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A Kindle New Year

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I've got good news. Publishers, fear not, there's a bright new digital future on the horizon. And I've got proof. Of course, the future isn't without its complexities and there's a balance of power-shifting that will have new winners and losers. But, the good news is that the long term future of digital content is going to see a significant increase in the opportunity to generate both subscription and advertising revenue.

Here's the proof.

It was just days before the Holidays and I took a bit of an educated guess and purchased a Kindle e-reader for my wife as a gift. She's been an avid reader all of her life, but the various demands of work, life, family, have meant that she's not been reading as much as she used to. We were on our way to a week at the beach and I thought that a Kindle might be the perfect device for beach reading.

While I'm pleased to report that I was right - I learned far more about the future of digital publishing in those seven days that I could have possibly imagined.

Here's just a few observations -

Behaviors.

My experience is that new hardware is either 'gettable' or not. Folks either braile their way around, figure it out, and find themselves comfortable and connected quickly or the device fails. The Kindle wins. My wife, and in short order both my sons, were using the Kindle with ease. They were browsing, reading, and then quickly wanting to purchase more books, newspapers and digital content.

Engagement.

There's absolutely no doubt from my quick family focus group that the Kindle will encourage the sale of digital content. My wife was both amused and then taken with the 'recommendation' features. My younger son searched for one of his favorite authors and found a book he hadn't read. My older son (college age) was exploring the annotation features and thinking about how much he wished his text books were on a Kindle-like device.

Recommendations:

One of the questions everyone asks about digital content is "how will you find it?" Yet anyone who's walked the shelves in Barnes and Noble or Borders knows that the sheer volume of content makes finding the right book a frustrating experience. Clearly Amazon has the volume of content, the behavior of its registered members, and the ability to start to make meaningful recommendations and digital offers (buy more than one book by the same author at the same time and get an XX% discount), and frequency buyer discounts.

As I said at the outset, this is good news. There's clearly an increased appetite for digital content when you put both the reader and the recommendation tools in the hands of users. A working mother, a middle-school child, a college sophomore are all ready and excited to consume more digital text on the Kindle. And there's no discussion of 'free' here, because Kindle is at least as far as our group dug in a paid offering.

That's the good news. The next question is how will content, and in particular magazine and newspaper content, differ from current pages in print as we move to a digital future? There are two very good demos of what a digital magazine might look and feel like that are worth exploration. There's the Sports Illustrated e-magazine demo here and there's a very innovative Bonnier magazine demo here, and then there's a cool looking $75 Tablet in the works from One Laptop Per Child here

What you can begin to see is a coming together of devices, consumer demand, and a design aesthetic that feels like it's coming together. When you add location-based advertising you can imagine an almost holy grail of duel-revenue streams; both subscription and advertising. And location based information means that a reader of the New York Times on the beach in Mexico could be seeing local ads, and ads from 'back home' (since the device knows both where you 'are' and where you live).

So, why isn't this simply good news for content creators and publishers?

Well, of course there's a power shift. While publishers own their own printing presses and therefore control their means of production, the idea that Amazon owns both the device and the billing mechanism threatens to shift the base of power from from publishers to platforms. Much as the music industry both appreciates the mechanism of iTunes and is frustrated by Apple's ability to set industry-wide pricing, publishers fear that Amazon will do the same thing - driving down the price of content and setting a less than favorable revenue split with content creators. These aren't entirely unreasonable concerns, if it turns out that Amazon can control a large percentage of the portable publishing industry. But those concerns not withstanding, there is an emerging portable publishing industry on the horizon. Devices, Revenue, Advertising and form factors that all suggest a future where people are buying more content.

When magazine and book publishers talk about a bright future - they imagine a world in which the cost of manufacturing, shipping, returns, and the other costs of the physical world decrease dramatically. At the same time customers have become accustomed paying for content in a series of micro payments and subscriptions.

Digital publishing. What difference does it make? My wife read six books while she was on vacation. And she totally enjoyed the experience.

Next up - the Apple iSlate tablet coming soon... and then, let the games begin!