For some, the idea of advertising in literature is anathema; it contaminates the sacred space of art-writing. The publishing business, literary historians, and writers themselves have long gone to great lengths to keep the business of books outside the realm of literary discourse. It is devilishly difficult to know much, if anything, about the economics of literature: how much writers are paid, how many copies a particular book sells, and the other ledger items of publishing seem to be actively obscured. This has, in turn, created the illusion that money and literature are somehow separate.
The division of "writing" from the literary-publishing economy has been a real obstacle for the ongoing viability of the publishing business. Thinking that literature exists beyond the pale of economics allows and excuses a variety of practices and beliefs that are detrimental to the maintenance of a healthy, diverse literary economy. For example, in what other business can you borrow, subsidized by state and local government, the products of an entire industry? That literature exists in an imaginary space outside of financial pressures makes it even more subject to economic forces.
So that's one reason to be interested in the new ad-subsidized Kindle. When you now flip on your Kindle to read the new David Mitchell, you see a Buick ad first; it will be difficult to maintain an artificial separation of the business of writing with the texts themselves. Some argue that introducing advertising into literature will cheapen it. I would argue just the opposite; commercializing the literary space will reinforce the idea that that space has financial value, just as the annual ritual of tracking how much a 30-second spot during the Super Bowl costs reaffirms the value of the Super Bowl.
I think advertising in e-readers is exciting for another reason; it has the potential to open up channels of discovery. Book advertising is notoriously difficult, to the point that most people don't see any book advertising in their daily life. That "word-of-mouth" is the most powerful force in the industry speaks to the ineffectiveness of literary publicity. That said, the kind of reader-centric, targeted opportunity that integrated literary advertising presents is unprecedented.
Say I am the publisher (or, increasingly, author) of a novel about race relations in the South. Buying and crafting a specific ad that would appear to the tens of thousands of people reading Kate Stockett's The Help on their e-reader would seem outrageously appealing. From a reader's point of view, this might even be helpful; finding titles like a book you are currently enjoying is usually a task you have to take to your local bookseller, as long as they know what they are talking about. For most readers, this is a friction point that will not be surmounted. In this new scenario, a sample of the advertised, related work is just a couple of clicks away. (And if you don't think this can work, remember that Google's empire is built on accessible, contextual advertising.)
It is somewhat unfortunate that this effort is starting with Amazon, since most interested in publishing look upon them warily. I don't particularly care if this new Kindle sells, but I do think that it is in the best interest of publishing if something like it succeeds.
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