[Hrafn]

Originally Posted by rhadin

The fallacy in your argument is that you are assuming that Hachette would sell 74% more books. The numbers Amazon gave were over its entire catalog, not just the Hachette catalog, and the numbers only pertain to Amazon's customer base, which does not include all of the other outlets that sell Hachette books.

I suspect that if Amazon were willing to guarantee that increase over the full distribution chain, Hachette would agree. But I also suspect that Amazon is unwilling to even guarantee such a sales increase among its own customers.

As to whether it is a good business plan or not, I cannot say. There is too much missing data that is fundamental to making a sound business decision. I'm surprised that anyone here on MR believes they have enough data to determine who is objectively right or wrong in this dispute.

1. The argument works whether the Hatchette-specific number is 74% or 4% -- Amazon still loses money, Hatchette still makes more money -- so NO it is NOT a "fallacy"!
2. There are no guarantees in business -- commerce is an inherently risky endevour. But when (i) you need a business partner more than they need you & (ii) they have hard numbers which you lack, which they say back up their strategy, then you would generally be very foolish to reject their strategy out of hand.
3. Lacking large incremental costs for ebooks, or evidence that demand is very price-inelastic (both absurd claims), it is bleeding obvious that Hatchette's current strategy is sub-optimal.