Amazon Takes One Small Step Toward Monetizing Online Content

Amazon has opened another front in its push to establish the Kindle as the dominant e-reader in the market. The company is allowing bloggers to offer their posts in a subscription formatvia the Kindle store.

The program is currently in beta. Bloggers can sign up for an account right now, however, by providing Amazon with information and an RSS link to their site.

The blog posts will then be delivered wirelessly to subscribers’ Kindles. Unlike on the Internet, these blogs will not be available for free — Amazon will set a price. It has not offered much in the way of pricing information for the majority of blogs likely to publish on the Kindle; the only guide is the prices it has already set for well-trafficked blogs such as the Huffington Post, which are between US$1 and $2 per month.

Whatever fee schedule Amazon does set for blogs, the majority of the revenue — 70 percent — will go to the company.

Flawed Model?

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Clearly, this is part of Amazon’s larger strategy to build traction with the Kindle — a strategy that has included several agreements with newspapers and magazines for subscriptions as well as the forthcoming release of the Kindle DX, which, with its larger screen, is better suited for reading newspapers.

Like its other go-to-market strategies, though, there are drawbacks to Amazon’s blog publishing initiative, starting with the fact that instead of paying for a blog, a user can merely access it on the Kindle’s browser.

Also, the demographics don’t necessarily add up, said Loren Johnson, a digital media industry analyst with Frost & Sullivan.

“A disproportionate number of Kindle buyers are over age 50,” he told the E-Commerce Times. “The disproportionate number of blog writers and readers are under 50.”

Somehow Amazon will have to make the twain meet — either by convincing Kindle buyers that they should read more blogs on a regular basis or convincing bloggers to sign onto the Kindle despite the likelihood of low revenues.

Path to Monetization

For many bloggers, of course, that is probably going to be the least of their concerns. The Kindle is seen — or at least is being marketed — as the best approach to monetizing online content.

For instance, when Scott Fox, author of e-Riches 2.0: Next Generation Online Marketing, heard that Amazon was allowing bloggers to publish their work on the Kindle, he immediately signed up his e-commerce success blog.

“The audience for the Kindle is still small, and the number of people likely to pay for blogs delivered to their Kindles even smaller, but I would rather have my content and brand there from the start,” he told the E-Commerce Times.

“That gives my blog the opportunity to grow with this new platform rather than trying to catch up later. Kindle blog publishing reaches an audience very well suited to my blog’s content, too.”

Long-Term Advantages

Indeed, many analysts believe that once the Kindle becomes more mainstream — and, more importantly, drops in price — it will be a game changer for the newspaper and book publishing industries.

That day is not around the corner, though. If anything, Amazon is moving away from a price point that most consumers would find more comfortable.

The Kindle 2 is being offered at $359, which is too high for mass sales. The DX costs even more — $489.

“Amazon will have to work to get the message out,” Frost & Sullivan’s Johnson said, “but this product is just great; I believe it will revitalize book sales at some point in the future — perhaps even more than people are expecting today.”