Silicon Investor (SI) -- The First Internet Community

4/16/2012 12:13:30 PM

>>I think that's the point. If publishers take the option to eat margin away from Amazon by forcing them to switch to the agency model, prices will tend to rise. Amazon makes more money per book, but they no longer get to use books as a loss leader to sell kindles and undercut hardcovers.<<

I still don't understand Amazon's strategy here. If they sell Kindles at a loss in order to sell more ebooks, and they sell the ebooks at a loss in order to sell more Kindles, at what point do their margins improve?