Quote:
Originally Posted by ApK
You consider Amazon paying Hachette, and then choosing to take a loss themselves, if they actually chose to do so, to be a losing proposition for Hachette?
Despite the fact that Hachette would get paid no matter what, and also that Amazon's previous loss-leader efforts had resulted in the biggest growth the industry has every seen?
You've lost me.
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And you have lost me.
Amazon's position is that the
PUBLISHER's retail price for an ebook should not be greater than $9.99 and Amazon would pay the publisher based on that $9.99 price. Amazon is saying that if the retail price is $9.99, Amazon will sell over all its catalog 1.74 ebooks as compared to the $14.99 price.
Hachette is saying it prefers the $14.99
PUBLISHER retail price even if it is forsaking some sales that it might otherwise gain at the $9.99 price point because over Hachette's catalog -- not Amazon's catalog -- it is not proven that Hachette's earnings will be the same.
As of this moment, there is nothing to prevent Amazon from taking the unilateral move of discounting all ebooks to $9.99 or lower, yet Amazon hasn't done so. Why is that?
My guess -- note, I said guess -- is that at $9.99 Amazon would lose a significant amount of money if it acted unilaterally. That what Amazon wants is for the publishers to absorb any loss by dropping to the $9.99 price point, a position that the publishers are refusing to accept.
- That Amazon pays Hachette does not make what it pays Hachette sufficient for Hachette to be profitable.
- Just as Amazon has no obligation to be unprofitable and take a loss, neither does Hachette.
- To say that Hachette then needs to tighten its belt and become more efficient can just as easily be said of Amazon.
- Or to say that Hachette needs to come back to reality can just as easily be said of Amazon.
- Just as you think Hachette can lower its pricing, others think Amazon could raise its pricing (just ask the unhappy shareholders).