Amazon had a busy week - new tablet, new kindles, and a new, agressive pricing strategy for both. Marco Arment and John Gruber both have pretty in-depth analyses of what this new pricing means and how much of a change it is from Amazon’s previous Kindle strategy. In the past, you could buy a Kindle 3 or, if you wanted to save a few bucks on it, buy one with advertisements that display on the screensaver. Within the new pricing model, you buy the Kindle with “Special Offers” or, if you don’t minding spending a few bucks on it, buy one with no ads. It’s a shift in terms of marketing strategy in both the title (“Advertisements” are now “Special Offers”) and pricing (the cheaper, ad-based Kindle is the default).
Marco Arment has been pretty vocal in criticizing this shift - he paid the extra $40 for the Kindle with “self-respect.” However, it’s a viable competitive strategy and I think, as John Gruber has pointed out, it fits with Amazon’s ethos of providing a cheap product and making money off content.
The bottom line is, “how will this affect consumers?”
The answer is “positively.”
This isn’t just some random, remnant ad network selling “Discount Viagra Mattresses” - this is Amazon. They’re collecting information about every book you read, every item you browse, and every web page you visit. This is incredibly creepy, but it means that the “Special Offers” you see are going to be relevant to your interests.
I use GMail and that means I see Google Ads all the time. I actually click them sometimes because they’re relevant.
As a recent University graduate paying for his wife’s grad school tuition, saving $40 actually means a lot to me. I think it’ll mean a lot to other consumers, too.
So while I certainly prefer not to see ads, I think Amazon’s “Special Offers” are pretty decent from a consumer perspective. They’re unobtrusive, relevant, and avoidable if you want to pay extra. I probably won’t. (Whenever they start shipping to Canada, that is.)
I may be the first person accused of “Amazon Fanboyism.”
Fire away, Internet.