Amazon change the game yet again

I bought my first ebook reader – a Sony PRS505 about 4 years ago, and it cost me about $500. Then about two years ago, I bought an Amazon Kindle for about $300. It recently broke and Amazon replaced it for a nominal fee (even though it was out of warranty), with a Kindle worth over $250 (4 months later you can get the same unit for $139).

As of today, for less than $200 you can get a full-colour Kindle, and if that is too much, an entry-level Kindle is just $79, which is the cost of about 5 paperback novels. Here is some quick maths (and I am going to switch to Rands).

  • The entry level Kindle is about R640.
  • A paper-back book in South Africa is about R150.
  • The equivalent ebook on the Kindle is about R80, so for each book you buy and read on the Kindle, you are spending R70 less.
  • So, if you read 10 books on the Kindle you have “saved” R700, which covers the cost of the unit. You have broken even.
  • Anything above 10 books makes it cheaper to read on a Kindle.
  • That is less than a single book per month.

Of course I am ignoring bargin books and book sales etc, but I think the point is quite clear..

Borders books are already closed, who is next? If I was running a regular book store, I would be very very afraid, and I would be finding ways to drastically change my business model. Because this type of price point is going to change everything.

For the record, I probably read about 80% of my books on my Kindle.

2 Responses to Amazon change the game yet again

  • Very nice Craig. Very good analysis.

    But… How about photographic books? Guess those are part of your 20%?

    • Yeah, there will be the “specialist” market, such as photography, coffee table books etc for a long time still. But even then I read many photography books on my iPad,

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