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It wasn't that Sony was failing. It was that Sony realized that using LRX wasn't a good idea.
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Exactly. Sony realized going alone was a bad idea. Neither did they have amazon's market share to allow for such stupidity. They switched to ePub. Having more than one format is a bad idea.
More work for polishers, customers can't buy where they want.
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Amazon has the best bookstore, so the issue is nowhere near as important
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It is. To people who feel like changing e-readers. Or people wanting books that are not on amazon. (Yes, there are lots of books amazon don't have. While not everyone cares about books in French, i certainly do.)
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Switching DRM is not free. Again, why would Amazon voluntarily give away 20-25c per sale to another company?
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That's the price adobe asks ? Bah, ditch the drm !