Thursday, May 7, 2009
Jeff, Use Kindle To Own The Daily Habit
By Dave Morgan
Yesterday, as anticipated, Amazon's Jeff Bezos announced the debut of the large-screen Kindle, the Kindle DX. The print media industry has been watching this one closely because, unlike earlier versions of the Kindle which work best with small format books, the new larger screen Kindle DX has a very large reading surface and is positioned as a digital device suitable to read textbooks, newspapers and memoranda on. Wow! Finally, we have a savior for the newspaper, magazine and educational book publishing industries that are saddled with massive legacy cost structures built around "ink on dead tree" production and distribution? Or not?
This is where the real money is. It's not in subscriptions, though they are nice to have as well. Google does more than $20 billion annually in text ad sales (you should know, you buy a lot of them); you could take 25+% of that over time if Kindle users had a daily habit.
Jeff, Google has regulators nipping at their heels and most content publishers don't trust them. Make the enemy of your enemy your friend. Focus on the secondary and tertiary monetization opportunities with the Kindle, not just the sale of the device itself or the sale of subscriptions.
Years ago you took a lot of heat from investors for spending billions of dollars for warehouses and distribution logistics. You were focused on building value for the long term. You were right in that case. The idea of building up the Kindle and your network as a long-term platform play is staring you in the face, but you need content to make the Kindle a daily habit. Focus there, attract lots of high-quality daily content -- and you will have it, and all of the spoils that come with it.
Readers, what do you think Jeff should do with the Kindle DX?
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Dave Morgan is the CEO of Simulmedia. Previously, he founded and ran both TACODA and Real Media.
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