It is no secret that Amazon has been investing a lot of money in building its own digital content empire. The company is not making a whole lot of money when people purchase Kindles. Instead, it relies on Kindle owners buying a ton of content. Some investors are not a fan of this approach by Amazon. But the company won’t be changing its approach anytime soon:
Our heavy investments in Prime, AWS, Kindle, digital media, and customer experience in general strike some as too generous, shareholder indifferent, or even at odds with being a for-profit company. “Amazon, as far as I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers,” writes one outside observer… More fundamentally, I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.
explained Jeff Bezos in his letter to shareholders. This is the approach that has made Amazon so successful. Considering that Amazon has just dropped its Kindle Fire prices, it is expected to stay even more aggressive in the upcoming months and years.