[stonetools]

1. Streaming is too unreliable for reading. People read in all kinds of places with no service, including on airplanes.

And for those places, people will read books that they have downloaded, just like they watch Netflix streaming at home and watch movies they've downloaded on their laptops on airplanes. It will be another option , just like streaming and downloading movies are options. I agree with you that it will never be the ONLY option.

2. The value of streaming for e-books isn't there the way it is for music. If you want to listen to 8 hours of new music, you would need to buy 160 songs (assuming 3 minutes per song). At $1 per song, that is $160 to buy...so some sort of flat-fee subscription service might make sense.

If you want to read for 8 hours, you probably need one book (on average). At $13 for a new big 6 book, there may be some value in a subscription...but it will be less than the value music would provide, simply because the cost is less to begin with.

You could make the exact argument about movies-yet somehow, there is a flourishing movie rental/streaming market. Pricing will be key, as well as which books may be in the subscription pool. That will be worked out over time, the way it was for movies.

3. Free books in exchange for advertising won't work for tradpub books. It may work for 99c books...although people may still be resistant to ads for books, even cheap books.

Or not. I grew up with all kinds of ads in comic books and there are ads in magazines to this day. There were ads in paperbacks , too. Free, ad-supported games in which you pay to remove the ads are commonplace and widely accepted.
How the ads will be implemented is an issue. There are people who will never accept ads, no matter how they are implemented, but that's the minority. I discuss this HERE.