Quote:
Originally Posted by Sil_liS
Because before the sale price was decided by the retailer.
Before the agency pricing publishers were setting the list price, and retailers were selling them at whatever discount was convenient. Amazon's business adapted very well to ebooks, so it was selling more ebooks than other retailers. Because of this, Amazon got a better deal on ebooks. It used this advantage to sell ebooks at a lower price than the competition, which increased the market share. They figured that consumers prefer the $9.99 price tag to anything above $10, and and the books on NYT's list were sought after so it was a good business move to get more customers. Unless the books had a list price higher than average (for a book on NYT's list) Amazon was still making a small profit, because it had a better deal. And people preferred to get the ebooks instead of the p-books because of the difference in price.
This meant that for the top selling books the market was shifting towards ebooks and this was not good for publishers, since they had more control over p-books. At least one publisher tried to make Amazon change the price by refusing to use it as a distributor for all their titles, which resulted in lower sales for that publisher, which the publisher couldn't afford.
This whole situation was a result of poor management on the part of the publishers because they didn't realize what an impact ebooks would have.
|
I'm pretty sure that Amazon wasn't getting a better deal than everyone else. They pretty much paid the same price as the other major retailers (I've heard 50% of retail thrown out), however, they were willing to take a lose on those specific ebooks to establish a market.
The agency model didn't break the publishers business model. The publishers were able to set the price to whatever fit their business model. What caused the publishers grief was that Amazon had already set the price in the public's mind, so basically the publishers waited too long.