Quote:
Originally Posted by Fbone
A couple of points, if I may.
Amazon has Most Favored Nation clause in their contracts so they have some control in ebook prices. However, they have more control with their royalty rates. If they decide to raise or lower the 70% or the $2.99 level you will see major price movements by authors and publishers.
People with Kindles (ereaders) are most likely to buy from Amazon. If the book is DRM'd then even more so.
Amazon is the exclusive seller of books sold through their KDP select currently numbering over 450,000.
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Most Favored Nation clauses, AFAIK, act to lower prices, not to raise them. (i.e. the source must sell the product to its 'most favored' retailer at the lowest price that it sells the product to any other retailer). It's true that lowering prices can lead to market dominance-but how is that sort of dominance a bad thing? The 'evil' of monopolies is that they either stifle innovation or lead to higher prices. I can't see this doing either.
I'll have to think about the effects of dominance in royalty terms. Understand that monopoly laws aren't concerned with the profits of producers (authors in this case), only with the costs to consumers. The reason competition is favored is because it generally results in the lowest costs to consumers.
I don't own a Kindle and probably never will so I don't know much about the KDP Select program. Assuming it does give Amazon exclusive rights to sell a book (which seems to be what you mean although the way it's worded is ambiguous) then why would an author sign such a contract? Higher royalties? Maybe Amazon won't carry the book if the author doesn't sign an exclusive contract? If the latter then I'm surprised the government isn't already investigating Amazon, at the least. If the former then I'm not too concerned because it's the author's choice. A non-exclusive contract will always generate more sales. Not always more royalties, but definitely more sales.