I resisted getting too cozy with Amazon for a lot of years.
But the truth is, they are probably the most innovative marketer of intellectual property of all time. The business model described above SOUNDS like a fairly good deal for the independent author, and certainly a good deal for the consumer. If they can make money while doing it, more power to them!
I am a photographer, the traditional methods of marketing photos aren't working all that well for me. (I understand that it could be that I just suck as a photographer) If they came up with some new ideas for marketing art photos, I'd certainly be willing to listen.
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