Lots of attention yesterday to Jeff Bezos comment that Amazon was upping its Kindle Fire production by millions of units based on strong pre-orders. Equally interesting were comments from CFO Thomas Szkutak about how Amazon's business model works for the Kindle ecosystem:
And [when] we think about the economics of the Kindle business, we think about the totality. We think of the lifetime value of those devices. So we’re not just thinking about the economics of the device and the accessories. We think about the content. We are selling quite a bit of Special Offers devices which includes ads. We’re thinking about the advertisements and those Special Offers and those lifetime value[s].
-AllThingsD, October 26, 2011
That stands in stark contrast to what Bezos used to say, in the days before publishers (and Apple) imposed big price hikes on popular ebooks via agency pricing.
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