Of course they were profitable, it was mainly the best sellers that they sold at cost or at a loss. The DoJ wants to make sure that Amazon doesn't abuse it by selling a publishers entire ebook lineup at cost or for a loss.
I believe it is more complicated than this, and will doubt the DOJ until they lay AMZN's eBook division financials to really see. Amazon, as a company, rarely posts a profit, so skepticism about the eBook division's profitability should be warranted until they prove otherwise. As it stands today, we only have the word of the DOJ saying that Amazon's eBook business is profitable.
It's complicated as isn't Kindle hardware part of Amazon's eBook division? Kindle hardware is quite expensive relative to eBooks, and a small slice of margin can cover a loss in the sales of eBooks themselves. So, I really need a proper accounting to corroborate what the DOJ is saying.
The publishers' problem isn't with the profitability of a retailer's profitability selling their eBooks. It's managing their transition from paper books, their primary source of revenue, to a digital one. Selling best sellers at loss hurt hard cover sales. Amazon can manage to zero or slight profitability, but they are going to kill the publishers and B&M along the way doing this.
Obviously, like I said earlier, Apple can just employ the same model Amazon is using, the model by which the DOJ wants the eBook business to be run, and run at break even. Assuming the publishers are willing to do that deal with Apple and Apple is willing to break even.
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Quote:
Originally Posted by dasanman69
Of course they were profitable, it was mainly the best sellers that they sold at cost or at a loss. The DoJ wants to make sure that Amazon doesn't abuse it by selling a publishers entire ebook lineup at cost or for a loss.
I believe it is more complicated than this, and will doubt the DOJ until they lay AMZN's eBook division financials to really see. Amazon, as a company, rarely posts a profit, so skepticism about the eBook division's profitability should be warranted until they prove otherwise. As it stands today, we only have the word of the DOJ saying that Amazon's eBook business is profitable.
It's complicated as isn't Kindle hardware part of Amazon's eBook division? Kindle hardware is quite expensive relative to eBooks, and a small slice of margin can cover a loss in the sales of eBooks themselves. So, I really need a proper accounting to corroborate what the DOJ is saying.
The publishers' problem isn't with the profitability of a retailer's profitability selling their eBooks. It's managing their transition from paper books, their primary source of revenue, to a digital one. Selling best sellers at loss hurt hard cover sales. Amazon can manage to zero or slight profitability, but they are going to kill the publishers and B&M along the way doing this.
Obviously, like I said earlier, Apple can just employ the same model Amazon is using, the model by which the DOJ wants the eBook business to be run, and run at break even. Assuming the publishers are willing to do that deal with Apple and Apple is willing to break even.