Jan 242010

Early this week, Amazon was so confident that book lovers will enjoy and keep their e-reader or get a refund and keep the Kindle for free.  Let’s expand on that free concept for a minute because everyone likes free stuff.  We all know there is no such thing as a free lunch and that holds true for the e-reader market, but think for a moment the viability of the potential for FREE e-readers!

Let’s assume and explore the idea of a free e-reader.  The e-reader would not have all the fancy features, but will provide the basic functions of e-book reading.  How is it beneficial to the users and how does the vendor make money given the crazy concept?

One possible scenario to offer a free Kindle Gift Certificate to offset the cost of the purchase of the Kindle. This also has the added advantage with making consumers familiar with the Kindle bookstore.

Another possible scenario is subscription/contract based where the users would pay a month service charge and get access to a preset number of e-books (including newspapers and magazines).  Similar to movie rental/cell phone markets, users sign a contract (e.g. 2 years) and pay a monthly service charge with the option for different levels of service (e.g. limited number of e-books each month or buffet style all-you-can-read).

This free concept would be attractive to frequent e-book readers and enticing to some occasional readers.  For book lovers, this is great since they do not have to pay the whole upfront costs (i.e. cost of e-reader) and spread the cost across years. For the e-reader vendor, this is a long investment as the return is based on users paying the monthly service charges and the initial investment (i.e. cost of free e-reader) is recouped later.  Is this the wave of the future for the e-reader market and is this win-win situation viable? Maybe if the authors and publishers get their fair share of the pie too then this free e-reader idea can become reality!

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