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.

  • David Hakala, Denver, CO
    May 14, 2009 at 12:40 pm

    Tehrani, do you pay free lance writers 30 per cent of what you earn from their work?
    If people aren’t going to pay for content then there’s no money for you to get all indignant about, is there?

  • Rich Tehrani
    May 14, 2009 at 6:02 pm

    Not sure I am thrilled with the tone of this comment but i will move beyond that because your question is valid.
    Sometimes they get 30% and sometimes less and sometimes more.It depends on how advertising sales are at the time. If there are no ads the freelancer still gets paid the agreed amount.
    Your final point is very valid — and occurred to me — this is exactly the reason I mention “But if Amazon wins out and the Kindle becomes the platform of the future” towards the end of the article.
    Most likely this won’t happen IMHO but I am willing to wager Amazon will lose its status as a semi-media darling going forward.

  • Peter Radizeski
    May 14, 2009 at 6:27 pm

    One thing to keep in mind, book authors make $1 off a hard cover that costs $25. That’s 4%. Authors don’t bitch. So 30% is a great deal to this blog author. (In many cases, that 30% will be zero).

  • Jon Arnold
    May 15, 2009 at 11:45 am

    Nice post, Rich – and good comments too. My blog has been available on Kindle for a few months, so this is of particular interest. I just posted my thoughts, fyi… http://www.ipcom-insights.com/blog/jon/2009/05/amazon-kindle-can-blogs-and-money-mix.aspx

  • Rich Tehrani
    May 16, 2009 at 6:53 pm

    Jon, thanks for the comment — so I am in a pickle right? Can I ever post my blog on the Kindle? Will they let me now? Let me know if the revenue makes it worth the effort and i will start apologizing to Jeff Bezos. 😉

  • Noureen
    August 25, 2009 at 10:15 am

    I agree with you. Why would I pay for a blogger content when I can get it free online with a bit of a search. That is stupid in many sence, but we do live in stupid world as we know it.

  • rey
    August 25, 2009 at 10:21 am

    I have seen many blogger sites, and honestly I have never seen one that is worth paying for it, but that is just me.

  • Ben
    September 5, 2009 at 2:15 am

    I don’t think I will every pay for any blogger. If they were good enough, they could of write a novel. Since they can only blog, then is just a blog.

  • Joshan
    September 5, 2009 at 6:15 pm

    I would never pay for anything that blogger would write.

  • Sherri
    October 21, 2009 at 1:23 am

    If blogging pays more than what I do, then I will become a blogger.

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