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Kindle Value-Chain Change

Considering Amazon’s new “front door,” its e-reader Kindle, as a stocking stuffer, I think about the $400 price tag and ask “What is it?” and “Is it worth it?” and “Why does it matter?” In fact, it is not just another proprietary e-reader. And unlike the BlackBerry, it is not a handheld device trying to be all things to all people, a cellphone that’s also a web browser, address book, doc reader, record player, with a keyboard so small your fingers get stuck. The Kindle appears to be an extremely slick cash register at the front end of the ubiquitous online content retailer, Amazon. A cash register its users pay to own, and then pay to use.

The e-books themselves are relatively cheap for this device, at $9.99. But when considering the “cost” of individual e-books, aren’t we really focusing on the wrong thing, the list price of an “object”? Publishers and booksellers have this holdover habit of sticking a price onto what in the online world is a completely artificial “commodity”—access and display of a screenful of letters powered by zeroes and ones. In fact, the only covers or pages or boundaries around online books are those deliberately built into them by their developers so that we retro humans will feel that we are dealing with something familiar, so we won’t be afraid.

This price-per-book business model can’t last; it’s an artifact from an earlier age when reading meant holding a thing—a book!—in your lap while decoding its meaning, thinking, memorizing (remember Fahrenheit 451), internalizing. Paying a “list price” begs the point of what’s really for sale here. It’s a distraction that really doesn’t matter in the least.

What’s for sale is us—our attention, our associative thought paths as we navigate around Amazon. It’s all recorded, from first lighting the fire and flipping the Kindle “on” switch, to pressing the “buy” button. At Amazon, I might even be able to buy my own words back again, if I am lucky enough to have my blog listed as one of the otherwise free Internet resources available through this device—for as low as $.99 per month.

The reason Amazon can afford to deep-discount not only its real books, but also its e-books, is that it is holding for itself and its shareholders, presumably for its own commercial exploitation, the priceless value unique to this global online medium of ours, the recorded behavior of its millions of customers worldwide. Us. You and me. Our searches. Our log files (those many clicks behind the patented “one click” that makes shopping so easy). Our searches, profiles, ship-to-and-bill-to buying histories. Upstream from this data, recording what used to be private information kept in people’s heads, not their handhelds, Amazon with its seductive new Kindle “front door” sits in a very powerful position indeed.

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