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Originally Posted by fjtorres
That is the whole point Amazon is making: they know more about retailing than Hachette ever will and it is going to be a cold day in the Amazon jungle when they let Hachette tell them how to run their business. They can have no-discount Agency on Amazon's terms or not at all. (And they'd be wisest to choose "not at all".
That release looks fairly mild but there's several implied threats in there that need to be taken seriously. Bringing in the subject of author royalties is a big escalation. If Hachette's royalty accounting is anything less than pristine Amazon can mess them up big with just one PR release.
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Classic appeal to authority fallacy. Amazon is "the expert" and therefore are right because you think they are the expert. No proof needed. I could make the same argument by saying that Hachette knows more about the value of specific authors and books than Amazon ever will and thus has a better handle on the proper price point for the latest JK Rowling book.
There is a reason that Amazon wants the big 5 publishers to support Amazon's new ebook subscription and why people look to see if there are any ebooks that they are interested in before signing up. There are certainly a group of people who simply want cheap, generic books. The old pulp market was built on that model. For that matter, franchises such as Star Wars and Star Trek are built on that model. However, that doesn't mean that it's the right price model for all books and authors.
That is what the fight is about. Amazon considers books just another generic product, like toilet paper. For all their asserts of treating authors well, they see authors as interchangeable cogs in a machine that produces generic product that can easily replaced with someone willing to take less money. Hachette sees value in a specific author and that author's name recognition. The name JK Rowling on a book is going to sell a whole lot more books than then name J Q Public on that same book.