Quote:
Originally Posted by hansl
No doubt about that. Except that the ADEPT cost is ridiculous on a per book basis and is hardly the source of significantly higher prices.
Or is this the case which would wake up the anti-trust regulators? Personally, I think it would be best to separate DRM providers and booksellers and create competition for Adobe on the DRM provider market.
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1- Amazon has stated for years that they are willing to license Whispernet, etc to other device manufacturers but nobody has signed up. Probably because there is no money to be made selling Kindle clones. Once they moved to near-cost pricing on the hardware (responding to Nook) they make their money when people use their devices, not when they buy them. That model leaves no room for clones.
2- The Adobe tax isn't the only reason the generic ebookstores are more expensive.
The Kindle supply chain runs: publisher -> Amazon -> reader.
For the generics, it tends to go publisher -> distributor -> ebookstore -> Adobe -> reader.
The distributor gets a cut.
In addition, the ecommerce site host has to get paid, and in many cases the ebookstore is just a front for a company like Txtr, Bluefire, or Overdrive. All those folks like getting paid.
Finally, Amazon is a cheapskate company that can thrive on low single digit margins so they don't need to price at what the market will bear. The way I hear it, their book business runs on a 28% gross margin from list but they can prosper at 3% net. They can theoretically discount all books 20-25% and still make money (they don't) but any generics matching that would be running in the red.
When you hear competitors whinge that Amazon sells below cost, what they mean is Amazon sells below the *competitor's* costs, not Amazon. The reason Amazon runs an enviable ebookstore is because they run a proprietary, do-it-yourself ebookstore that is not interoperable.
Interoperability is a great feature but it doesn't come for free.
What it comes down to is that the first choice a newcomer to ebooks makes is whether they want access to Amazon's bookstore or they want interoperability. If you want into the Kindle world you need their hardware or their reading apps; that is the price of admission. If you want interoperability you pay the price in other ways.
This is no different from what Apple, Google, Sony, Microsoft, Nintendo, or any cable or satellite TV company do. Closed systems are neither monopolistic nor illegal nor against the laws of nature. It's a standard business practice; if you want to play Halo or Titanfall, you get an XBOX--you want to play Mario or Metroid, you get Nintendo.
That's how the game is played.
