FYI Amazon intends to generate revenue from both the reader and the ebook sales, so the "razor blade" analogy doesn't apply.
I don't think that model would go over very well anyway. It might drop the reader costs, but would require higher costs for the ebooks. I doubt anyone would be psyched over $15 ebooks, even if the reader is less expensive.
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Originally Posted by GA Russel
An eBook costs nothing to manufacture after the first one is made.
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Wrong. You have all kinds of ongoing costs -- website maintenance, server storage, bandwidth, payment processing, customer service, database issues, and of course staff to keep everything going. Not to mention that you have to pay the royalties to the publisher.
Amazon has already stated that some of the $9.99 ebooks are loss leaders, by the way. The prevailing theory is that sooner or later, Amazon (and perhaps other ebook retailers, who are also pushing the $9.99 price point) are going to turn the screws on the publishers and demand lower wholesale prices on eBooks.
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Originally Posted by GA Russel
My point is that if Sony and Amazon are going to link their readers to a particular store with DRM, they should make it obvious to the public why their product should be chosen instead of their competitors. And I suggest that the way to do that is to offer so many books in the package deal that the reader will seem free.
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With all due respect, now we know why you aren't the CEO of a major retailer. Did you run a dot-com in the mid 90s or something?
Given the fact that Amazon has a fairly expensive reader and has still managed to overtake Sony in the US market, I hardly see why they (or anyone else) would want to utterly eviscerate their revenues in order to acquire new customers.