Quote:
Originally Posted by leebase
The publishers saw the hurt coming and acted to head it off. The make money selling books for $25. Amazon was putting their customers out of business with their $9.99 price. Once Amazon put the competition out of business, destroys the market for hard back books, you think Amazon was going to continue giving publishers $12.50 for books they sell for $9.99?
No, Amazon would then say that the publishers would get $7 or so, and there'd be now way to stop them.
Lee
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You've got two very powerful forces who were at play there, but Amazon wasn't an irresistible force in that equation. Under the prior, list price pricing model, Amazon was obligated to pay the publishers the wholesale cost of whatever they sold, regardless what Amazon sold the products for, i.e. some contractually agreed percent of the list price. If that was $12.50 and Amazon wanted to eat $2.51 to sell for $9.99, the publishers were still getting $12.50. Under that model, Amazon could not have said No, we're only paying you $7 now. The publishers had (and even today still have) the upper hand because they control the creation of the product.
Both Amazon and the publishers would be hurt if they don't cooperate. Ultimately both sides want to make the most money they can, so they find ways to work together.
Publishers are facing a lose of power -- but it's as the share of revenue from ebooks rises, and that power they might lose will not be not flowing to Amazon, but to authors and others who can do the same things publishers do with ebooks (risk money up front for marketing, for instance). If ebooks become the dominant money making format and paper isn't a big issue, then authors will have a lot of choices, and publishers will have to scramble to show they're the best place to provide those other services. Good competition.
Monopolies are usually bad, and lucikly in this case, I don't see any player being able to hold a monopoly in an ebook-dominated world. On the contrary, I think we're facing an explosive blossoming in (e)books as large or larger than Gutenberg's printing press.
--Andrew Burt
My ebooks