Quote:
Originally Posted by DMcCunney
The publishers in this case aren't not allowing discounts. They are changing the terms on which they do business with retailers. The retailer can still offer a discount, but they have a lower margin to play with, and can't offer discounts as deep and make money.
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The impression we've gotten from what we've heard of the agency pricing contracts is that no, retailers are not allowed to offer discounts. They aren't paying the publishers (for example) $7 for a $10-retail-price ebook, and have $3 to take as profit or offer discounts from. They are getting 30
percent of the $10 price, which they are not allowed to touch.
Amazon was perfectly willing to sell with lower profit margins, and to lose money on some books in order to encourage people to buy other things from them.
This was not about the publishers insisting on a higher price per book -- it was about trying to prevent the public from thinking $10 was a reasonable price for an ebook. More than one publisher announced that they were very disturbed at the idea of people getting used to $10 ebooks, because then they'd start to demand them, and publishers insisted that they can't make any profit at that price.