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Originally Posted by Fbone
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I don't see $5.00 below cost.
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As the articles point out, Amazon has to pay the same wholesale price to the publishers for e-books as for print editions of those books—more or less half of the print edition price.
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It is saying that Amazon gets to pay less than half of the print edition price on some books. Maybe even the ones that are considered to be sold at a loss?
Then comes an example:
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Thus, if a hardcover book has a suggested retail price of $24.95, Amazon pays the publisher about $12.50 for the e-book version—and loses about $2.50 when it turns around and sells it for $9.99.
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Did you notice how it said "suggested retail price", and not "print edition price" like before? It is probably not the same value, as the retail price would have normally the added costs of the retailer, and as I said in my previous post, Amazon would have lower costs than other retailers.
And now it's time for conspiracy theories. I just love them
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So a year and a half ago Amazon was fighting the publishers who were powerless to stop buyers from getting ebooks at paperback values. As a result, happy customers also bought kindles to be able to enjoy cheaper books.
Fast forward a few months and there is a new price war. This time: ereaders. Amazon, sitting on top of a huge chunk of the market is able to offer competitive prices for a device that is better than most.
And just as people are wondering if Amazon can survive selling at a loss, we get Agency 5 pricing, stopping Amazon from selling cheap books. What are the buyers to do? Stop buying form Amazon in protest? Of course not. It's not Amazon's fault, they did their best. Plus, isn't the new Pearl screen just so shiny? To use it, they have to buy from Amazon.
So, is Amazon winning in a game against the publishers, or on the same side as them? Only time will tell.