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Originally Posted by Andrew H.
No, it was designed to get people to buy e-book readers in the first place. Amazon made e-readers mainstream by providing both an e-reader and a well-stocked store. That's what gave them their initial 90% marketshare - the fact that there was no real competition.
And note that the $9.99 price was applied to NY times bestsellers - a group of about 40 books out of the million or so books offered.
The Nook was the first real competition to the Kindle, using a similar model plus (initially) cheaper hardware prices. The Nook quickly took about 1/4 of the market. By the time the iPad was introduced, Amazon was down to about 65% of the US e-book market. Note that agency pricing hasn't really reduced Amazon's marketshare (it may be 60% now), but it has driven a lot of independent competitors out of business.
Apple's claim that they were fighting an evil monopoly is basically just self-serving hot air. While I think it might be more difficult to pin price fixing on Apple as opposed to the publishers, they certainly weren't doing consumers any favors.
They would cost exactly the same. If Amazon (or any company) is able to successfully get 90% of the market by charging low prices, they aren't going to start charging high prices and lose market share.
There is this tinfoil-hat conspiracy holding that it's bad for a company to offer low prices because then they will outcompete the competition and, when they are gone, raise prices. However, this *never* happens. People have been claiming this about Walmart for decades, and we're still waiting for them to raise prices.
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Most of the business press disagrees with your version of events and do trace Amazon's sharp decline in market share to the advent of agency pricing. They also expect amazon to regain market share at th expense of everyone else in the next 2 years. I'm going to go with the consensus on this.
Walmart has financially strong competitors like Target and Tesco to deal with. BN , Amazon's biggest competitor, isn't financially strong at all and may go bankrupt like Borders. If that happens, expect the terms of the settlement to be revisited.
Amazon will at least first do what Walmart has been doing and press down on suppliers margins. First publishers and then authors will lose money. According to Mike Shatzkin, consumers are likely to see lower prices and less quality nonfiction and fiction . We'll see a sort of Smashwordsification of the book market. Great if you like that sort of thing I guess.
Everyone But Amazon will simply grit their teeth and hold on for the next 2 years and then return to full on agency pricing and then deal with a bigger and more powerful Amazon then..