Amazon Kindle - Can Blogs and Money Mix? Should They Mix?

Rich Tehrani had a thought-provoking post yesterday that I have good reason to weigh in on.

As I learned from Rich's post, Amazon has opened up its blog beta to the world, and now anyone with a blog can register with Kindle, where blogs are offered on a subscription basis. Wow. So many things to think about here.

Rich covers important ground, likening Amazon's move here to Microsoft's early days when it basically cornered the market and could dictate the terms of doing business. Amazon definitely has amazin' market power, and what blogger wouldn't want to be on a platform like this with the potential to actually make money off their blogging. Like moths to a flame, I'm sure they will come in droves and droves, dreaming of easy money. Is this really a good thing?

Amazon, of course, is getting what it wants - tons of essentially free content to make the Kindle a sexier product. There isn't a blogger on the planet who doesn't want to make some money, so of course, they'll be all over this. Anyone who follows me knows the issues I have with bloggers versus journalists, and I really have no idea how Amazon is going to manage all this. How will they keep out the fairweather bloggers and wackos and self-motivated people with agendas - both good and bad. How will the blogs be evaluated, categorized, vetted, ranked, etc.??? So many questions here.

Anyhow, Rich rightly points out that nobody pays for content like blogs, so what makes Amazon think they have a winning business model? There's definitely a challenge here, but I certainly applaud Amazon for trying. Sooner or later somebody will come up with a viable business model for online content that isn't advertising driven.

Actually, I think Amazon just might have it right here, as the latest version of Kindle is another step along the way for the online reader concept, which I believe will be an important product category as mobile broadband becomes ubiquitous. It's early days, but things are changing, especially in the publishing world - just ask anyone in the newspaper business. We're spoiled in North America, but in countries like Korea, mobile readers are widely used for newspapers, and the green angle for saving our forests will eventually become as hot a topic as the need to find new/cleaner sources of energy.

It's not a big stretch in my mind for Kindle becoming a must-have gadget, especially for commuters, and I have no doubt there will be a segment of that market who will be willing to subscribe to their favorites, whether it be blogs, newspapers, serialized novels, etc. Of course this only works so long as the Kindle does not evolve into a larger version of an iPhone. Once you're on the Web, there is zero reason to pay for something you can get for free online.

That's just one area where things get complicated. Another is the fact that bloggers who join the Kindle stable are not exclusive, so they're not obligated to create new content that makes it worthwhile to subscribe to them on Kindle. That would sure change the equation, right. And then there are newspapers. I'm sure it's just a matter of time until someone like the NYT makes a deal with Amazon. It's one thing to monetize content with bloggers who are not beholden to any editorial guidelines, but it's a whole new ball game with the news. That's a huge topic alone, but I'm sure you get the idea.

And finally, as Rich notes, there's the revenue sharing issue. Is a 30% cut fair for bloggers? That depends on a lot of things, and to side with Rich, Amazon does hold all the cards, so they can justify keeping 70%. They know that 30% for bloggers is way more than the nothing most are getting now, so what's the problem? Maybe not so much now, but as this thing matures, there will be a few really popular blogs and tons that nobody ever reads. The vast majority will probably never earn anything, but among the winners, sooner or later those who are drawing big numbers will want a bigger cut, and then the balance of power will shift. Naturally.

Having said all this, I'm also speaking from a very small position of having a vested interest. Followers of my blog may know that my blog has been available for subscription on Kindle for a couple of months now, so I'm a bit ahead the curve on this story. However, unlike this public beta, I was invited to participate through a syndication service I've been with for several years. For me, the 30% revenue share is fine, since I'm not doing any of the marketing, and Amazon Kindle has far more marketing reach than my brand will ever have. Fair ball. Of course, when I went in, this was a pretty controlled group, so the universe of bloggers is pretty small. I have no idea what happens when/if thousands of blogs are added to Kindle, but that sure would dilute things for everybody, and I have no idea how anyone will know the good blogs from the bad blogs. It's not a problem I'd want to be managing. I should also say that it's too early to determine how well I'm doing, but I don't expect to get rich.

Just one more thing to note from Rich's post. I agree with him that whether you love/hate what Amazon is doing here, it's an important story to follow. If they somehow prove there's an appetite for paid content that will have huge and exciting implications for publishing. He's not betting on it, and I also agree that as mobile broadband becomes the norm and Netbooks really take off, the number and variety of free sources of content will proliferate and possibly overwhelm anything that Kindle can offer. Part of me likes this scenario - we all like free - but another part of me dreads it, not because I'll make less money, but newspapers could face extinction, and I don't think anyone really wants that. Enough. Kindle isn't going to save the world, but there's a lot to think about here.