It started with Amazon discounting
e-books as loss leaders to spur the adoption of e-readers (Kindles, specifically).
Not exact matches
That's a problem for book publishers, considering
e-books are the fastest growing segment of the publishing industry — and Amazon has a reputation for driving down the cost of
e-books, treating them
as loss leaders as a way to sell more Kindle devices.
If Stromberg says the model is working — and companies like Oyster can treat their
e-book inventory
as loss -
leaders — it may be because the models work like gym memberships: everyone pays, but few actually use the facilities.
I don't think
e-Book subscription systems, like Kindle Unlimited is sustainable, except
as loss -
leaders.
But expect that if
e-books come to be treated
as main sources of publisher revenue rather than
as loss leaders, or
as sub-rights-books subsidized by the print versions: Expect
e-book prices to rise.
Amazon had pretty much cornered the
e-book market by using either the Kindle, or the content, or both (depending on who you talk to)
as a
loss leader.