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Originally Posted by tubemonkey
As to Amazon, they took a loss on some ebooks. Overall, they still made a profit on ebook sales.
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We know that Amazon took a loss on "some" ebooks because the numbers were publicly known. We
do not know that Amazon still made an overall profit on ebooks because the numbers are not public. The assumption is that they made a profit but that is all it is. Amazon has never broken out the financials. We do not know, for example, whether the reason Amazon has not shown a profit for most of its corporate life is because of losses in selling televisions or losses in selling books or on losses in selling print media or losses in selling digital media or whatever.
We only know that Amazon has not been a profit-making company.
Quote:
Originally Posted by tubemonkey
Under wholesale, the publishers made more than they did under price fixing. If Agency is such a wonderful pricing scheme, then why don't they do it for print books?
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There has been no need to institute agency pricing for print books because even Amazon, in its willingness to sell at a loss, will only do so for a small portion of the print market. If you look at Amazon's pricing, most print books are priced at or near the list price.
Amazon has always made it clear that it considers digital books different and that it was willing to set a price ceiling in order to capture as close to 100% of the ebook market as it can. For Amazon, there are a lot of advantages to controlling the ebook market. But more importantly, the ebook market is one that offers the opportunity for control. The pbook market has already been well-established and even though it might capture a significant portion of the pbook market, it has no hope of capturing close to 100%.
The digital ebook market is a new market still in its infancy and not yet so well-established that it cannot be owned. Publishers recognize this and recognize Amazon's strategy for what it is -- a scheme to control the digital market. Let us not forget that for years Wall Street has been willing to let Amazon slide as regards profits but it hasn't extended that same willingness to any other bookseller or retailer.
I think the reason for Amazon's recent aggression with Hachette and Disney are a direct result of Wall Street telling Amazon it is time to make profits and give dividends, just like is expected from every other company.