I see that Amazon has introduced its second new Kindle this year--this one at $489. For so many reasons, this is a business that makes less and less sense. As many people have pointed out, this is a product for which the marginal cost is essentially zero: once you've digitalized the book, you don't have to pay for anything except a throb on the ethernet--no ink, no paper, no warehouse, no shipping, zip. Someone has conned Yglesias into reporting "that the post-cleanup conversion process is sufficiently expensive that, at this point, publishers are generally losing money on their Kindle sales." Unless they are digitalizing by carving with obsidian chips on sandstone, this seems vastly unlikely to me. But if true, it raises the larger question--why charge so much for the support system. My friend in the book biz points out--the Kindle is basically a razor, where you want to give away the support system so's you can make it on extra sales. At zero fixed cost (to the customer), you'd sell enough copies of almost anything to justify the digitalizing.
Free Kindles for all! What a program! Of course I never understood Amazon's business model in the first place.
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