Amazon Bites Hand That Fed it

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
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Amazon Bites Hand That Fed it

At a certain point Microsoft went from being the small friendly corner store computer company to an awe-inspiring hulking behemoth that crushed virtually any company in any market it wanted. Thousands of PC utility and other vendors have been put out to pasture as Microsoft decided their markets would be good add-ons to the operating system business.

I wonder if we aren't about to see the same thing happening with Amazon. The company recently announced that any blogger can now have their content sold on the Kindle and get paid in the process. The two sticking points are Amazon sets the price and also has the ability to relicense the content on any digital device it pleases.

In addition, the company gets 70% of the revenue generated from the blog (or other content for that matter) and the publisher gets the remaining 30%.

So publishers should be happy as Amazon is touting the Kindle as the savior of publishing, right? Well, the company just may be right and although I predicted no one wanted the original Kindle, later generations of this electronic reader have developed a nice following.

I am also on record as saying people won't pay for content and I still believe this to be the case. I proved the New York Times wrong (I was off by 6 months) and it be worth watching to see if I prove Rupert Murdoch wrong. There will be exceptions such as financial news which helps in investment decisions and niche areas such as comparison sites like consumerreports.org and the medical and pharmaceutical industries, etc. But by in large, consumers expect content to be free and every day they expect it to be even more easily accessed. The Kindle's model is the opposite of the logical future of content.

So on the one hand one has to applaud Amazon for thinking they own the future of the publishing market and can charge through the nose because they are in control. But as far as I am concerned, I will be happy to read blogs on mobile devices for free. I am certainly not alone. I am sure at some point I may get a Kindle to try but just how many devices do I really want to carry around? It seems the netbook/laptop in the Kindle killer and as soon as carriers get serious about setting very competitive pricing plans on netbooks, we will likely see Kindle interest subside dramatically.

What is perhaps the most ironic about the situation is the iPhone is a great alternative to the Kindle for shorter documents such as blog entries and this from Apple/AT&T who have created a fairly restrictive platform where applications and even technologies such as VoIP and Slingbox need approval.

I bet this is the exact reason Verizon is following AT&T into the netbook market with ultra-cheap hardware.

But if Amazon wins out and the Kindle becomes the platform of the future I believe the outrageous percentages they are demanding and draconian licensing rights will push the media to slam the company so hard that the PR damage alone will offset any revenue made by this new media relationship. These are of course the same media companies that helped Amazon build its brand from scrappy upstart ten years ago to what many see as corporate media bully today.



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