Smaller profit margins will slow adoption of larger Kindle

I read a great article this morning in InformationWeek. It didn't focus on any of my concerns with the Kindle DX (high cost, black and white screen, lack of WiFi, closed standards, DRM, etc.). Rather, it went to the heart of educational content for the device:

...what [the Kindle DX] doesn't have is a clear path to profitability. And without that, textbook publishers likely will move slowly toward the digital world, delaying potential benefits for college students and school districts. Those benefits would include lower-priced electronic versions of books and the convenience of having textbooks in a single, lightweight device.

As the author points out, content loses up to 50% of its value when it's digitized; it simply can't sell for as much and is far easier to share, even with DRM in place. Although Amazon has signed on 5 universities to test the Kindles on campus (is Kindles on Kampus a bad slogan?) and 3 publishers (Cengage Learning, Pearson, and Wiley) to test a limited amount of content in digital format on the Kindle.

Testing a limited amount of content and providing a wide range of textbooks are two very different things. As noted in the article, "it's not clear how far the publishers would be willing to go in offering electronic versions of textbooks, if the test proved successful." Eventually, students and universities will simply demand it; this is 2009, after all, and digital content pervades almost everything we do. Dead tree textbooks should and will be a thing of the past.

However, textbook publishers, for now, hold the upper hand. If they refuse to move to digital formats, the open source textbook movement simply isn't mature enough to step in. It looks like we have as much as a five year window (possibly more; talk back with your thoughts on timeframe) until free content and/or student demand forces publishers' hands in this matter.

It's all about economics. Right now, textbook publishers are making a killing. That killing will be substantially reduced if they move to digital formats (or educators simply start producing and aggregating their own content). Why should they provide Amazon with anything more than "a test" in the near future?