Quote:
Originally Posted by shalym
What "gross losses" are you talking about? Are you saying that Amazon loses massive amounts of money on ebooks? Even in the days before the price fix 6 I don't believe that was the case.
Shari
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It wasn't and it isn't.
The DOJ has made it abundantly clear that Amazon does *not* lose money on ebooks. They merely use modern grocery-store basket-pricing so that while they have from time to time sold *specific titles* at a loss, on paper, that paper loss comes from other ebook profits and their net ebook revenue has always been positive. Strongly positive by most indications. They *aren't* buying market share in search of market power, they merely accrue market poiwer through market effects and industry leader advantage. Both nice and legal and a whole lot cheaper than bleeding for profitless market share.
What they do isn't even a traditional loss-leader because loss-leaders are products that always sell at a loss (like the Baen library titles) while Amazon discount losses are temporary; they don't always discount the same titles but rather rotate the discounts as a *promotional* tool.
"Amazon loses money on ebooks" is an urban legend meant to scare some and comfort others but like most legends it is far from truth.
(Even B&N, with higher costs and less internal eficiency--to say nothing of lower market share/sales volume--has made it clear they make money off ebooks. It is everywhere else that they lose money.)