
Free Kindle This November - kgarten
http://www.kk.org/thetechnium/archives/2011/02/free_kindle_thi.php
======
joshkaufman
A classic loss leader strategy. Given how much Amazon Prime increases Amazon
purchase behavior, this makes all sorts of sense if the cost per unit goes
down enough.

Details about how Amazon Prime affects purchasing behavior:
[http://www.quora.com/Who-invented-Amazon-Prime-What-
impact-h...](http://www.quora.com/Who-invented-Amazon-Prime-What-impact-has-
Amazon-Prime-had-on-purchase-frequency-at-Amazon)

~~~
kjhghj
Plus with another few million kindles out there you approach some newspapers
about a special kindle subscription deal

~~~
jonknee
Amazon already has Kindle subscriptions for a lot of newspapers. Not just ones
with national appeal like the New York Times, but ones like the Atlanta
Journal Constitution, St. Petersburg Times, and San Jose Mercury News. Overall
they have 160 papers worldwide, with 97 of those in the US.

<http://amzn.to/fVMoIU>

------
Nogwater
By this logic, Amazon will pay you to take a Kindle by the start of next year.

Amazon makes future money on Kindle owners because they're avid book readers
and they buy a lot of eBooks. If Amazon were to give away Kindles for free a
lot of non-avid readers would pick them up just to have one, which would kill
the model. I think a $99 price point (maybe $49 with Prime) makes a lot more
sense.

~~~
reedlaw
I own a Kindle but rarely buy Kindle books from Amazon. There is plenty of
high-quality free content as well as eBooks from other publishers like
Pragmatic Press.

~~~
Roritharr
Thats my major concern here, i recently bought the Cracked.com Kindle Book and
was astonished how amazingly bad the Kindle Version is in comparison to the
real one. The included images were pixelated to the point of beeing
unrecognizable and the text seemed to be not really formatted for my device.

And thats considering i paid 4$ more than the real one would have cost... so
until they produce more quality in these things i stick to Project Gutenberg
and read the classics.

------
dholowiski
The other possibility is a 99 or 59 dollar kindle the comes with a 99 or 59
dollar amazon credit. I'm hoping for that one, since amazon prime isn't
available in Canada :(

~~~
z23z23z23
Wow, even I might actually "buy" a few bits under such a scheme.

------
6ren
Makes sense. Like game consoles, they make the money on the content.

But, unlike consoles, provided a kindle doesn't need the latest, fastest
technology, they can keep getting cheaper, til it's negligible relative to the
benefits of acquiring a customer.

~~~
0xEA
To note, they don't care to make money on the device, thats why you can read
your kindle books on Android, iPhone, PC, etc.

~~~
tommi
It's not they don't care to make money on the device directly, it's just they
don't know how to.

~~~
ajaimk
Making money on the device directly is simple: You charge more for it. Keeping
in mind that Amazon makes a pretty good margin on the content it sells with
negligible infrastructure requirements (the kindle infrastructure would be
negligible compared to the rest of Amazon.com + AWS), they don't need to make
money on the device itself.

The company that uses the revenue model of making money of the device and
selling the content for a negligible profit is Apple. That's how they run the
iPod department for one. Devices are sold at a high margin but almost all the
revenue for itunes sales go to the content providers.

~~~
tommi
Exactly my point, Amazon makes money on the content.

If it was viable to charge more money for the device, I'm sure they would but
they need those (or some other) devices in people's hands. Therefore, they
can't charge more for the device. That is my point, they don't know how to
make more money with it without totally changing their strategy.

~~~
herval
which in other words means exactly "they don't WANT TO make money on the
device"

------
pauldix
The use of the graph is ridiculous in this post. If the author wants to
predict a free Kindle in the near future and back it up with some one line
quote from Bezos, fine. However, that graph is pointless. I can craft
countless other curves to those four points that are just as "predictive" as
that one yet would predict vastly different prices. Further, if that graph was
correct, Amazon would start paying us to take Kindles soon after. Just keep
following that time axis!

