Why is Amazon trying to charge Kindle users up to $2 a month to read a single blog?
We’ve been stumped by this proposition since yesterday, when Jeff Bezos rolled out his much-hyped e-reader. The Kindle plan makes even less sense than most online subscription businesses, since the Kindle comes with a built-in web browser that lets you read any blog you want, free of charge.
Now Fred Wilson explains Amazon’s thinking at his A VC blog, by relaying part of a email conversation he had earlier this year with a rep from Federated Media. FM sells space on his blog, and apparently worked with Amazon to put the subscription blog offering together; here the FM rep explains the logic behind the service.
It seems like the company is planning to charge the reader for the subscription whether you charge them or not, because, in part, they have to cover the costs of distributing the content wirelessly.
Fred passed on the chance to sell his blog via Kindle, by the way, and thinks the entire concept of dedicated e-readers are stupid. More on that in a bit.
For now, though, let’s marvel at Amazon’s thinking here…
Jeff Bezos wants consumers to change their media consumption habits (by reading digital books instead of paper ones) and make an investment in doing so (by buying his e-reader). The best way to do that would be to make e-book titles a fraction of the cost of paper books, but Bezos doesn’t want to or can’t do that. Instead, he adds a free wireless feature to his device, which makes it a potentially interesting gizmo. But then he tries to pay for it by charging for content that’s free everywhere else.
Are you dizzy yet?
If we weren’t talking about Amazon but a second-tier consumer electronics company, or a wireless carrier, or a big media conglomerate, this kind of tortured logic would be less striking. Indeed, the phone companies and the record labels have conspired in just this kind of thinking — we’d like you to buy something you’ve shown no interest in paying for, and we’re going to charge you a premium to help us defray our costs — to justify selling songs for twice the price of Apple’s iTunes downloads. They insist this will work, one day.
But Amazon (AMZN) is supposed to be a special company. It defined e-commerce by consistently giving customers what they wanted, at the right price. No one ever had to explain the benefits of Amazon.com to customers — the first time you went to the website and bought something, you got it immediately. The Kindle is hard enough sell as it is. No sense in making it harder with preposterous subscription blogs.
[Hat tip to reader SAI Reader Hank Williams for sussing out Amazon’s thought process yesterday]