Sean P. Aune and I both spotted a couple of posts around the web today pointing to the fact that the Kindle, immediately following the new affordable pricing model, has sold out completely.

Sean and I have been particularly attuned to significant pricing changes in the digital reader markets because we’ve long held that the first organization to get a device priced close to the $100 mark will win. I’ve been spending the last hour or so searching my video archives for proof that we’ve said this publicly, but since so much of what Sean and I were saying publicly at the time was on Mashable (and their search functionality leaves something to be desired), I’ve only just now found the video I was looking for (turned out, it was on my personal blog).

None-the-less, something I’ve always contended is that the current business model for eBook readers is flawed, and certainly the price-point for the Kindle and other eBook readers is far outside the realm of what will make it what the mainstream would consider as a “best-selling product.”

From my post:

… a couple of days ago I was searching for a cheap used Kindle 1.0.  I did a Google product search for a Kindle priced between $100 and $200, and all I found were Kindle books priced in that same range.

Where are my savings?  What’s my incentive for this? The equipment is expensive, the books are expensive – why do I want this?

I say this as someone who’s worked on creating budget hardware and eInk technology before.  This is something that can be done a whole lot cheaper.  Many things need to change before the Kindle will become the cultural revolution that most people seem to be expecting.

Now that the Kindle has dropped it’s prices and sold out as a product, everyone has suddenly remembered the rules of supply and demand and how all that works.

Given that I was right about the price-point, I thought I’d take another opportunity to flog my thoughts on eReader business models.

It’s been widely publicised by various pundits that the cost of printing and distributing dead-tree versions of publications is far more expensive than paying the actual talent that puts the paper together. Furthermore, when the eReader market was more of a notion than a reality, several of us did the math that it would be more economical for publications to simply buy their long time or in-some-sort-of-long-term-contract readers an eBook reader than continue to deliver to them a physical version.

While I’m thrilled that the prices of these devices are finally getting to where they need to be, I don’t think the move goes far enough.

If Amazon (or some other eBook Reader manufacturer) really wants to move the needle, they need to be approaching publications on a subsidized version of the product specifically designed (but not limited to) the consumption of magazine publications.