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And with ebooks, they can't. They don't know if the person will be reading on a Kindle, a PC, a Blackberry, an iPad, or a Kobo. If they restrict the ads to ebooks that only work on one type of hardware, they cut out a huge portion of their market. (Some who use other hardware will get the ebook anyway--and run it through DRM stripper & converters, so the ads will possibly be removed, and definitely no longer arranged as originally planned.)
The only ebook market locked to a single device is the iBookstore, and there's no indication that it's managing to compete well.
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(Shrug). So they'll tailor ads to different devices. Sorry, but I don't see this as the overwhelming technical obstacle you make this out to be. If its worth it to the advertisers and their clients, that's what they'll do. If the geeky one per cent use their hacking skills to strip out the ads , well, so be it. The something-for-nothing crowd will always be there.
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You've completely dodged the issues of pricing:
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I'm sorry, but I did discuss price. More than once. I mentioned the $5 spread between the ad-supported and premium versions of games. I mentioned that Amazon was able to discount $25 between the no ads Kindle and the KSO.
Now how much would it be worth to advertisers if an ebook displayed a splash ad every time it opened? I don't know the answer but based on the success of the KSO, it may be worth quite a bit- maybe not $25, but maybe more than $5.
Let's say its worth $5. Amazon's typical price for an ebook that's a MMPB is $7.99. Supposed it offered $2.99 for the ad-supported version, with an option to upgrade to the ad-free version for $5 more later? I'm betting SOMEBODY would take that deal, given the love of folks on the Internet for "deals" and "freebies".
I'm not the only one who thinks so, which is why I pointed you to that beta site. Now its a beta , which implies "new" , "unproven" and indeed "under construction". We won't know for a couple of months what's being offered, and we may not know for some time after whether it will work. It shows, though , that there are people who think a freemium model can work for ebooks and who are willing to put their money where their mouth is. If they succeed even a little, I think we'll see Amazon or B&N roll out their efforts.