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Amazon will knock $20 off the price of a kindle if you get the version with ads. And those only display static grayscale ads, advertisers may be willing to pay

Amazon will knock $20 off the price of a kindle if you get the version with ads. And those only display static grayscale ads, advertisers may be willing to pay more for something more invasive. Extracting $25 of value from spyware on televisions doesn't seem out of the question.

GuB-42 7y ago
Amazon doesn't make that Kindle $20 cheaper, it makes the ad-free version $20 more expensive, or at least, that's how I see it. That's more about market segmentation than the actual value of ads. Even if we assume ads are nothing more than an annoyance with $0 value, the "with ads" version may still be beneficial to Amazon. That's if people with a lower budget tolerate ads and those with a high budget don't. If they only sell the expensive ad-free version, they will lose the low-budget customers, if they sell the ad-free version at the with-ads price, they lose money from people who are ready to pay more. Ads here are just a market segmentation tool. Just like it is common for low end products to be the same as their high counterparts but with disabled features.
- Godel_unicode 7y ago
  What about your experience on the Internet leads you to believe a company would value ads at $0? Can you point to another Amazon produced product where they achieve segmentation by making the same product and then disable features on the cheap one?
  - whynaut 7y ago
    > Can you point to another Amazon produced product where they achieve segmentation by making the same product and then disable features on the cheap one? Prime video, amazon fresh. i believe the latter is no longer available outside of Prime. I think Prime shipping itself also counts here, given the changes over the years. Edit: spelling
- thw0rted 7y ago
  Hulu more than doubles their subscription price to hide ads. Do you really think that they're making less net revenue per subscription from ad-viewing users than ad-free ones?

GuB-42 7y ago

Amazon doesn't make that Kindle $20 cheaper, it makes the ad-free version $20 more expensive, or at least, that's how I see it. That's more about market segmentation than the actual value of ads. Even if we assume ads are nothing more than an annoyance with $0 value, the "with ads" version may still be beneficial to Amazon. That's if people with a lower budget tolerate ads and those with a high budget don't. If they only sell the expensive ad-free version, they will lose the low-budget customers, if they sell the ad-free version at the with-ads price, they lose money from people who are ready to pay more. Ads here are just a market segmentation tool. Just like it is common for low end products to be the same as their high counterparts but with disabled features.

Godel_unicode 7y ago
What about your experience on the Internet leads you to believe a company would value ads at $0? Can you point to another Amazon produced product where they achieve segmentation by making the same product and then disable features on the cheap one?
- whynaut 7y ago
  > Can you point to another Amazon produced product where they achieve segmentation by making the same product and then disable features on the cheap one? Prime video, amazon fresh. i believe the latter is no longer available outside of Prime. I think Prime shipping itself also counts here, given the changes over the years. Edit: spelling
thw0rted 7y ago
Hulu more than doubles their subscription price to hide ads. Do you really think that they're making less net revenue per subscription from ad-viewing users than ad-free ones?