Fitting points to a time line and drawing it out to infinity is a pointless
and erroneous predictor. Read Proofinesss by Seife. He talks about these and
other mistakes made by people trying to back up their arguments with error
prone data and approaches.

~~~
Homunculiheaded
At least my reading of this was that the author was obviously just having fun
with the idea that "Hey from just 4 points of data we can extract that the
kindle will be free in nov 2011", however Jeff Bezos' reaction of "Oh you
noticed", even if also somewhat in jest, was interesting enough for the author
to ask in what ways would a free kindle be possible.

Even if Arrington's idea is a year and not a week old it certainly would seem
to make sense, especially with Amazon adding free video to free 2day shipping
with Prime.

------
haberman
Danger of extrapolation: <http://xkcd.com/605/>

------
molecule
lol

"last week" == Feb 2010?

"But last week Michael Arrignton at TechCruch reported..."

[http://techcrunch.com/2010/02/12/amazon-wants-to-give-a-
free...](http://techcrunch.com/2010/02/12/amazon-wants-to-give-a-free-kindle-
to-all-amazon-prime-subscribers/)

------
Derbasti
Did you know that two-day shipping is Amazons' default mode of operation in
Germany and Amazon Prime gets you overnight shipping there? Can't buy German
Kindle books yet, though.

(I guess this is true for other 'small' countries, too)

~~~
pyre
Why does Amazon Prime exist in Germany, but not Canada? Heh. I knew it existed
in the US and not Canada, so I assumed that most of Amazon's "cool stuff" was
just US-only.

~~~
dangrossman
Canada's 28 times bigger than Germany. I would expect the cost to ship
something across Canada is much higher than the cost to ship something across
Germany.

~~~
Titanous
This may be true in some of the rural areas, but to Ottawa, the free shipping
takes 1-2 days.

------
barredo
Let's say:

Free 3G-Kindle for a 30$/12 months contract that includes 2 books a month and
a newspaper subscription. Seems a pretty good deal to me.

180$ for the Kindle at current price, 100$ for royalties to publishers and
Amazon will keep 80$ and the money extra the user spends on buying extra
books.

------
nhangen
Prime is already amazing, but this would just blow minds to pieces.

------
mhb
A problem with this is that he is using two different Kindles in the graph -
WiFi-only and cell. _The Kindle 3 is available in two versions. One of these,
the Kindle Wi-Fi, is initially priced at US$139 / GB£111, and connects to the
Internet exclusively via public or private Wi-Fi networks. The other version,
considered a replacement to the Kindle 2, is priced at US$189_ [1]

So the price of the comparable Kindle today is $189 although the graph
predicts $100.

[1] <http://en.wikipedia.org/wiki/Amazon_Kindle>

------
callmeed
This is a great example of something that has perplexed me for a long time in
my own businesses:

How do you drastically lower the price of something (or make it free) without
pissing off all the previous customers?

------
mckoss
Amazon has a lot of latitude in setting the price of a Kindle. That is because
the device is essentially only useful when purchasing content from Amazon.
They should lower the price if it would increase demand for their content.

If it weren't for the fact that many users wouldn't use a FREE Kindle, they
probably should give Kindles away. Buy 10 eBooks and get a Kindle free would
be a good strategy.

------
latj
This is a serious question:

Why do we need Amazon anymore?

If anyone can write a book and make an ebook and accept payment and distribute
the book... why do you need an amazon?

Could I buy a reader for $500, pay $5 for ebooks, and the author and publisher
still make more money?

It seems like giving away the reader for free with a proprietary format is
just an attempt to lock in readers and create need for a service that isnt
really needed.

~~~
sudont
It’s a brand-name on the consumer’s end. Meaning that the lay person will not
only be searching their content library, they’ll also be more familiar and
trusting for buying if it’s through Amazon.

By creating a reader for their content library, they’re actually providing a
different service than just books: ease of use. The consumer doesn’t have to
worry about seeking out the book, trying to figure out if it’ll run on their
device (Yes, this can be screwed up), trying to buy it, and then trying to
locate the file to install it.

------
reedlaw
I remember the predictions of a $99 Kindle for Christmas 2010.

~~~
burgerbrain
Only 40USD off. That's what, 2 pizzas and sixpack? Pretty damn close if you
ask me.

~~~
baddox
It's also 40% off.

~~~
burgerbrain
Alternatively: The kindle 2 was what, 300USD? I think that's about what it
sold for the majority of the time it was released.

So a reduction from 300 to 100 is 66% off, while a reduction from 300 to 140
is a little bit over 50% off. If your guess is 66% off and actual is on the
high end of 50%, that's not a bad guess in my book.

------
dlevine
I didn't have Prime until very recently. My rationale was that I pretty much
always got free shipping anyways (Super Saver is free if you purchase more
than $25 at a time, which isn't hard, and I don't care about the delivery
date).

