this entire conversation is this:

Apple considered splitting the market with Amazon in a setup where Apple would control the music market, while Amazon would monopolize books

Let’s get this straight – In the middle of a collusion/price-fixing trial, Apple’s most senior executive questioned so far, brings up the fact that Apple was discussing what would be an EVEN MORE ILLEGAL arrangement.

Amazon to control Books and in return Apple gets to control Music.

Bonus Points for using ‘control the music market’ and ‘monopolize books’. Let’s not leave any room for doubt, shall we.

This is just madness. Why on Earth would you mention this? Does anyone see any reason for Apple to mention it was considering this whole ‘Let’s collude with Amazon and split and monopolize the Music and Books markets’ idea?

It’s an interesting thought. There are probably all sorts of illegal arrangements and secret/silent partnerships that happen all the time. However, bringing up that you were considering it in the middle of a DoJ trial – that’s just amazingly foolish.

How would an ‘Apple to control Music, Amazon to control Books’ arrangement work?

Apple probably considered music very important for selling iPods and for maintaining its ‘coolness’. It perhaps thought Amazon valued books a lot because Amazon had the Kindle and a huge revenue stream from selling paper books.

Perhaps Apple was thinking about asking Amazon to end Amazon Music and/or channel it to iTunes. In return, Apple would channel iBooks to Kindle Store. The arrangement would work well. However, DoJ would come after Apple and Amazon. Perhaps it would be a secret deal where iBooks either stalls or Apple secretly promotes Kindle a ton. In return, Amazon would ramp down Amazon Music.

At this point, it seems pretty obvious that the DoJ needs to investigate how many of these ‘secret’ partnerships there are between the big technology companies.

Apple wanting to partner up with Amazon and secretly carve out monopolized markets for each other. Wow! Every day you learn something new.

The key details -

1. Kindle Fire HD arrives in India on June 27th.
2. Kindle Fire HD 8.9″ and Kindle Paperwhite will also be released.
3. Kindle Fire HD will be Rs. 15,999 ($275). Kindle Fire HD 8.9″ will be Rs. 21,999 ($379). Kindle Paperwhite will be Rs. 10,999 ($189). Again, just like with Kindle Fire HD China, the prices are crazy expensive. India’s price index is roughly 4 times less than in the US. So, these prices are really expensive.
4. Kindle WiFi is available for a more reasonable Rs. 5,999 ($103).
5. Amazon had already launched Amazon India a week or so ago.
6. Kindle Fire HD and other devices will be sold via partners – since Amazon isn’t allowed to sell its own products directly.
7. Amazon’s distribution partner will be Redington. Kindle Fire HD will be sold in lots of retail outlets and in most of the major Indian cities -
   

   All the Kindle devices will also be available at retail outlets including Croma, Reliance Digital, E-Zone and Vijay Sales in major cities such as Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Chandigarh, Ahmedabad and Pune.

It’s an interesting move.

Medianama points out the huge price difference between Amazon.com and Amazon.in on Kindle Fire HD and other Kindles. However, buying from Amazon.com entails shipping costs and import duties and a longer delay in getting your Kindle Fire HD.

Why is Amazon launching Kindle Fire HD in China and India at absurdly high prices?

I don’t get it.

Kindle Fire HD China is $244 and Kindle Fire HD India is $275.

Does Amazon really expect to do well at these prices? Yes, there are a billion people each in China and India. Yes, lots of them have money and can easily afford $275 or $244. However, at those prices they would just get an iPad or something with more brand power/status signalling power.

Why sell, what is basically a budget Tablet, at a premium price?

Wall Street Journal points out this launch promotion for Kindle Fire HD in India -

Starting today and for the next two weeks, customers in India can download one best-selling Kindle Book each day for free, the company said in a statement.

That’s nice. However, that doesn’t make up for the Kindle Fire HD being $275 in India.

Will Kindle Fire HD do well in India?

I doubt it.

Even iPhone didn’t do well in India until Apple started doing a lot of US style subsidized sales.

Kindle Fire HD has none of the fashion/status benefits that iPad and iPhone have. There’s a segment of the population in India that is very status conscious and another segment that is very rich. There’s also quite a bit of overlap. However, Kindle Fire HD is expensive without any significant status signalling benefits. It’s not really a fashion accessory like lots of devices that have done decently well in China and India.

Not sure what Amazon thinks Kindle Fire HD’s Unique Selling Proposition will be at $275. Given the relative spending power/price index, that $275 translates into $1,100 effective cost.

That instantly rules out 90% or more of Indians. The remaining 10% – Why not pay $100 to $200 more and get an iPad Mini? Why not get a Samsung Tablet with Google Play Store instead?

If Amazon does do well with Kindle Fire HD, it would be super interesting to find out who bought it in China and India and why. Anyways, Kindle Fire HD India is here and now it’s available in the only two countries in the world with populations above one billion. That’s worth something.