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Summary:

Three recent filings by Amazon (NSDQ: AMZN) at the U.S. Patent and Trademark Office indicate that the company is thinking about additional w…

Ads In Books

Three recent filings by Amazon (NSDQ: AMZN) at the U.S. Patent and Trademark Office indicate that the company is thinking about additional ways to monetize its print and electronic book sales by possibly including ads in books and by creating some sort of Kindle-related social network. The filings:

Advertising in e-books: Amazon was granted a patent last week for a method that would include ads in content that people download for their e-books. Ads could appear on entire pages or in the margins of pages (See image to the left). The patent also says that ads could be tailored to the “profile of the consumer” or could correspond to the content on a page.

Advertising in print books: Another Amazon patent — also filed last week — talks about a similar method of including ads in “on-demand printed content.” Amazon provides various on-demand publishing services. (Via MediaPost)

Creating a Kindle social network: A trademark application Amazon filed on June 26 for the word “Kindle” mentions “social networking” as a possible use for the brand name. From the description of ‘Kindle': “Online social networking services; providing a website for the purposes of social networking; providing online computer databases and online searchable databases in the field of social networking; providing information in the field of social networking.” There’s no mention of advertising per say but it’s likely that a social network would include ads of some sort. (Via Seattle-area tech site TechFlash).

If Amazon did go ahead and include ads in books, the filings imply that Amazon would make the books free or discount them — some consolation for those not used to seeing ads in their texts. Both patent filings explain, using identical language, that with books the content is fixed and they are therefore not “adapted to modern marketing.” They then go on to make a comparison to “‘free’ Internet sites are typically supported by advertisements.”

Cutting the price of e-book titles would contrast with the view among some analysts that Amazon will actually have to hike the price of its e-books in order to improve economics for both publishers and Amazon. Maybe including ads could help offset that need. A spokeswoman said the company did not comment on patent applications.

  1. "…the view among some analysts that Amazon will actually have to hike the price of its e-books in order to improve economics for both publishers and Amazon."

    WTF? Forget the price of hardcover; paperbacks sell in airport shops — the most expensive channel extant — for about $10. That's after they've manufactured, packaged, warehoused and shipped them, distributors have marked them up and the retailer has marked them up. Kindle eliminates a bunch of those steps and distributes the book electronically at zero distribution cost.

    How can the publisher and they not make money at $10/book? This one doesn't pass the sniff test.

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  2. Joseph Tartakoff Wednesday, July 8, 2009

    Hi Mike,

    Thanks for the comment. You might want to look at this post I did a few weeks ago which goes through some of the numbers on why the average price needs to be raised to make e-books almost as profitable as hardbacks or paperbacks: http://paidcontent.org/article/419-analysts-kindle-book-price-hikes-are-coming/

    Joe Tartakoff, paidContent.org

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  3. I can see the rationale for this, but this is going to be a tough sell. First of all, most book contracts with authors have a provision that prohibits any ads in books. Changing that will be very difficult. Second, unless you make absurd assumptions about adveritising CPMs,, there is simply no way that advertising revenue can offset a dramatic decrease in purchase price. Third, I think most advertisers will be very skeptical about the effectiveness and value of this sort of advertising. Good luck to them!

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