Ad Free product cost and Supply Chain Impact

An article by Michael Schulder in CNN.com (Dec 29, 2011 http://www.cnn.com/2011/12/29/tech/gaming-gadgets/kindle-ads-schulder/index.html?hpt=hp_bn6) describes the choice between an ad free Kindle for $ 109 and one with ads for $ 79. Clearly Amazon is estimating the ad related revenues as $ 30 over the life of the product. Now imagine similar opportunities for refrigerators, cars, washing machines, stoves etc – as each of them become internet connected. How might the various supply chain participants in these supply chains share in the ad revenue and adjust product price for these products ? How would product designs have to adjust to increase the consumer’s dependence on the internet to use these products ? As internet enabled products become ubiquitous, would we expect the benefit of the associated ads to decrease or increase ?

 

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About aviyer2010

Professor
This entry was posted in Ecommerce, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

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