Freegans: Why the Kindle won’t be free
The current rumors about a free Kindle are still going around (I was hoping they would have died faster than this), with CNet getting into the fray yesterday.
But the good thing about the rumors still being around is that I came up with another argument about why it won’t happen:
Michael Tamblyn of Kobo Books gave a presentation at the O’Reilly TOC conference a few weeks back. I just came across the slides for his presentation a few days ago and it turns out Kobo have been doing some serious analysis on their customer data.
They’ve broken their customers down into 4 broad groups, and there’s one in particular that is relevant to this discussion. (You can find the slides at the end of the post.)
Freegans are a type of customer that don’t buy ebooks – ever. They read the ebooks on the Kobo website or use one of the free apps, and they only download free ebooks. Most will have 9 or more free ebooks in their library.
Before anyone at Kobo gets upset, let me add that I’ve thinned the data down a lot. But that does not change my point. Kobo have solid data that shows some customers won’t buy ebooks.
Even if you give them a free ereader, they still won’t give you any money. This customer will only go for stuff that’s free. If the Kindle is free, I believe virtually all freegans will get one. Then Amazon will be out the nominal $139 with no hope of recovering the cost.
I know everyone is in love with the idea of a free Kindle, but I really don’t see how it’s going to happen.
fjtorres March 9, 2011 um 9:46 am
Kobo’s finding is hardly unique or limited to ebooks.
Freeloaders can be found in every business; the only thing that varies is tactics.
Amazon has long been aware of the breed and they have policies in place to deal with them.
And it is hardly a shock that Kindles don’t easily work with library ebooks; they’d rather those folks buy Sony. 😉
My take is that any "free" Kindles will be bait for very strong strings; most likely a Kindle book club contract of some kind.
Mike Cane March 9, 2011 um 10:40 am
>>>Amazon has long been aware of the breed and they have policies in place to deal with them.
What do you mean by that?
fjtorres March 9, 2011 um 1:06 pm
Amazon tracks customer returns and complaints. They have been known to ban serial returners from their online stores.
Amazon fully understands that some customers are best left to their competitors and a bit of bad press is preferable to keeping their "business".
Mike Cane March 10, 2011 um 7:00 am
Ah, thought you meant eBooks, not print.
stef March 9, 2011 um 10:00 am
it’s certainly a nice thing to think about, but I never thought that it would happen. Unless Amazon sets aside a different sort of Kindle to give away for free (perhaps a very basic model, but then it seems more like a waste of resources).
karen wester newton March 9, 2011 um 10:00 am
I figured if a Kindle was ever "free" it would only be like a cell phone is "free." That is, Amazon might give you one but only if you pre-pay some amount, sort of like Amazon Super-Prime. Either that, or you pay for $300 for the Kindle and it comes with $300 gift card, good only for Kindle books.
Martin March 9, 2011 um 10:41 am
Amazon has been promoting free Apps for other devices. You can become a 'Kindle' user for free if you have a netbook… or an iPad… or an iPhone… or an Android phone… or a Blackberry
Getting new people to set up an Amazon account must be worth more than $139 on average despite the freegans.
Nate the great March 9, 2011 um 11:13 am
Why "must"? You’re jumping to a conclusion that’s not supported by the data.
Mike Cane March 9, 2011 um 10:43 am
Yeah, I went at Tamblyn on Twitter for labeling me a freegan.
I have several HUNDRED free Kindle books. Why not? They offered them! And I didn’t even take ALL of them, just the ones I was at least likely to *sample* so I could consider reading them.
And the word being left out in regard to my own "freeganism" is yet — I haven’t bought *yet*.
Chris Meadows March 9, 2011 um 11:34 am
This seems like slightly sloppy thinking, Nate. By that logic, nobody should ever give ANYTHING away for free on a promotional basis, because SOME people won’t bite on the promotion. No Baen Free Library, no free Kindle e-books, etc. And don’t we use that same argument to point out how media companies are overreacting to piracy? Not every downloaded copy represents a lost sale because a lot of people wouldn’t have bought it anyway?
The calculus isn’t whether every single person given a Kindle would buy enough to make giving that person a Kindle worthwhile, it’s whether the ones who buy more than average would buy enough to make it worth giving one to EVERYONE.
And they can’t necessarily tell who would be one of those greater-than-average buyers before they put a Kindle in their hands. (They can probably take a pretty good guess, but there will always be outliers in either direction.)
Nate the great March 9, 2011 um 11:43 am
The Baen free Library doesn’t cost Baen $139 per ebook downloaded, so that’s not an apt comparison. The actually cost of free ebooks is minimal; the same cannot be said for hardware.
fjtorres March 9, 2011 um 1:13 pm
Baen makes it clear they consider the Free Library and the Fifth Imperium CDs as marketting tools to promote the *writers*.
Given their business model those ebooks are more like auto dealer test drives; looking to sell you on a long term commitment.
And, yes; they incur no aditional cost from giving those away.
Kindle ereaders, on the other hand, cost Amazon on the order of $80 each.
A whole different proposition.
Nate the great March 9, 2011 um 12:12 pm
Here’s another way to look at it. You think Amazon should give away the expensive in order to get customers to buy the cheap. That doesn’t make any sense, and it’s supposed to work the other way around.
Chris Meadows March 9, 2011 um 11:38 am
And if they give them to Prime subscribers, they’ve already cut out a lot of "freegans", given that they’re talking about people who’ve already elected to pay eighty bucks just to get the stuff they order faster.
yuzutea March 9, 2011 um 4:05 pm
Complete agreement, although to be fair, the articles don’t really posit truly free kindles, but instead talk mainly about Prime subscribers getting them for free, or possible subscription deals.
Nate the great March 9, 2011 um 4:07 pm
True. And a couple commenters here have pointed out possible alternatives.
I’m still thinking of the original article, though, which did discuss free Kindles.
burger flipper March 10, 2011 um 12:55 am
I think the most common version of this rumor is that the free kindle would go to prime members: people who fork over at least 80 bucks. And people who pay for prime are definitely high volume purchasers. No freegans there.
So maybe they’d offer a 2 year prime membership for 150 and throw in a Kindle. Seems quite possible to me.
Gardefjord March 15, 2011 um 4:02 am
Carphone Warehouse is going to offer a free Kindle with a variety of phones on two-year contracts. Just saying. http://www.reghardware.com/2011/03/14/carphone_warhouse_kindle/