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The Kindle Oasis. A strategic review

Posted April 19, 2016 into Science and Tech by John Birmingham

The new Kindle Oasis is a very slick looking piece of kit. It looks like it came from the future, even though we’ve been surrounded by e-readers and tablets for nearly a decade now. It’s also expensive. Really expensive compared to the entry-level Kindles which Amazon supports with advertising. How expensive is the new Kindle, which remains, remember, a single use device? It will cost you more than an iPad Mini 2.

Amazon is infamously secretive about sales figures, algorithms, everything. But I think I can detect a few moving shadows in the dark. For a couple of years now the Beast of Bezos has been downplaying the role and importance of free books. When Amazon first opened the floodgates of self publishing it put the frighteners on the old school publishing houses by flooding the market with hundreds of thousands of free and super cheap books by previously unpublished authors. It started the first self publishing gold rush, which Amazon being Amazon smashed flat couple of years later with a few tweaks to the algorithm.

Without getting into the weeds on the topic, free and even cheap is a lot less important these days. Partly that’s because the e-reader market has matured. The Kindle won. The iPad remains an powerful irritant. Kobo limps along behind them. (Although I do like their waterproof model). The early adapters who bought all of those clunky, early model Kindles also bought dozens, even hundreds of titles each to fill them up. Free and cheap were hugely important in building that market. Now, not so much. E-readers have become a commodity, a loss leader for Amazon. Jeff Bezos has said as much in an interview with the BBC.

As the technology matured, so did the demographic using it. An average Kindle user in 2016 is nothing like the free-seeking binge reader of 2010. They might buy half a dozen titles over the course of a year, making them less price sensitive than somebody downloading more than 100 books in the same period.

I think this latest Kindle, the Oasis, is meant for them.

For myself, however, it raises interesting questions about how much I can ask people to pay for books when I finally start releasing them retail, rather than giving them away. The books I release independently are never going to cost as much as the books I do with my trade publishers. But they’re not all going to be free or super cheap either. I have to be able to pay editors, artists, type setters and so on.

As I said the other day, I’m not just a writer now, I’m a publisher. And I find these questions fascinating.

21 Responses to ‘The Kindle Oasis. A strategic review’

Surtac mumbles...

Posted April 19, 2016

Yep. What I said on the Book of Farce already.

As a reader who has long been intrigued by the mysteries of publishing, I have always found such questions fascinating.

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Therbs reckons...

Posted April 19, 2016

Costs more than an iPad mini? Fuggedaboutit, I'd take the mini every time. The Fire works well enough for me for book reading. And I've found it doesn't crap itself if a few drops of beer are spilt on it.

As for pricing eBooks and based on a quick squiz at Amazon I reckon $10 - $13 range seems to be the range for decent scribbling. Sits about right with me.

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moz is allegedly literate ducks in to say...

Posted April 19, 2016
As it happens I've just bought the Kobo glowaterproof thing, and it's quite excellent. It replaces the previous Kobo, which was not quite drop-resistant enough to last more than 3 years. The previous one had the possible advantage that I could open it up and clone the micro-SD card inside onto a bigger one, revealing that the Kobo library software did not like (very strongly did not like) having 2000+ epub files on board. My current habit is to read and delete, rather than stockpiling books on the device.

Pricing... I dunno, I like the $5/book sort of level and I really like the N-book series for less than $5xN but mostly I really, really dislike two things. One, ebooks that are not available. Stross is particularly bad about this, regularly advertising specials and new releases that "may reach Australia eventually" but never at the advertised price (the one that sticks is two quid becoming $AUS12.99 six months later). Second, books that I can only rent. You seem better about this, but if there's one thing Amazon has taught me, it's that DRM and WiFi-only connectivity are not acceptable. I will load unprotected epubs onto my device via USB or uSD, or I will not buy the device, and if I can't buy unprotected epub, I can't buy.

According to Fictionwise I spent over $US1000 in the three years or so I was allowed to buy from them, at about $US6/book. That seemed fair enough to me. But I suspect it's biased by my subscriptions to Asimov's and F&SF pushing the price per item down (remember when they still sold magazine subscriptions rather than only single issues?).

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Blarkon is gonna tell you...

