The new version of Amazon’s Kindle e-book reader has been attracting quite a lot of press (including within this blog), and generally the coverage so far seems to be positive: its screen is easier to read and displays more shades of gray, it’s thinner, its keyboard is easier to use, and it doesn’t look quite as much like a medical device. One improvement, however, has been strongly criticized and may threaten an existing business model.
This new feature is the Kindle’s ability to “read” text out loud; text-to-speech technology has been improving rapidly in recent years, and supposedly the Kindle’s computer-generated voice – named “Tom” – is reasonably pleasant to listen to, at least for a little while. Surprisingly, this has stirred up some controversy.
In this New York Times op-ed, Roy Blount, the President of the Authors Guild, argues that the Kindle’s new ability is essentially stealing value from authors and publishers because it offers each title as “an e-book and an audio book rolled into one” but doesn’t pay anyone for audio rights and may threaten the market for audio books. Although one writer responds that the Kindle’s speech synthesis just isn’t good enough to compete with audio books, it seems inevitable that the technology will reach that point in the not-too-distant future.
This is a terrific example of an entrenched business model threatened by (and fighting against) a new technology that undermines it. From Baldwin Locomotive to VCRs to Better Place, this kind of tension is ubiquitous, and overcoming it can require businesses to transform their business models to adapt – because, litigation aside, new technologies are tough to stop. Baldwin Locomotive may not have seen diesel coming early enough, but the entertainment industry adapted to VCRs after failing to stop them in court by using them as a new channel to sell their content. Through sites like Hulu, it’s now adapting to the Internet as well. Whether Better Place’s nascent business model will be undermined by better batteries remains to be seen, as my colleague Luke Langford explains.
So how will book publishers adapt? The audio book industry may well be in for some tough times, but the Kindle could enable some fascinating (and potentially lucrative) new business models that weren’t possible within the paper-and-ink paradigm. This blog post suggests just a few good ideas, from dynamic pricing to social networking to self-publishing. Making money through the Kindle might look different from making money through Barnes & Noble, but the faster the authors and publishers of the world recognize that business model innovation will be necessary and doesn’t have to be zero- or negative-sum, the brighter the industry’s future will be.
Update: Amazon appears to be taking this argument seriously, at least for now. On February 27th, Amazon announced it would be allowing publishers to decide whether to allow text-to-speech to be made available for their content.
