Publishing News: Are free Kindles on deck?

Rumors abound ahead of Amazon's press conference, publishers settle with states, and a strategy to survive the "End of Print."

Here are a few stories that caught my attention in the publishing space this week.

Is Amazon ready to give away the Kindle?

Amazon is scheduled to hold a press conference next week, and though, as Reuters reports, Amazon officials have not revealed what will be announced, there are no shortage of Kindle rumors flying about. Adding fuel to the rumor fire, Amazon announced this week that its supply of Kindle Fire devices has run dry.

Leslie Horn at Gizmodo pulled together a rumor roundup, including intel from a Staples executive that “Amazon was prepping ‘five or six’ new tablets,” that 4G might be in the picture, and that the new Fire devices might include a front-facing camera for video chats.

The Verge got its hands on a photo from an anonymous sender who claimed it to be a shot of the next Kindle Fire. The exact model isn’t clear, and one commenter claimed he’d held the new Fire and this was not it. Verge writer Chris Ziegler reports that the photo was confirmed as authentic “and is part of a larger set of images depicting a new Kindle device.”

One of the more interesting speculations has to do with device price. Most analysts and industry writers are conservatively speculating that the price points will remain close to the same as the previous Kindle line, with the (predicted) larger tablet costing a bit more. Farhad Manjoo at Slate has a more bold, insightful prediction on this point (one that I happen to lean toward):

“I wouldn’t be surprised if Amazon drops the entry-level Kindle much lower than $55 — all the way down to free, with a catch. The catch is that you’d have to pay for Amazon’s Prime membership service, which goes for $79 per year. … Amazon will make its Kindle free sooner or later. The only question is whether it will do it now, next year, or the year after that.”

Manjoo’s argument as to how this could make financial sense to Amazon sooner rather than later is compelling. It comes down to what it always comes down to, of course: money. Manjoo points to Amazon’s expansion of its shipping centers to help speed up delivery (some rumors even point to same-day delivery in big cities), and he sums up his theory thusly:

“The cheaper shipping becomes for Amazon, the more profit the company makes on each Prime member. And the more profitable Prime becomes, the more incentive Amazon has to get people to sign up for the service — and, thus, to give away the Kindle.”

Manjoo’s post is this week’s recommended read — you can find it here.

Publishers settle with states for $69 million

There was movement again this week in the ebook lawsuit arena, as Hachette Book Group, HarperCollins, and Simon & Schuster agreed to settle the U.S. states’ antitrust lawsuit. Laura Hazard Owen reports that consumers “in 49 states (all except Minnesota) and five territories” who bought agency-priced books between April 1, 2010, and May 21, 2012, “are set to receive $69 million as the result of a settlement between the states and HarperCollins, Hachette and Simon & Schuster.” Researching payment details, Owen found a report at ABC News in Baltimore that explained how the payouts will work:

“In most cases, consumers may choose to receive the value of their restitution by check or by crediting the amount to future purchases of e-books. E-book retailers Amazon, Barnes & Noble, Apple and Kobo have agreed to identify and contact each eligible customer by email. Retailers Google and Sony will also notify affected customers. Sony will inform customers that checks will automatically be issued. Google customers will be directed to submit a claim on a settlement website.”

Hazard Owen reports the settlement must first be approved by the courts and that payments will commence 30 days after approval.

Practical advice for surviving the “End of Print”

Rex Sorgatz argued this week over at Nieman Journalism Lab that it was all well and good that the New York Times was boasting 530,000 digital subscribers and recently announced that revenues from digital subscriptions has surpassed advertising revenue, but that it’s not even close to good enough to save them at the end of the day, or “The End of Print.” Sorgatz writes that the newspaper “needs at least 2 or 3 million digital subscribers to survive a post-print, post-advertising world” and suggests a solution: memberships.

Sorgatz lays out seven criteria to guide a membership strategy, which he says “has to be cool (marketing) and it has to create value (product)” to succeed. Criteria include offering discounts through the membership, but make them good — Sorgatz notes the Times digital subscription is $200 per year, “so [discounts] needs to show value.” He also suggests offering subscribers access to exclusive Times events (and wonders why TimesTalks hasn’t been marketed well enough to be as big at TEDTalks), and making the subscription platform as interesting and diverse as Amazon’s Prime subscription offerings. Summarizing his advice, he writes:

“… transform the digital subscription into a real-world membership; push every new product into a new membership program; incessantly incentivize people to become members; constantly illustrate value so people recommend membership to their friends; make it a platform; and bundle, bundle, bundle.”

Much of what Sorgatz suggests is directly relevant to book publishing as well, and might spur some inspiration for forward-thinking publishers. It’s well worth the read.

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