Will bigger Kindle be boon for e-readers?

By Scott Kirsner, Globe Correspondent  |  May 11, 2009

Amazon's new digital newspaper reader. Amazon on Wednesday unveiled a jumbo version of its Kindle e-book reading device, dubbed the DX. Sarah Rotman Epps, of Forrester Research, wondered whether the product, which will be discounted for consumers who also subscribe to certain newspapers on it, will give the publications a much-needed boost.

We estimate that just over one million consumers have bought Kindles and Sony Readers so far - impressive, but not enough to drive mass adoption of e-Reader newspaper subscriptions. Publishers need to catalyze adoption of the devices to get as many subscribers as possible buying content if they want to see real revenue and real cost savings from cutting print.

Will the Kindle program work? I don't know - it depends on how deep the discounts are for subscribers. For a device that retails for $489, the discounts will need to be mighty steep to convince those that weren't otherwise considering buying Kindles to take them up on the offer.

The other unknown element is advertising: The Kindle DX has better image display than earlier Kindles, but [Amazon] didn't mention anything about an ad model. Newspapers rely on advertising for a significant portion of their revenue, and they need partners that support this model. Luckily for newspapers, they're about to have a lot more choice as more competitors come on the market in the coming year. blogs.forrester.com/ consumer_product_strategy

A gravitational shift. Is Washington, D.C., the country's new business hub? Venture capitalist Jeffrey Bussgang of Boston's Flybridge Capital Partners argues that while many companies once looked to Manhattan as a source of capital and customers, D.C. is their current fixation. Bussgang was there last month as part of a delegation of 100 chief executives organized by the Progressive Business Leaders Network, which he co-chairs.

As you would expect, the CEOs were keen to hobnob with the Washington elite and their peers. But more important, they were interested in how the new paradigm that the Obama administration is going to affect their businesses. And like all good entrepreneurs (the bulk of our membership are CEOs of mid-sized and small young companies, not Fortune 1000), they were looking for insights and opportunities. If you are playing in the $6 trillion energy sector, the $3 trillion health industry or even large parts of the $1 trillion IT industry that touch regulations (e.g., broadband, wireless), then what's going on in Washington, D.C., matters to you. Senator John Kerry repeated what has now become a common refrain from politicians: "The next Google will emerge from the energy sector." And it seems the US government is determined to facilitate this by pouring billions to stimulate the sector.

Personally, I don't believe this power shift to Washington, D.C., is entirely a good thing. In truth, it makes me very nervous that we are entering an era where public opinion and public officials are against what has made this country so great and unique in the world - the aggressive pursuit of open markets, free trade, and a strong distaste for regulation and government intervention in business affairs. Governments have never been good at picking winners and losers in the free market (see: Japan, collapse of). But the reality is that this administration's ambitions are breathtaking and transformative. Business leaders have never had a stronger reason to care more about following what's going on in the halls of Washington. bostonvcblog.typepad.com

You now work in marketing. In a recession, every one of a company's employees "should be in marketing," writes Harvard Business School professor Rosabeth Moss Kanter. Too many businesses under stress forget about their customers, she argues. Her advice:

Increase customer contact and communication. Financial turbulence sometimes leads managers to over-emphasize pleasing banks or investment analysts while appearing to take customers for granted. But as we all know, without customers, there is no business.

Senior executives, regardless of function, should become personal ambassadors to major customers, thanking them for their business and making it clear that they want to help them succeed. But don't stop there. People throughout the ranks can reach out to customers - perhaps a personal note or a phone call to provide news or ask questions. Customers will know you care, you will be better informed, staff will feel more involved, and unexpected opportunities might arise.

Start looking for new markets now. Companies dependent on a few large customers are particularly vulnerable to changes in their customers' fortunes, but all companies need the flexibility to move quickly into promising markets. In uncertain times, managers should increase efforts to identify additional uses for company products and additional sources of customers for the future.

Emphasize and reward small wins. Innovation is an on-going task, but turbulent times increase the need to get everyone involved in undertaking small improvements that can be easily and quickly implemented - to find a cost-saving efficiency, improve the work environment, or convince customers to buy a little more.

Challenging times divide winners from losers. Winners survive because they never forget the important enduring truth: High quality products and services are created by engaged employees who know and care about customers. blogs.harvardbusiness.org/kanter

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