Down The River

13 04 2011

The evolution of the eReader just took another big step yesterday, but I’m not sure whether it was progress or a slip on a banana peel.

>Maybe it was inevitable that eReaders would become platforms for come-ons, promos and communications otherwise known as advertising. Still, when I read that Amazon is introducing a new ad-supported Kindle for $114, I froze in place.

The new Kindle, which ships on May 3, is $25 cheaper, inching ever closer to the magical sub-$100 price point. Ads will be limited to pop-ups when starting the device, as well as screensavers, which means the reading experience is still considered sacred ground, one to not be interrupted.

Since Amazon is provider of both hardware and software here, they have an inside track in their advertising model. In fact, all of the initial offers will be for other things Amazon sells. Some are in fact killer deals, but in fact set up to promote trial of other Amazon services (e.g., audio books, gift cards, music downloads). Offers from non-Amazon companies will follow shortly.

The advertising launch, though, is not retroactive. Current Kindle owners will not get the ads…only folks who buy in at the new lower price. Which basically means they are selling their advertising sensor for $25.

I like to think I am worth a little more than that, but at the same time, some of the initial offers are pretty good. Still, it wouldn’t take a savvy marketing/accounting team to figure out that Amazon could probably afford to give the thing away if it converted a good portion of these customers to other products and services. In other words, the price point is already so low that maybe they should just give it away, because it wouldn’t take long to recover the price of the device by selling other things.

Never mind that the purpose of owning the Kindle is to read…and all of the content is also sold by Amazon. That’s the luxury of perfect vertical integration, for everything is now proprietary.

If the new program is successful, I can see the day coming when we will fire up our new iPhone 7 only to be greeted with ads. iPads? More ads. Computers? You get my drift.

In other words, it won’t be enough to be faced with content-specific ads (like what we see on websites, Facebook or Google). No, it will become platform-specific, almost a consumer penalty for using a certain device. In still other words, a tax. An advertising tax. We will pay with our eyeballs, even if we saved money when we bought it.

While the Marketer in me completely understands the initiative, the consumer in me has, at best, mixed emotions. Part of me feels like I have been sold down the river. Again. The Marketer in me marvels at how Amazon has finally figured out how to enter the lucrative advertising business. The consumer in me cries, “I am not an advertising whore!”

Which means that, if they want to play like Google and Facebook, then maybe they should just give the product away. After all, Google and Facebook do. They have product and service delivery expenses like anyone else, but ad revenues more than cover them. I would feel better about the ad-infested waters of a free Kindle with more ads, than a cheaper one with hand-picked spots.

Because, you see, I (we, you) really am (are) worth more than $25, especially to a company that has the potential to sell me the world. I may be trying to paddle upstream, but maybe it’s time we consumers draw a line in the water. Let’s build a dam and keep all of this water for us.

Dr “Watershed” Gerlich




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