The Amazon website is down today – Well, to be precise it’s up sometimes and down sometimes. It’s certainly something never experienced before by a lot of Amazon customers.
It presents a good opportunity to wonder about a few other things -
- How committed are Amazon to the Kindle? Is it safe to invest in a Kindle?
- Is it safe to invest in Kindle eBooks?
- What happens if WhisperNet and the Kindle Store go down or Amazon finds them to be unsustainable and closes them down?
These are questions worth asking and they’re definitely worth answering – especially as there are certain people spreading misinformation and trying to scare Kindle owners.
Please note that this post deals with contingency case scenarios. At the moment Amazon is a very healthy, growing company that might end up staying around for 100+ years. They’re basically taking over all of retail and are as unlikely to disappear as WalMart or Microsoft. This isn’t as obvious as it should be because they’re not Silicon Valley or NYC based and they don’t advertise a ton with the press (thus ensuring they don’t get fawning Press Coverage).
Is it safe to invest in Kindle eBooks?
Let’s get this out-of-the-way as it’s very easily solved.
If the unthinkable happens and Amazon goes extinct then you can always use an easily found hack to remove DRM from your Kindle eBooks and get DRM free versions. If there’s ever any doubt about Amazon’s long-term survival or Amazon’s long-term presence in eBooks – Download backup copies of all your Kindle eBooks and save them on your computer.
At the moment Kindle eBooks look like they might turn into a billion dollar business by end 2011. They are also the long-term replacement for Amazon’s physical book business. These factors combine to ensure that Amazon are extremely unlikely to ever leave the ebook business.
There’s a minor chance that Amazon lose badly in eBooks. Even if that were to happen Amazon would not leave. The only possibility of Kindle Store disappearing is if Amazon disappears. In case you want to prepare for that pretty low probability event – simply download all your Kindle eBooks and saved them on a computer and also on a zip/pen drive.
Is it safe to invest in a Kindle?
This is also a relatively straightforward answer.
It’s easy to get distracted by all the Kindle Apps and think Amazon don’t intend to support the Kindle long-term but that’s very far from the truth. Amazon just spent a ton of effort to release Kindle 2.5, they are putting a lot of effort into the Kindle App Store, and they are (if the rumors are true) set to release Kindle 3 in August.
Strategy wise it makes little sense to end the Kindle when it’s the #1 eReader, a device that Amazon controls totally, and also a direct channel to customers. Ending the Kindle would be equivalent to Target closing all its stores and opening up booths in WalMarts. If Amazon ditch the Kindle it would be terrible strategy for the long-term and Amazon always plan out their long-term strategy very well – they are not going to ditch the Kindle.
It’s also worth mentioning that Kindle owners buy all their eBooks from the Kindle Store as no other DRM enabled format works on the Kindle. If Amazon ditch the Kindle they would be left selling ebooks to users on devices which allow readers to buy eBooks from any store.
Consider the question yourself – Would Amazon leave a market in which they are #1 and a market which helps them be the #1 in eBooks?
It’s not very likely. Most arguments that paint a picture of Amazon leaving the eReader market are written by people who either don’t read or don’t realize that Amazon is trying to take its existing billion dollar business in physical books and turn it into two businesses – a billion dollar business in physical books and a billion dollar business in ebooks. The latter is also a hedge against the possibility that physical books become a much smaller market than the current $23.8 billion a year.
The only case in which Amazon would discontinue the Kindle is if it went bankrupt or eBooks died out. The latter is super unlikely to happen. The former is almost as unlikely. If Amazon does go out of business you would be left with a pretty good eReader which you would have to use without WhisperNet and without the Kindle Store. That’s the scenario we’ll look at next.
Kindle without Kindle Store and without WhisperNet
Here we’re considering the case that Amazon has gone bankrupt or killed its Kindle business. You still have your Kindle and you still have your Kindle ebooks (as you were careful enough to save copies on your computer). You are however left without the Kindle Store and without WhisperNet.
Basically, you no longer have Amazon’s store to buy eBooks from and you have no WhisperNet to magically deliver books in 60 seconds.
What would happen?
The lack of a Kindle Store is going to be easily fixed – Companies like B&N and Google will be happy to sell you ebooks without having to buy a new device. They’d probably figure out a firmware update that allows for DRMed ePub. Apple would want you to buy a device of theirs before you could get their ebooks – However, Google is very device-agnostic and B&N is also headed in that direction.
Since this case assumes Amazon has willingly closed down its services or has been forced to it wouldn’t be able to prevent B&N or Google from adding ePub support to the Kindle. In the case that they sell the rights to a completely different company you can be confident that whichever company gets the rights would gladly sell you ebooks.
So you would still be able to get eBooks on your Kindle.
That only leaves WhisperNet. Here, there are two possibilities – First, that a company like B&N steps in and offers you their version of Whispernet. It wouldn’t be very difficult as they’re already doing it for Nook and using AT&T just like Amazon. Second, is that AT&T itself steps in and charges you for wireless access. The latter would be quite painful so you might prefer downloads to your PC from ebook stores instead.
Most ‘Kindle will disappear’ arguments are irrational + There will always be someone willing to step in
The fears that Amazon will die out or Amazon will pass on a billion dollar business that also happens to be the potential future of their billion dollar physical books business are vastly exaggerated. Neither of these is likely to happen in our lifetimes.
Perhaps in 10 or 20 years something happens to Amazon. As we’ve discussed above – we’re still very well covered.
The biggest reason we should all be unconcerned about ‘will Kindle still be around?’ fear mongering is that we’re talking about a $23.8 billion books business. Amazon will be loath to leave ebooks as they might end up being 50% to 75% of this $23.8 billion business. In the rare case that Amazon disappears or leaves the business there will be lots and lots of companies dying to fill the void.
Amazon are very unlikely to disappear from eBooks
If you look around the eReader and eBook landscape you see a lot of companies on shaky ground – B&N suffered a loss and their stock took a hit today, Plastic Logic indefinitely delayed their eReader, and lots of small eReader companies are going bankrupt. There are also a lot of companies that neither need nor care much about books - Apple, Google, etc.
Amazon, however, cares about books – it has to because books are where Amazon got its start and because Amazon has a lot invested in the Kindle. Amazon is also in no risk of going bankrupt – even if the eReader and eBook market grows slowly. Analyst projections for 2014 show Kindle and Kindle Store as just 6% or so of Amazon’s business. That 6% struggling is not going to bankrupt Amazon.
Your Kindle and your Kindle eBooks are very safe – Just keep a backup of your Kindle eBooks and when possible buy from the Kindle Store.
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