The Sword and Laser discussion

I saw the following article this morning

By Louis Bedigian
Benzinga Staff Writer
April 12, 2011 3:41 PM
http://www.benzinga.com/trading-ideas...

Once upon a time, when consumers paid for entertainment, they only paid once. Believe it or not, we could actually go to the movies, hand over the admission fee, and enjoy a couple hours of commercial-free entertainment.

Crazy concept, wouldn't you say? Advertisers would. They jump at the chance to pummel consumers with ads, even if it means diminishing the value of paid entertainment. Just look at what happened after the introduction of product placement: we got movies like The Weather Man.

(That is no ordinary milkshake dripping down Nicolas Cage's shoulder. As specified in the film, that beverage is actually a Frosty from Wendy's (NYSE: WEN).)

While readers don't have to worry about blobs of branded milkshakes cropping up in their favorite novels, Kindle users could soon expose themselves to sponsored screensavers.

Amazon (NASDAQ: AMZN) launched this program today with a special version of the Kindle that retails for $114 ($25 less than the traditional model) that feeds sponsored screensavers to the device. Basically, it's Amazon's way of giving consumers a discount for a nuisance.

From a marketing perspective, Amazon might have just made a brilliant move. There may very well be some buyers who were unsure of the Kindle that will now be swayed by the discount.

To further entice consumers, the company will offer special deals – such as a $20 Amazon gift card for $10 and six audible books for $6 – to those who buy the $114 model.

But while this might seem like an interesting way for Amazon to expand its product lineup, there is a hint of danger in the air that's hard to ignore. For hundreds of years, books have existed without advertisements for cars, banks, credit cards and skin care products. Those who purchase the “Kindle With Special Offers,” however, will be exposed to ads from Buick (NYSE: GM), Chase (NYSE: JPM), Visa (NYSE: V) and Olay (NYSE: PG).

Never mind the fact that consumers currently have a choice; if they accept ads from one model of the device, the day will come when Amazon expects us to accept them from every Kindle available. Other e-reader manufacturers are sure to follow suit, as will book publishers, who are eagerly seeking new ways to turn a profit.

If this sounds like nothing more than the worst-case scenario, let's not forget about the evolution of movie theaters. Despite charging more than $9+ per ticket, $5+ for popcorn, and $4+ for a large drink, theaters repeatedly claim that they aren't making enough money, hence the need to show 30- and 60-second advertisements before each film.

Ah, commercialism. Isn't it grand? If you agree – if you don't mind advertisements enveloping every corner of the world – then maybe Amazon has made the right decision. If not, however, consumers would be wise to spend the extra $25 and buy the original Kindle.
Whatever you decide, your next Kindle purchase is likely to impact the publishing industry for many years to come. Remember that.

Brian wrote: "I saw the following article this morning..."

I didn't think much of this news until the line, "the day will come when Amazon expects us to accept them from every Kindle available." I can absolutely see that happening, and that's worrisome.

I choose not to worry about Amazon putting this into every kindle until it happens. I suspect an ad free kindle will always be an option and worrying otherwise is just...worrying.

We're slowly sliding into two primary transaction systems, as the Internet becomes more prevalent. The first is this advertising discount system. The second is the micro transaction method. Neither is very satisfying for end users. It's becoming harder and harder to avoid them. What shocks me is that the discount is so small for how intrusive it is. When purchasing something so expensive, $25 just doesn't seem all that much an enticement.

The next step, once ads are in is for it to start tracking book purchases and tailoring the displayed ads to the contents of the Kindle.

Penny Arcade did a nice strip about it. http://www.penny-arcade.com/comic/201...

Anthony wrote: "What shocks me is that the discount is so small for how intrusive it is. When purchasing something so expensive, $25 just doesn't seem all that much an enticement."

I agree. $25 is a small price to pay. My money will more than likely always go to the ad free version. But I suppose for those who find the original price too steep, this gives them a cheaper alternative to enter the market.

What would really be bad is if one day they put advertisement in-between some page turns. I doubt that would ever happen, but talk about emersion breaking.

Ads on the lock screen and menu wouldn't bother me that much, and for a bigger discount (maybe, say, 50 bucks off?) I'd probably even pick one up. I agree that 25 bucks just isn't a big enough incentive for something that's going to be staring back at you from the nightstand every evening.

I'm typically ok with ads - especially when they don't directly interfere with the content (these wouldn't).

However - I think Amazon got it wrong. The ads should offset the price of the content (and therefore benefit the author), not the device. Google AdSense rewards the content producer, not the company that made the PC you're browsing on.

Sounds like something easily avoided with rooting.

Dennis wrote: "Sounds like something easily avoided with rooting."

In Australia, pretty much anything unpleasant is easily avoided with rooting ;)

Dennis wrote: "Sounds like something easily avoided with rooting."

I was thinking the same thing especially for people that don't buy from the Amazon store. I'm sure there will be a way to flash the firmware back to a regular wifi Kindle.