Is Amazon About To Sell Adverts In E-books?

While the news media wrestles with paywalls, micropayments and subscriptions after 15 years of ‘free’, Amazon looks set to add another revenue stream to its potentially lucrative e-books business.

A big hat tip goes to David Weir writing on the BNET Media blog who has spotted that the online retail giant has applied for a patent that would see it inserting adverts into e-books.

So coupled with the cost of the Kindle reader (the latest generation of which retails for $359 on, well, Amazon.com) and the price of each book download, we may soon see the company making money from ads. Contextual advertising, we presume. And because the e-books will be ”generated” on-demand, the advertising can be bang up to date. 

The application, which rests with the US Patent & Trademark Office and was filed last Thursday, is suitably titled On-demand generating e-book content with advertising and states explicitly:

as part of printing documents in an on-demand fashion, the on-demand printed content provides the opportunity to incorporate advertisements, as well as other subject matter, in an on-demand printed document.

Weir says the advertising plan raises lots of big questions, such as:

Does Amazon plan to share ad revenue with content creators, or will be forced to do so via the courts — in our example, with the Hemingway estate?

It’s one of many issues to ponder.

For example, Amazon may chose to change its business model in future, selling its Kindle reader with lower or zero margins in an effort to grow the market which in turn will help it to sell more e-books (and more advertising). This, in essence, is the games console model.

Which begs another question: what’s the news media model? Anyone?