However, the free movie streaming actually convinced me to sign up for Prime
(comparably priced to Netflix streaming, plus I get free two day shipping on
all my Amazon purchases). I think that Amazon could potentially get a lot of
new people to buy prime if they give away a free Kindle, which would probably
be a net win for them.

------
juiceandjuice
Everything looks linear until you zoom out and find out it's exponential.

------
sliverstorm
Kind of the ultimate blow to the iPad and iBook. Even if the iPad has color
and is backlit, just how many people will choose a $600 book reader over a $0
book reader that's 'almost' as good?

~~~
mcav
Those who want a device that can be used for more than just reading books.

~~~
sliverstorm
Of course. I was speaking in regards to the folks who try to sell the iPad as
a better book reader. I don't doubt the iPad will continue to sell.

~~~
officemonkey
But the iPad _isn't_ a better book reader. Electronic paper reads much better
in sunlight. I did a side-by-side comparison with the iPad and the Kindle and
I much preferred to read on the Kindle.

~~~
sliverstorm
I prefer the Kindle as well, but some people think that a color screen is a
very important feature on a book reader.

(Don't ask me)

~~~
true_religion
Color is important when it comes to newspapers and magazines, but most books
that adults read don't have pictures--much less color pictures.

------
z23z23z23
I bought a $139 Kindle. Immediately de-linked it from my Amazon account and I
manage it with Calibre. Fully loaded with tons of pirated MOBIs and PDFs.

To make matters worse, I bought one of the hard covers from a Best Buy which
caused power shorts, then I called Amazon and got a replacement with a light
from Amazon for free. Then I returned the lightless hardcover back w/receipt
back to Best Buy. I wasn't trying to get a $60 cover for free, but this method
works, no social engineering even required.

Loss leader indeed.

------
jrockway
This chart is bullshit. The cheapest Kindle is $139, not $189, and became
available at the same time the $189 Kindle did.

I guess that actual data ruins the beautiful line?

~~~
elai
So the 3g will be free a bit later.

------
Pyrodogg
The thing I hate about kindle (hardware) being a loss leader is that it
requires Amazon to keep it locked down so that you can ONLY buy content
through them.

I'd rather pay for it up-front and actually have an open e-book market on the
back end. As opposed to having to root/jailbreak it and/or go through painful
file conversion processes to read other e-books.

~~~
msbarnett
It isn't locked down at all. You can read ebooks from o'reilly, baen,
pragprog, and many other non-Amazon stores on it right out of the box.

It simply doesn't implement competing DRM schemes.

~~~
moultano
EPUB is not a competing DRM scheme. It's the standard for virtually every
other reader and store, and the kindle doesn't support it.

~~~
msbarnett
Which is a completely separate issue from the claim that the kindle is a
locked down device that can only view content bought from Amazon.

In my experience, every DRM-free ebook store I've dealt with has been happy to
sell me a .mobi.

~~~
moultano
Still, the reason they doesn't support epub is most likely because it would
make it easier to get books from sources other than amazon. The OP was finding
it regretable that they have the motivation to do things like this.

------
drawkbox
This is exciting for many reasons but one being educational systems may
finally start adopting the digital tablet.

~~~
jrwoodruff
Studies have shown the kindle is not robust enough for most classroom
settings. Lack of note taking, slow page turning, etc. slowed down classes and
caused students to eventually print out assignments:

[http://seattletimes.nwsource.com/html/businesstechnology/201...](http://seattletimes.nwsource.com/html/businesstechnology/2011938870_kindle24.html)

[http://www.fastcompany.com/1727292/apple-ipad-officially-
pas...](http://www.fastcompany.com/1727292/apple-ipad-officially-passes-the-
higher-eduction-test-exclusive)

~~~
drawkbox
I pretty much agree with that and prefer my iPad for those types of things.
But the Kindle will evolve and just the thought of getting away from the
textbook fix would be nice.

If Amazon Kindles were starting to appear in schools, iPads and Apple would be
right there. Apple has always been good about getting computers into schools.

The textbook industry got so crazy that most kids have TWO of each now because
they need them for school and home, because the 5-6 2 inch thick books of
outdated materials are too heavy. So what is more kludgey and when could you
ever really write in books themselves? I never wrote in textbooks even though
I bought them and never took the time to sell them. Can't people take notes
outside the book?

