Quote:
Originally Posted by DMcCunney
You are asking me to believe Amazon either sells the Kindle edition of a new hardcover at cost or takes a loss on each sale when it sells at $9.99.
Sorry, I don't believe that. Why on earth should it?
A brick and mortar retailer might have an incentive to do that on selected titles to get people into the store, where they might buy other things as well. (That happened with the Harry Potter titles.) Amazon has no brick and mortar store to want to entice people into, and no incentive to play the "loss leader" game. You can assume Amazon makes money on Kindle sales, and pays the publisher less than what they charge you.
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Amazon
does have a very good reason to run loss-leaders (in the short to medium term), to build market share.
Once someone has bought a Kindle, the only type of DRM they can use directly (without stripping) is Amazon DRM. The device has an automatic way to buy from the Amazon store. Whispernet is designed to deliver books from Amazon. They are selling a platform, not just either a device or ebooks.
Look at the situation in the UK, Amazon have just arrived and are simply buying marketshare by offering books much cheaper than the established ePub stores. Every Kindle sold is a customer taken away from those stores forever.
Steven Fry's new autobiography is £20 list/£9 Amazon for the hardback, £19.57 list/£6.30 Amazon for the Kindle version. At Waterstones it is £11 for the hardback, £14 for the ePub.
Tony Blair's new autobiography is £25 list/£12.50 Amazon for the hardback, £25 list/£7 for the Kindle version. At Waterstones it is £14 for the hardback, £15 for the ePub.
The Girl with the Dragon Tattoo is £4 paperback, £2.68 Kindle at Amazon. At Waterstones it is £4 for the paperback, £5.50 for the ePub.
Eat Pray Love is £3.27 paperback, £3.11 Kindle at Amazon. At Waterstones it is £4.50 for the paperback, £8.85 for the ePub.
The Kindle editions are not just cheaper than the ePub, they are half the price, significantly more than the discount for the physical books.
And in each case, Waterstones is charging more for the eBook than the physical one, and Amazon is charging less.
Edit: To show that I wasn't cherry-picking results from Amazon, I went to the Waterstones ePub main page and checked the bestseller/recommends/favourites/new and bestselling sections, 22 books in all. Every single one is cheaper at Amazon, and in general significantly so, not just a couple of pence.