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Amazon recently reported one million Kindles are sold per week currently. Alone, that is a huge market available to publishers instead of attempting to sell overpriced hardcovers to a changing market and demographic.
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The very fact that there is a huge and growing demand for devices dedicated to the reading of ebooks undercuts the argument that agency pricing is depressing the market for ebooks. The fact that the ebook bestseller lists are populated with agency priced ebooks pretty much finishes off the argument altogether.
Agency pricing actually helps indie authors by allowing them to compete on price with established authors. Even so, very few indie authors sell as well as established authors. You may hate to admit this, but the average consumer apparently is quite willing to pay a premium for established authors.