This past week Amazon announced it would be selling an ad-supported version of the Kindle. For $114 ($25 less than the traditional model) you can get an a version of the eReader with “advertisements on the bottom of the device’s home page and on its screen savers.”
Why the low discount?
$25 doesn’t seem like tremendous discount, but it’s important to realize the Kindle wasn’t a terribly expensive device to begin with. $25 knocks 18% off the total price of the eReader (it’s typically $139) that’s not such a horrible discount.
What about other devices?
While $25 probably isn’t enough for me to want to deal with ads on a $140 Kindle, an 18% discount on other devices might be big enough for me to bite. What if you could pick up a $600 tablet for $492? Or a $1500 computer for $1230? When the devices get more expensive the discount gets larger, and starts to seem like a better deal.
Ad-supported electronics are an interesting concept. Theoretically, everyone still gets the same amount of money (maybe even more when it comes to manufacturers) and consumers can get the devices they want for a more affordable price, with a little ad annoyance while they’re using them.
What’s the right price point?
What would it take for you to be willing to buy a device with ads? Is an 18% discount enough for a few home page and screensaver ads? What about a 25% discount? Or 50%? What sort of devices would you be willing to deal with ads on?