Quote:
Originally Posted by Robotech_Master
Jeff Bezos is honestly a brilliant marketer, and I can't say that enough. That doesn't necessarily mean he's a good person (indeed, marketers being what they are, it might mean quite the opposite!), but he's done an amazing job of building Amazon up out of nothing into an e-commerce powerhouse. Some of the things he's done have been a little iffy, and some have been very iffy, but they haven't crossed the line into illegal yet.
And certainly the thing he did that touched off the publishers' ire wasn't. Selling new titles at or below cost as loss leaders to boost sales of the backlist? That's not any different from Best Buy marking down some TVs to at or below cost in its sales circulars to draw people into the store. And yes, Peter, it is still doing that even now. Not to the extent it used to, perhaps, but more than the publishers would have allowed it to do under agency pricing.
For example, take a look at John Scalzi's "Old Man's War" series on Amazon. Earlier books in the series are priced at $6, on $8 paperback retail. That means they're taking in $2 each in profit on those books, assuming the standard 50%-of-retail wholesale rate. The latest book, however, is $11 on a $26 hardcover retail. Which means it's losing $2 per book at that rate on the expectation that buying that book will make consumers want to buy more than one of the other ones that earn them $2 each.
Now you can't tell me the publishers were too stupid to be able to do that same kind of research on Amazon.com and see for themselves what their backlist versus their frontlist titles were selling for. And they would have known (and if they didn't, their lawyers would have told them) that the legal standard for predatory pricing was that the company had to be selling everything at a loss, not just taking the loss on a few things to make a big profit on the rest.
Which is probably why they didn't try filing a complaint with the FTC alleging illegal behavior (the way Amazon later did when they committed illegal behavior). For all their loud complaints (in public and then later in Cote's courtroom) about Amazon's "predatory pricing," they knew they didn't have a legal leg to stand on. (And the DOJ itself made that determination as well when they looked at Amazon's books during the run-up to filing the suit.) They decided they'd find another way to bell the cat.
And the rest is history.
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I don't disagree with that. The publishers reaction to Amazon was very similar to the music industries reaction to iTunes. Some may not remember that some music companies were so afraid the Apple was growing too strong that for a while they gave the Amazon digital music store everything (no-DRM, full catalog) that they refused to give Apple. But they eventually came to an agreement with Apple after years of fighting with the mulch-tiered price points (anyone remember that Apple once wanted to make all songs 99 cents?).