Kindlenomics Zero: When e-Texts have no entry cost

Kindlenomics Zero: When e-Texts have no entry cost

Summary: Amazon's release of the Kindle for iPhone application today had me thinking about the economics of e-Texts again. Back in November of last year, I ran the numbers on how much money you could save by using electronic versions of books versus dead-tree equivalents, using two usage scenarios -- one for College and Graduate students that need to purchase textbooks, and the other for the average Joe who reads a certain amount of books per year.

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Amazon's release of the Kindle for iPhone application today had me thinking about the economics of e-Texts again. Back in November of last year, I ran the numbers on how much money you could save by using electronic versions of books versus dead-tree equivalents, using two usage scenarios -- one for College and Graduate students that need to purchase textbooks, and the other for the average Joe who reads a certain amount of books per year.

Using those calculations, we determined that a typical college student over the course of eight semesters would save approximately $700.00 on books, if you factored in the entry cost of a Kindle at $359.00. At the graduate level, a typical yearly savings on textbooks would be about $200.

Click on the "Read the rest of this entry" link below for more.

For the consumer, we determined that a break-even point to make back the cost of a Kindle in the first year of use was a reading habit of six e-books per month, which equated to approximately $354.00 per year. In our first study, we neglected to do an analysis of magazine and newspaper reading and how that would impact savings, which was pointed out to us by many of our readers who find the Kindle to be valuable for periodical subscription reading.

Also See: Kindlenomics Zero (Excel Spreadsheet)

Also Read: Kindle Economics

But what would happen if the cost of entry to read Kindle e-texts was free? In other words, what if you already owned a compatible device, such as an iPhone, or some other platform that could read the texts, such as an inexpensive netbook? Then the numbers start to look a lot more appealing.

At the undergraduate level, given current average e-textbook prices, if you eliminate the cost of a Kindle, you are now saving $1059.00 over the course of 8 semesters, if the e-Texts were available. At the graduate level, you're saving $557.00 per year, also assuming the books were available on Kindle based on average e-textbook costs.

And novel readers? Obviously, if there's zero entry cost, then you immediately start saving money. If you read six books per month, you would save $354.00 per year. A more casual reader who read 3 books per month would save approximately $177.00 per year.

However, newspaper reading is when you start getting into serious cash. What jumped out immediately was a 1-year, 7-day subscription to the New York Times. The paper cost, using introductory first year best rates, is $487.50. The Kindle 1-year subscription is $160.00, netting a savings of $326.00 per year, or 67 percent off the discounted home delivery cost.  If you were actually to buy it on the street at a newsstand, it would cost $1.50 per weekday, and $3 every Sunday, for a total of $624.00 per year. To put that in another perspective, an actual Kindle purchase at the beginning of the year makes sense if you read the New York Times on a daily basis, even at current Kindle prices, because you only fall slightly short of break-even at the home delivery rate -- $31.

Now that you know the economics of how much money you can save with a free e-Text reader, are you more inclined to buy Kindle books on the iPhone or future compatible device? Talk Back and Let Me Know.

[poll id="13"]

Topics: Mobility, Amazon, Collaboration, Hardware, iPhone, Microsoft, Software

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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Talkback

7 comments
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  • tiny pages

    Are you really going to read a novel on the I phone? Seems the text would be limiting. Another e-device might make sense
    Col Mustard
    • ...have their advantages.

      I regularly use the "tiny page" of a Palm TX for ebook reading. The active space is very similar to that of an iPhone. It's got a lot of advantages over an actual book or a larger electronic display. Because the screen is small, you really can't lose your place. It's backlit, so you can read in the dark. It remembers exactly where you left off. You can read it in landscape orientation. And it fits easily in a shirt pocket.
      dave.leigh@...
  • Option 3

    3. No, I'd use a different device AND a different vendor.

    I really despise it when a vendor is treated as the only option, whether it's the iPod/iTunes or Kindle. Amazon's not the only game in the carnival. They just have the loudest barker.
    dave.leigh@...
  • It's the content, content, content....

    If you can't get the books you want in e-book form, what good does either the Kindle or iphone app do?

    Given the other disadvantages of ebooks, you can't lend them to your neighbor, can't donate them to the library or sell them on a second-hand market, can't have them autographed by the author, the over-priced cost of the ebooks themselves, and then you'll probably be buying the Kindle 3 and 4 and 5 over the years.... well, you really should be able to at least get the content you want, don't you?
    ridingthewind
  • I'm staying away

    I have no interest in any propriety system loaded with DRM, no matter how they price things. Besides, I'd always be concerned about having my expensive eReader out by a hotel pool where it can be splashed or stolen. My $8 paperback lets me relax and enjoy my vacation no matter what may happen to it. And I can loan it out, sell it, or give it away.
    bmgoodman
  • just want PDF reader w/ USB port

    Just give me a PDF reader with a USB port and a rechargable batter, and I'm good to go. Dont need this 3Gwirless+DRM cr*p.

    Smarty_Pantz
    • Already done

      I've got a Sony PRS 505 - it does exactly that.
      Plenty of free ebooks available - Project Gutenburg for classics, Manybooks.net for the golden age, and Baen, Tor, and Del Rey for a taste of the good stuff being written at the moment.
      The last 3 have whole books, one or two from each of several authors, often giving a taster for series, and the first two are public domain, so you can freely pass on books that you've enjoyed.
      philculmer