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Originally Posted by HoraceWimp
Whilst it is entirely your prerogative to believe whatever you want to, I would disagree somewhat that there is no evidence to suggest that Amazon are not engaging in the practice of predatory pricing with the distinct intention of putting competitors out of business. It appears I am not the only one who seems to think this:
With the launch of the Kindle, Amazon promoted a low baseline price of $9.99 for most e-books. That meant that Amazon was selling virtually all newly published e-books at a loss. For example: A new book with a hardcover list price of $29.95 would be given an e-book price of $23.95 — 20 percent less to account for the publisher’s savings in printing, binding and distribution. The publisher would sell that e-book to Amazon for $12, and Amazon would retail it for $9.99, taking a $2 loss.
Why would Amazon do this? Observers have proposed several motives. Perhaps Amazon aimed to entice heavy readers to the newfangled Kindle; the customer could tell herself she’d make up the cost of the device in savings on the books themselves. Others have suggested that cheap e-books were loss leaders that drew customers back to Amazon over and over again, presumably so they’d go on to purchase high-margin items like TVs.
The most popular theory by far holds that Amazon intended from the start to totally dominate the e-book marketplace. By using its wealth to subsidize the sale of e-books at a loss, it could drive any competitors out of the market. Bricks-and-mortar chains like Barnes and Noble and online start-ups like Kobo (both of which would introduce their own e-reader devices) or device-neutral rivals like Google would simply not be willing or able to bleed cash as long as Amazon could. And because the Kindle is a “closed platform” — Kindle e-books can only be read on Kindle devices or apps — the more Kindle e-books a customer owned, the more reluctant she’d be to switch to a different device.
Source: http://www.salon.com/2013/07/01/ever...ook_price_war/ |
That Salon article is nonsense:
Revisionist History - Salon & Amazon's Evil eBook Motives
You can't base a model of the ebook market off of a single ebook:
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It's simply not possible to model a complex system with millions of variables by using a single data point. To do so would be to oversimplify the complexities of the ebook market as a system to the point that the argument has no relevance.
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