Why Does the Subsidized Hardware Model Bother Me So Much?
It’s no secret I read a lot. In the past seven days alone, I’ve finished 4 books totaling 1,067 pages, as well as worked on three other books which, between them, probably account for another 500+ pages finished but not in the tally. (I only know this because, at least a few times a week, it seems like I get a request for a list of my books or what I’m working through at the time. Back in June, I began building a spreadsheet to track my content consumption, figuring if I could stick with it long enough, I’d eventually make it public in a shared Google spreadsheet. That way, those of you who are also insatiable readers could use it as a source of ideas in the same way I’ve benefited from many of you sending me lists of your favorite books on everything from economics to architecture. I’m not ready to share the spreadsheet, yet, but I’ll get around to it this autumn or winter). That doesn’t include any of my investment reading, either, nor the newspapers, magazines, and other periodicals that are part of my routine.
At least 50% of my reading now happens on the Amazon Kindle thanks to the minimalism project last spring, which is still in the works. Every day, I get closer to the end goal of a total Tron-like sparseness but it’s been difficult to make the jump entirely (especially as part of my recent reading project given that so many of the books have been out of print for several decades). The only reason I’m up to a near even split is because I keep tablets everywhere. I have a Kindle Paperwhite, a Kindle Fire, an iPad, and an Samsung Galaxy Note 10.1 so I’m hardly ever out of arm’s reach if I want to spend ten minutes immersed in a tome. Otherwise, I would give in to temptation and go downstairs to the library to get my hands on a paper copy.
During my lunch break today, I decided to upgrade the Kindle Fire to a Kindle Fire HDX 7″ after seeing the latter had a mint green background option added to the settings, multiple highlighter color options, and nearly double the ppi resolution. I went to pick one up here in town and my local retailer had it on sale for $199 with special offers, a free set of headphones, and a free case that ordinarily cost around $30.
I walked out of the store. I could get it on Amazon for $244, which was nearly 23% more expensive and didn’t include the headphones or case. Plus, I have to wait until Friday to get package from Amazon. Why did I opt for what looks like a substantially less attractive deal? The Amazon version didn’t have special offers. All that means is that the lower priced version with the free stuff would show me advertising on the lock screen. I don’t want to see ads on my lock screen. In fact, the ad-supported version could have been 50% cheaper and I still wouldn’t be interested.
This has caused me to spend all day thinking about the subsidized hardware model in tablet and phones here in the United States. I don’t like it. The worst offenders are cell phones. If you look at what a typical American pays for a new cell phone, it’s obscene because they don’t just pony up the $800 or $1,000 for the device, instead leasing it through the cellular carriers for a monthly base charge on top of the service contract. In the process, the customer ends up paying around double what the phone should cost because of a psychological quirk that involves people under-weighting frequent, smaller amounts. They’re poorer, but they don’t feel poorer so they don’t mind.
It’s not analogous to the Kindle reader because there is no contract and the customer is being offered a chance to pay less for a different experience, making something a bit more affordable for families that are price sensitive. But I still don’t like the subsidized hardware model. There’s something about it that makes me feel uneasy. It’s irrational. I should be a huge fan of the Kindle pricing model. Intellectually, it gives buyers and sellers something they both want and both parties walk away happier than they would have been otherwise. That’s what is so perplexing. I can’t, quite, articulate what it is I don’t like about it. Maybe it’s class distinctions? I can’t imagine someone subjecting themselves to advertising when they could opt out for a mere $50 or so. Maybe it’s the fact that $50 is a lot of money to some people that causes me discomfort. Maybe it’s the idea of somehow not holding title to the property free and clear; there’s a condition put on it that governs your use so the psychological benefits of ownership are some how encumbered? I don’t mind it if a paid subscriber to The Wall Street Journal is also shown ads. What about hardware makes it different?
The fact that an economic model I should support feels distasteful tells me something is going on in my heart; there is some sort of value system or assumption that underscores my actions that I haven’t, yet, uncovered. I need to shine a spotlight on myself and figure it out because it’s going to drive me nuts until I can figure out why I feel this way. I’m clearly not alone in this, not that an appeal to social proof is any sort of justification. Two years ago, when Amazon tried to sell only discounted tablets with built-in advertising, people revolted and the retailer had to reverse course, though I suspect the perceived lack of choice was a significant factor in the revolt.