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Posted by Tom, September 4, 2013

Kindle MatchBook

Yesterday Amazon announced Kindle Matchbook – a new programme (initially only in the US) that will offer customers Kindle editions of previous print book purchases for either $2.99, $1.99, $0.99, or free. The move is being compared to another campaign launched last month by Amazon, AutoRip, which offers free MP3 versions of previous CD purchases – but reallly it’s a much bolder step than that: for one thing, CDs are already easily digitisable, whereas there’s no straightforward way (you could scan every page, I suppose, but that’s about it) of getting a print book onto an e-reader.

As a consumer, MatchBook looks great to me – there are all sorts of reasons why having eBook editions of my print library is an appealing idea. But as a publisher, and someone interested in how Amazon run as a business, it’s hard to see what the rationale was for this programme. On the surface, I can see how it sort of makes sense: Amazon tie more people into the Kindle platform, potentially upsell a lot of people who were intending on only making one purchase into spending a couple of extra dollars, and increase eBook downloads at a stroke.

But it’s not really that straightforward. Conventional wisdom is that Amazon have been pinning their hopes on eBooks as the key area which might one day make them a profit (they’re certainly not making any money on sales of Kindle devices, which operate on absolutely wafer-thin margins). Yet MatchBook seems to fundamentally devalue that core product: it treats eBooks as commodities with no inherent worth; as products that can be given away for nothing as promotional tools. Even if the norm is for a $2.99 pricetag, rather than a straight giveaway, the inescapable conclusion is that the e-format is nothing more than an adjunct to print.

So what will this do to eBook downloads for Amazon? I’m sure that lots of people will happily bundle the two formats and pay for the print and e-editions simultaneously, but who will want to continue paying the full price for eBooks as standalone products (which they have, at long last, managed to establish themselves as being) if they’re available for little or nothing when you buy the print edition? And what will MatchBook do to the general assumption about what eBooks “ought” to cost? What will that shift in buyer behaviour do to Amazon’s bottom line, I wonder?

The only conclusion I’ve been able to reach is that this is an extension of Amazon’s attempt at playing the world’s longest-lasting game of chicken: they are willing to make a loss (and their shareholders are willing to indulge this strategy) for as long as it takes for them to outlast all of their competition – and then, perhaps, they’ll try and make some money. And, ruthless as it is, I can see how this would work. Am I more likely to buy a print book from Amazon, now that I could get the ebook edition for nothing? Yes, probably. But I’m also less likely to want to buy just an eBook now, which is what makes this a particularly aggressive move towards the competiton: Amazon are, perhaps, happy to eat into their own margins to win out in the long term.

And that means a threat to bookshops. But I think this could be a great opportunity for high street retail, rather than a death knell. If bookshops can get in on the act and start offering bundling as well, they may well be in a better position to take advantage of it. For a start, bookshops’ core products are print, rather than e-, books, and so unlike Amazon, they won’t be undermining their own health by giving away the e-format. They’re also in a great position to be able to up-sell to customers: there’s no competition between an engaged and enthusiastic bookseller and a website algorithm. And if bookshops can build the right infrastructure, they might be able to offer customers e-editions in non-proprietary formats for more than one sort of device, rather than just the Kindle edition.

What do you think? Do you think this is good for Amazon’s business? Are you more likely to buy from Amazon if you can have the two formats bundles together? Will you continue to buy eBooks separately? We’d like to know.