Amazon's Kindle DX Poses Profitability Challenge To Publishers - InformationWeek
09:22 AM

Amazon's Kindle DX Poses Profitability Challenge To Publishers

The Kindle DX is leading the charge toward e-textbooks, but the result may be as painful for publishers as the freefall in CD sales experienced by the music industry.

The biggest challenge for textbook publishers joining several universities in testing the usefulness of's new Kindle DX will be in finding a way to make money on the large-screen electronic book reader.

Introduced on Wednesday, the bigger, and more expensive, version of Amazon's Kindle 2 e-reader has a lot of the technology publishers need. The device is thin and light, it shows crisper graphics and text without the eyestrain and glare associated with the backlight used in laptops, and it's big enough to display electronic versions of textbooks. (On Tuesday, Amazon received its first Kindle design patent.)

No Clear Path To Profitability

But what it 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.

Nevertheless, the Kindle DX is forcing textbook publishers to deal head-on with the growing demand for electronic content, something they've been able to avoid until now. "They're in a better position than some other publishers, but they're not immune from the digital revolution," Forrester Research analyst Sara Rotman Epps told InformationWeek. "It's only a matter of time before schools demand this type of content. Publishers hold the cards for now, but they know the game is changing."

A sign that the change is here is in Amazon's ability to line up five universities to test the Kindle DX on students and faculties starting in the fall semester. The cost of the pilot programs has been kept low, and participants will get a Kindle DX at no charge.

At Princeton University, the High Meadows Foundation, which supports projects that could lead to more environmentally friendly practices, is paying the $30,000 for the Kindle DX test. Amazon, meanwhile, is expected to contribute some of the funding for pilot programs at Arizona State University and the University of Virginia's Darden School of Business.

For the schools, the attraction is the potential benefit to the students, the reduction of manufacturing and transport costs, and a softer environmental impact.

"Our interest in the pilot is to provide Amazon and other vendors with information on what our students and faculty need in such devices to make them successful," said Serge Goldstein, associate CIO and director of academic services at Princeton. "The ability to deliver textbooks in a format that doesn't require paper is probably inevitable."

With schools onboard, publishers Cengage Learning, Pearson, and Wiley, which represent about 60% of the U.S. higher-education textbook market, have agreed to offer some of their products for the tests. However, it's not clear how far the publishers would be willing to go in offering electronic versions of textbooks, if the test proved successful.

1 of 2
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
Digital Transformation Myths & Truths
Transformation is on every IT organization's to-do list, but effectively transforming IT means a major shift in technology as well as business models and culture. In this IT Trend Report, we examine some of the misconceptions of digital transformation and look at steps you can take to succeed technically and culturally.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll