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Ads on the Amazon Kindle has people worried

Author: Barbara Coswell

Amazon is in a position to ride the wave of revolution in the print industry, thanks to its Kindle system. Once the $114 Kindle with Special Offers ships May 3, Amazon should improve its 60 percent share in the e-reader market. Yet there's a catch - those Special Offers are advertisements, a move that has several worried about the shape of the reading experience to come.

Kindle price cut with advertisements



The price of the Amazon Kindle has fallen a few times since the first generation was introduced at $399 in 2007. In order to try and compete with the iPad in the e-reader market, the ads were put on it this time in the price deduction. The Kindle with Special Offers is slated to ship May 3. Target and Best Purchase will sell the ad-supported version of the Kindle 3 in stores at that time.

It is "chicken in every pot" decision made with the $114 kindle with Special Offers according to Jeff Bezos, the Amazon CEO and founder:

"We're working hard to make sure that anyone who wants a Kindle can afford one," he said via a statement.


An ad-based kindle might bright out typical concerns. These concerns were displayed as responders on a Christian Science Monitor article on price cuts. One reader argues for a free ad-based Kindle with $0.99 books, however that reflects another thorny issue regarding the price of electronic books. The $25 discount is not enough, according to some people. Most experts' say it is okay though since the advertisements only come up on the bottom of the home screen and on the screen saver.

"It's very important that we didn't interfere with the reading experience," Kindle director Jay Marine told the Associated Press.


The price is needed



TechCrunch predicts the $114 Amazon Kindle with Special Features is an intermediary step toward a $99 Kindle for Christmas 2011. Traditional marketing psychology suggests the ".99" price point is a magic number.

The Columbia Business School in New York did research on this though. It showed this might not be the case anymore. A dollar plus approach, adding a penny, was more effective than the dollar minus approach, taking a penny away. The Columbia study showed this clearly. Dollar plus brands seemed less manipulative to customers which is why the dollar plus method sold 3 percent more.

Citations



Christian Science Monitor


csmonitor.com/Books/chapter-and-verse/2011/0413/Will-readers-accept-ads-in-exchange-for-a-cheaper-Kindle



Columbia Business School


gsb.columbia.edu/ideasatwork/researchbriefs/7314376?&top.region=main



Knowing and Making


knowingandmaking.com/2011/04/new-research-99-no-longer-optimal-for.html



TechCrunch


techcrunch.com/2011/04/11/amazon-kindle-99/



Kindle sales tripled after last price drop


youtu.be/PaAFm_fZQ2A


Resource for this article - Amazon to release ad-supported Kindle for $114 by MoneyBlogNewz.
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