Fri, 12 Oct 12 at 15:31 |
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Amazon Makes NO Profit On Kindles
Isn’t it the other way around?
Jeff Bezos, famously tight-lipped, has just confirmed what everyone knows: Amazon makes zero profit selling Kindles.
“We sell the hardware at our cost, so it is break-even on the hardware,” Jeff Bezos, CEO of Amazon, told the BBC.
Competing e-reader manufacturers may find fault with this strategy (indeed, the World Trade Organization labels such action “dumping”). On the other hand, the Justice Department apparently believes that “low cost to the consumer” is a value to trump all others.
The argument is bootless. I’d rather point out that what is good for Amazon is not so great for authors: if Amazon can’t make money on the device, then it has to do so on the content. Since they’ve already driven e-book prices remarkably low, and electronic distribution is essentially free at the margin, where might this profit come from…? Skinning the writers, that’s where.
Maybe I’m missing something, but it seems like our emergent New Publishing model mostly just shifts the profits around: away from writers, to investors.
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