Posted April 19, 2016
Club Birmo. Nominal fee. "Free" ebooks and short stories whilst member of said club. People that are not members of Club Birmo instead pay retail for same ebooks several months after club members have access. Special newsletter. Signing up gets you a special members only book that is never released to the public. Books could be serialized to ensure a drip feed of material. Would require having some stuff in the stash to start with while you get rolling.

John Birmingham has opinions thus...

Posted April 20, 2016
I've thought about this, but I have to bring the readers to me, or the club. They're already browsing Amazon etc. It could be a plan for the medium term however, once I've settled down the new model.

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JG ducks in to say...

Posted April 19, 2016
I hope the Kindle screens are brighter than they used to be. I was given my sister's old 2011 or 2012 Kindle and it's very dim. Might be a Kindle Touch (grey bezel). Will have to get a clip-on light. Think I could get used to ebooks,but on a nicer ereader.Hopefully, recent Kindles have a built-in backlight and a whiter backgroundwith greater contrast between text and page.
Anyway, my dim Kindle didn't stop me from devouring ten chapters of Cairo yesterday. Ripping, JB.

moz is allegedly literate mumbles...

Posted April 19, 2016
Both my Kobo's go scary bright, and I generally run them at the lowest setting (1%) and wish they'd go lower. I also wish they had a set of red LEDs for reading at night, but mostly just that the brightness scale was properly logarithmic so I could make the thing dim enough. The latest one definitely has a "torch" mode...why anyone would want to point that at their eyes I don't know. But it's e-ink, you could always buy a head torch and read using that.

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Marccarno mutters...

Posted April 19, 2016
Apologies for the above Post from the Cairo thread, for some reason my tablet decided to paste a previous Post when I wanted to add to this thread :-(
Anyway, my quick 10p. I'm minded to say that single use devices were always a marketing tactic and I loved the Kindle when it first came out but..... I'd liken owning a Kindle Oasis to being a person who, in 1995, decided that buying a dedicated word processor was a better deal than buying a Pc. There comes a tipping point where a dedicated device is absolutely redundant in Comparison to a general purpose, multi-use device (ok, there will always be a specialist 1% but that's exactly who they are - and you don't build a mass-market business model on 1%).
As for the trends around eBook pricing, they are far more disturbing and remind me of the mistakes several of the music industry Giants made during the painful Tranformation of the music business model (an ongoing phenomena). So, the emergence of the £9.99 and £12.99 eBook is absolutely farcical - I have even seen eBooks priced higher than their paperback equivalent. Now, I will not be buying general fiction for £12.99 when I know I can get the pulp version for £7.99 - and I speak as someone who does buy approx 100 novels/year and happily pays for them.
So, the music industry got greedy and music is now massively 'free' with pretty much the industry holding on by its spotifying/iTunes-ing fingertips. Almost everyone I know who doesn't have an iDevice just downloads music for free and most of those folks look at me strangely at my "old fashioned" approach of busying everything through iTunes.
Even Amazon may find that if they collaborate with the publishing industry to reset prices higher than mass-public expectations then the so-called eBook paradigm can shift again just as quickly - they should ask Sony/EMI/et-al.

sibeen has opinions thus...

Posted April 20, 2016
<h3 style="transition: all 0.1s ease; font-size: 18px; margin: -4px 0px 0px 40px; font-weight: 400; font-stretch: normal; line-height: normal; color: rgb(51, 51, 51);">Marccarno, you shouldn't be apologising, rather you should be demanding a retraction of the new story; or at least a major fucking editing of the last few pages. It's the only right thing to do.</h3>

I think I'll start a petition, or a hunger strike, or something.

John Birmingham would have you know...

Posted April 20, 2016
S'okay. I've moved it to the appropriate thread.

John Birmingham is gonna tell you...

Posted April 20, 2016
Re, pricing. I've been watching the prices points set by the major publishers for new works. They seem to average out at $12-13 for mass market release, going as high as $24 for the digital equivalent of a new trade paperback format. I just don't see it working. I have a rough rule of thumb for ebooks. One dollar for every ten thousand words, up to a ceiling of... well, I don't know yet. But nowhere near the $12-13. I'd have to offer some very special extras for that.

Slippy reckons...

Posted April 22, 2016
Really? $1 for 10,000 words per download? That's hard graft.
I don't understand this at all, but I think the youtube heroes might offer some evidence about what is happening. They build a base of subscribers who like the antics etc. and then 'somehow' get paid. The part I don't understand is how they get paid and become wealthy.
As for market data, I have all the devices and still mostly read non-work stuff on my iphone 6 5.5. Just to reach into my backpack and pull out the kindle to start reading a novel seems too much effort. Laziness is the key.

