Tuesday, April 12, 2011

Cheaper Kindle With Ads...So What

Are you a little price conscious. Wanted a Kindle by Amazon, but waiting for a lower price point. If you don't mind ads with your e-books, your wish has been granted. "Amazon will sell its e-book reader at the lower price by showing ads as screen savers and at the bottom of the home screen, and by selling special offers, similar to Groupon and other daily deal sites." Sounds like a great deal until you hear that the cost savings is only $25.

Considering that your Kindle should last at least 3 years, a $25 savings doesn't seem worth the aggravation of putting up with advertising. "Amazon will show ads from brands like Buick, Procter & Gamble and Visa. The ads will also show up on the home screen, but they will not appear inside e-books." Considering that you get an ad every time you turn it on, the advertising revenue must surely pay for the cost of the Kindle. But $25 less seems hardly worth it. Couldn't Amazon have knocked the price point to well under $100, perhaps $50. I believe at that price point, consumers would flock to grab a Kindle and would further position Amazon the leader in the e-book space. And at that low a price point, consumers would more readily accept the ads.

But at this current discount, the price point is $114, and I don't believe that this particular marketing move will gain much traction. Will some consumers see a $25 savings for ads worth it, sure; but I am doubtful that it will be considered a hit. At the same time, it will be worth watching to see what else comes out from Amazon. They speculate a competing touch screen with the Android OS. Perhaps this ad move is short term till that formal announcement is made.

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