Quote:
Originally Posted by murraypaul
But the Agency model wasn't introduced until April 2010, so I'm not sure what the relevance is?
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The relevance is that Amazon did not set prices that low, and decide to lose money on e-books, to drive out the competition. They had limited to no competition. They wanted to grow their user base as quickly as possible but they were not trying to take out BN or Kobo.
Since many of the folks who strongly dislike Amazon like to point to the evil side of Amazon (I still maintain businesses are not good or evil, they are out to maximize profit) I wanted to point out that the pricing that the Publishers objected to was not an effort to sink anyone. It was an effort to launch the Kindle.
The $9.99 price point did not apply to all books, only bestsellers were guarenteed at that price point. There were books priced over that, people would complain about that in topics and have folks point to the not so fine print that said only bestsellers were guarenteed at the $9.99 price point.
When BN entered the market, they could have adopted the same price points and competed with Amazon. They would take the initial hits that Amazon did in order to carve out a piece of the market. As far as I know, there was nothing in Amazon's price points that would have prevented BN or Kobo from competing with Amazon regarding the pricing of e-books. So I don't buy the argument that Agency Pricing leveled the playing field and allowed BN and Kobo into the game. I could be wrong, it happens more regularly then I would like to admit, but unless someone can point to a document that says BN and Kobo would have had to charge more then Amazon, I fail to see how Amazon's pricing would have prevented them from gaining a foothold in the e-reader market.
It might have hurt more but the Nook and Kobo would have been able to compete.