Last week, I spoke to an audience of up-and-coming leaders at a global publisher about the Curve and its consequences for their business. One throwaway line I made was this:

“Apple cares about selling hardware, not software. It pushed the price of apps towards zero to shift units of iPhones and iPads. If Amazon cared more about selling Kindles than being a retailer, ebooks would already be free.”

Shortly thereafter, Amazon announced a very generous subscription service to a wide variety of content aimed at 3-8 year old kids, provided you have a $159 Kindle Fire. It makes me wonder if this is the beginning of a shift for Amazon.

As PaidContent says, “Kindle FreeTime Unlimited, is a very ambitious program. For a set monthly price, families get unlimited access to ebooks, movies, TV shows, educational apps and games aimed at 3-to-8-year-olds. Households that subscribe to Amazon Prime will pay $2.99 per child or $6.99 per family (up to six kids) per month; non-Prime members will pay $4.99 per child or $9.99 per family per month. … The content partners here are brands that kids will actually recognize: Sesame Street, Disney, Nickelodeon, PBS. That means characters like Dora, Elmo, Thomas and Cinderella — the good stuff.”

This is not yet a race to free. Between 3 and 10 dollars a month is a meaningful revenue stream from 3-8 year old children. Yet the serviced is being pitched as a reason to buy the hardware. And if Amazon decides that the best way to sell the hardware is by marketing it with a huge range of high-quality free or cheap pieces of content, maintaining high prices for ebooks will be very hard.

Games has managed to adapt with the In-App Purchase/Virtual Goods business model. Books had better start working out how they will adapt.

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