John Birmingham reckons...

Posted April 24, 2016
Slippy, $1 for 10K words would be very hard graft if you were only selling those words once. But I sell them many times over.

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Barnesm puts forth...

Posted April 20, 2016

DAMMIT. I finally replaced my first generation kindle, received as a Christmas present back in 2010 then last Christmas I was gifted a brand new Kindle Whitepaper a brilliant piece of reading tech. I think it was based on recommendations I read about it here.

Now there is a new kindle available. I look at the latest model in another six years.

The first e-book I downloaded was a few one. Mellvile's Moby Dick as germane to the discussion a lot of free texts were available for me from the out of copywrite classics which allowed me to have a lot of books I could read on my kindle.

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Lulu mumbles...

Posted April 20, 2016
I did a quick survey (i.e. furtive looking) at the people on my PT trip to work this morning, & there seem to be very few people with either iPads or e-readers. Most people were on their phones (calls, texts, FB, emails, games etc). I only noticed a couple with screens big enough to be iPad/tablet; they were actually outnumbered by people reading dead-tree books.

John Birmingham asserts...

Posted April 20, 2016
That probably explains why my iBooks download stats are unusually high. People are reading on their phones. The numbers are skewed enough that I'm considering giving Apple an exclusivity window on later releases in return for some promo payback.

she_jedi would have you know...

Posted April 20, 2016
Yep, I read on the iPad at home, but now that I have an iPhone 6 the screen is big enough to warrant comfortably reading a book if I'm out and about. I felt like a right knob reading on the iPad in public when I first got it, and when I discovered that I could read on the iPhone 5 without causing an aneurysm I immediately switched to that for public reading.
As well as iBooks I have the Kindle app on the phone and iPad, but iBooks is my preferred reading app. I will upload DRM free books, or buy them through the store. These days I get Kindle books only if Amazon has a particularly attractive discount on a specific book that I'd have to pay full price for in iBooks.

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Surtac is gonna tell you...

Posted April 20, 2016

Just did some data analysis on my Amazon kindle purchases over the last 6 months and thought you might find the data useful.

Out of 52 books, 33 were fiction and 19 non-fiction. Average (mean) price was $7.10, median price was $6.99. Only 14 books were $10 or above and 8 of those were non-fiction.

John Birmingham mutters...

Posted April 20, 2016
Thanks Tac. That is useful.

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Dirk is gonna tell you...

Posted April 20, 2016
Well JB, economics 1 oh 1 time then.
Let's break it up into biteabel chunks:

Cost: add the next items
x editing
x cover design
x type setting
x wear and tear on computers
x travel and research cost
x communication costs
x accountants and legal
x marketing (time on facebook, interviews, banners, site etc.)
x setup costs for next book (investment)

Profit margin:
so your wife and kids don't have to "find other sources of income"

Projected sales:
Divide that by a number of copies you intend to sell and subtract 20%. Take Rome for example as a benchmark.

$ 1000 editing
$ 500 cover design
$ 500 type setting
$ 700 wear and tear and 230V on computers
$ 1000 travel and research cost
$ 500 communication costs
$ 2000 accountants and legal
$ 500 marketing (time on facebook, interviews, banners, site etc.)
$ 1000 setup costs for next book (investment)

Sub total $ 7700 in this example (but you know your actual figures)

Profit margin: so your wife and kids don't have to "find other sources of income"

Let say you publish 3 books a year and want to make $ 50.000 before taxes. So every book has to generate $17.333

So your a book would cost $ 25.000 (7.700 + 17.333).

Let say you want sell 5.000 copies of each book (so the benchmark is 4.000 copies), sell them at $ 6,25 + VAT average and you will break-even.

Sell more and it adds $ 6.25 per book to your income/investment chest for other books. So do serialization/other languages (have that done by publishers though)/print/movie and TV rights. But those are extra's and are extra windfall.

Have a chat though with someone who knows the Aussi tax system. Here in Europe the cost you make for making stuff (including VAT) is tax deductible, and as an entrepreneur you get extra allowances etc.

Dirk is gonna tell you...

Posted April 20, 2016
NB: don't forget about this neither:

won't yield millions but hey, it will bring your gold plated hovercraft a little closer ...

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