Plus if you have Kindle accounts/books you can also pull these on other
devices (maybe now) and especially laptops and PCs.

~~~
jrwoodruff
That is a good point about the note-taking. I was thinking in context of
higher ed, but high school/middle school... maybe it would work.

Although I will say I do remember kids taking notes in pencil in the margins.

Also - two textbooks? seriously? I can't imagine any school springing for that
added expense, or even parents for that matter.

~~~
drawkbox
Part of the two textbook thing is related to not giving students lockers at
some schools nowadays.

I can't imagine the cost/waste of all those textbooks and how silly it will
look when we look back on how we do it now.

------
zandorg
Yeah, but a DX is still going to cost the earth AND be taxed by customs for UK
buyers!

------
ctdonath
Notice that Kindle apps (iOS etc.) are free. They're not charging for the
reader.

To win the ebook market big time they WILL have to win the reader market,
which will amortize to giving away free readers.

------
gcheong
How does paying $80/year make something "free"?

~~~
jerf
There are a number of ways to get Prime for essentially-free or even straight-
up free. Students can get it free for a year [1], and Amazon Mom [2] provides
it essentially free for parents of young children. You have to buy $25/month
of qualifying goods, but we have not found this to be a challenge if you're
still on diapers. (And Amazon is quite competitive on diapers.) YMMV.

It seems to me that Amazon is desperate for you to have Prime, but as what is
basically a loyalty program, it doesn't work for them if they simply give it
away. The customer has to feel engaged somehow, either by paying for it, or
feeling like they're getting something really valuable for some promotional
reason. I personally suspect that as the Amazon Mom's year ends or the
student's year comes up that the announcement will be made that out of the
goodness of their heart, Amazon has decided to simply extend the program for
another year or something, and that as they can work out reasonable excuses to
give you a free Prime subscription they will continue to do so. Just my best
guess based on the business situation.

[1]: <http://www.amazon.com/gp/student/signup/info>

[2]: <http://www.amazon.com/gp/mom/signup/welcome>

~~~
qcassidy
Note that Amazon's new free movie/TV-streaming service for Prime members isn't
available to Amazon Student or Amazon Mom customers unless they pony up the
annual $79 fee:

[https://www.amazon.com/gp/help/customer/display.html/ref=hp_...](https://www.amazon.com/gp/help/customer/display.html/ref=hp_primeland_primeinstantvideo?nodeId=200572880)

So students and moms probably won't get Kindles for "essentially-free or even
straight-up free."

~~~
catshirt
unsure the circumstances, but i just got one free year as it was offered
during checkout, and days after the announcement i was sent an email saying i
can watch streaming videos.

------
loie
also interesting is that we're at the end of February, right where the line
crosses $100...

------
InquilineKea
Do Amazon Student members count?

------
kloncks
What I don't like about this is the following:

Amazon Prime isn't available everywhere.

What about the International markets? Or is this just a US thing?

------
nazgulnarsil
this is what happens when idiots discover graphs for the first time.

------
u48998
Even though Amazon is not a wholesaler like Sam's or Costco, but I won't mind
getting movies at $35 per year. $79 is too much an yearly renewal for what
appears to be just a guaranteed free delivery.

~~~
philwelch
$79/yr is $6.60/mo, which is less than Netflix's streaming-only plan and
includes free 2-day shipping on Amazon products.

~~~
w1ntermute
Prime is great if you're going to use the free 2-day shipping feature, but
Amazon streaming is horrible IIRC. It uses Flash, and I'm guessing doesn't
have the selection Netflix does.

~~~
bricestacey
Amazon has recent movies, though. For example, I watched District 9 through
Amazon On Demand in Jan/Feb 2010. That's 5-6 months after it was released.

Most Netflix Streaming titles are something you'd find on VHS in your mom's
basement.

~~~
officemonkey
Since they're partnered with "Starz Play", Netflix gets a quite a few new
pretty quickly.

BTW, most Amazon streaming titles are something you'd find on VHS in your
mom's basement. I just checked and the first movie they tempted me with was
"Contact" from _1997_.

~~~
true_religion
Yep, they're even streaming TV shows as they come out like Spartacus.

------
achompas
Lazy. Fit a line and assume the Kindle will continue down the line? This is
what counts for expert analysis on HN?

The cost of producing a Kindle is much greater than $0 right now. Consider if
that cost (plus the net revenue of a few books) would ever hit $0. Do you guys
seriously see a sustainable revenue model here? How about a winning e-book
strategy?

