I've never thought ads in ebooks would make a viable business model, but sometime next year that idea is going to be put to the test. A new startup in Germany is building an ad-supported platform, and they plan to launch in the middle of 2014.
Readfy, which is affiliated with the Dusseldorf-based 1stMover startup incubator, was founded in July 2013 by Felix Bauchspiess. The startup had been in stealth mode until earlier this week when Bauchspiess was interviewed by a German tech blog.
According to MobileBranche.de, Readfy is going to launch in a more open beta test next year with 25,000 titles. Bauchspiess wants Readfy to offer a Spotify for ebooks that is free for the end user, and not supported by directly charging users for access (a la Netflix). The goal is to let users read as much as they want and pay publishers from the ad revenues.
Readfy is currently testing their platform with a small, closed beta. They're working on both the ad network component as well as social reading apps for Android, iPhone, and iPad. They launch in Germany next year, and they are exploring options for an international expansion at a later date.
Will they succeed? We'll have to wait and see because at this point there is little data to argue either way.What little info I have comes from app creators, most of whom say that ad revenues are not a sustainable business model. And Amazon, which has been selling their hardware with an ad-supported option since mid-2011, has never shared their figures.
And when it comes to ebooks, this model is not new; Bookboon has been publishing free ebooks since 2011. Of course, that firm doesn't have to pay anyone other than their authors, so they have a slight advantage over Readfy. Also, Bookboon has never revealed their revenue figures (or how much they are paying authors), so they are not exactly a strong argument in favor of an ad-supported business model.
If nothing else Readfy is going to be facing 3 problems that Bookboon, with their internally generated ebooks, manages to avoid. Readfy has to bring in the right amount of users, advertisers, and content, and each one of those could doom this effort if they're not meticulous.
Edit: And as a reader reminded me in the comments, Readfy is also going to have to compete with existing free ebooks, including both public domain as well as new titles sold at no cost. There's more free reading material than anyone can read in a lifetime, and that raises questions as to whether there is really a need for ad-subsidized ebooks.