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 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!