In a university hall in New York City last month, in front of a standing-room-only crowd, Jeff Bezos, the founder and head of Amazon.com, unveiled a piece of electronic gadgetry that could revolutionize the way the world reads books, gets news, and receives information of all kinds. It was an ugly-looking slab of computer screen, but that didn’t dampen the crowd’s enthusiasm. The wireless gizmo, called the Kindle DX, may not be pretty—it lacks the elegant simplicity of the Apple iPod—but it does one thing virtually no other device has been able to do. With its big, crisp 9.7-inch display, it makes reading online as easy and enjoyable as doing it the old-fashioned way. And it can quickly download a library’s worth of content.
There have been no shortage of e-book skeptics, but earlier versions of the Kindle have flown off of shelves. Amazon.com sold an estimated 500,000 Kindles last year—and was sold out of the device over Christmas. One analyst estimates it will earn the company over $1.5 billion in revenue by 2012. In the U.S., book sales may be on the decline, but e-book sales are surging. In Japan recently, four of the top 10 bestsellers were released exclusively as e-books. And Bezos was joined onstage by the chairman of the New York Times, Arthur Sulzberger, Jr.—“Wonderful!” he shouted at the device’s unveiling. Along with the Times, the Boston Globe and the Washington Post will soon be testing their products on the Kindle in the belief it could save their industry. What Bezos unveiled was a whole lot more than a gadget. A lot of people are thinking the Kindle will be to the printed word what iTunes has been to music.
But here’s the thing: you can’t have one. When the Kindle DX goes on sale this summer (for a hefty US$489), it will be available only in the United States, just like earlier versions of the gadget. Amazon has given no indication that it’s headed for Canada any time soon. “We haven’t announced a timeline yet and we are not doing so at this point,” was all an Amazon.com spokesperson would say in an email. The Kindle, which first debuted in the U.S. in 2007, joins a long line of new and potentially groundbreaking technologies that are available in the United States but not in Canada. Whether it’s the hugely popular online video service Hulu.com or ring tunes for the iPhone (another product that Canadians waited months for), we’re out in the cold. While frustrating for consumers, this lag is also a potentially crippling problem for a country with any ambition to be a player in the digital economy. Canada may be a wealthy, wired, well-educated place, but it is also quickly becoming one of the Western world’s technological backwaters.
Amazon.com is not what you’d call an insular company, and you can hardly accuse it of being overly obsessed with the American market. It has a successful Canadian division, Amazon.ca, and fully half of its business comes from outside the U.S. But there are a few big reasons why we can’t get U.S. technology like the Kindle faster. One is market size, says Warren Shiau, a technology analyst with the Strategic Counsel. If the Kindle DX is a hit, then Amazon.com will have all the business it needs in the U.S. The added cost and hassle of the Canadian market just isn’t worth the time and effort in the early stages. That’s what happened with the popular Flip Video brand of palm-sized video recorders. Flip just recently said it will start selling its full product line in Canada, months after it was being raved about in the U.S. But an even bigger roadblock is rights issues. Once a company decides it has time for Canada, making the move isn’t as simple as it might seem.
Behind the scenes, there are often some steep barriers that can at the very least severely delay new technologies from landing in Canada. In the case of the Kindle, Amazon.com needs to strike a deal with a wireless carrier—like Bell or Telus—which uses the same technology as the Kindle to download books and newspapers. Analysts say this is the single biggest sticking point. Establishing rights to publish American books in Canada electronically is also an issue that can complicate a smooth border crossing.
Negotiating these kinds of technicalities can be time-consuming, especially in Canada. When Apple decided to start selling iPhones here—only after the initial buzz in the U.S. started to cool—it had to go through Rogers Communications. It’s still the only cell carrier with the advanced wireless technology the iPhone uses. “Everybody has got a market that they have a vested interest in and in the Canadian market there are a few powerful players you’ve got to deal with,” says Shiau, about the kinds of hoops that tech companies must go through. Neither the carriers nor the tech companies can really be faulted for wanting to get the best deal possible, but it does take time and can influence where a company decides to push new products, he adds. Ultimately, it makes sense for manufacturers to target markets “that are accessible with the least modifications or negotiations.” Canada doesn’t always fit the bill.
If there’s one other revolutionary service, next to the Kindle, whose absence seems to infuriate Canadians, it’s Hulu.com. The online television site streams popular U.S. shows like Saturday Night Live and House as well as sports (including NHL games) and news, usually the day after they first air. With the backing of NBC, ABC and Fox, it’s set to overtake YouTube in ad revenue. But try and access this wealth of free entertainment and you get an apologetic message that videos “can only be streamed from within the United States.” Why? “Licensing, licensing, licensing,” says Michael Geist, a law professor at the University of Ottawa who specializes in technology and the Internet. When Canadian broadcasters, like CTV or Global, buy a U.S. television series, they also typically end up with the online rights to those shows. Hulu would have to convince those networks to give up those rights, or wait until those contracts are renegotiated by the U.S. networks, says Geist. Licensing issues have also prevented Canadians from accessing Skype’s much-anticipated Internet-based phone service for the iPhone.
About the only good news Canadians have had is the announcement last week that Apple will start selling current episodes of U.S. sitcoms on its iTunes Canada store. Unlike Hulu.com, it’s not free. Single episodes will cost about $2.50 to download. Regardless, it’s something many Canadian fans of U.S. television have been waiting to hear for years.
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