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Originally Posted by pwalker8
No, it's somewhat more complex than that. Apple's contract had what is called a most favored nation clause, which said that the publishers could not charge less somewhere else than they did at Apple. They were and are quite free to discount prices as much as they want. Indeed, they do discount prices on a regular basis. I purchased David McCullough's "The Wright Brothers" from the Amazon Kindle store for $14.99, which is a 50% discount from the list price and $3 less than the hardback price. There is even a great big "This price was set by the publisher" on the page.
Much of the publishers' angst and desire to control price comes from the fact that Amazon has a monopolistic position when it comes to ebooks. The publishers really want to have alternate sales channels and not to worry about being held hostage by Amazon.
The real issue is that the true narrative isn't all that straight forward and certainly isn't "Sainted Amazon and Evil Publishers". Both sides are large corporations that play hard ball. Amazon wants to squeeze the suppliers (i.e. publishers) just like Walmart, while the publishers want to maintain their current business model. Neither is particularly concerned about the people who buy the individual books to read.
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Back to normal. Virtually nothing I can agree with in your whole post. Thank you. I'm very relieved.
What you call a "most favored nation" clause appeared in every contract, and had a simple purpose. To ensure that Apple never had to compete on price with Amazon or any other store.
As for list price and hardback price, these have long been largely irrelevant. As other posts on Mobileread testify, hardback's are often discounted right from day one. List prices are set in the expectation of discounting. During the Hachette negotiations, Authors United members were not exactly ecstatic about Amazon charging the list price for their books. The Wright Brothers? You were ripped-off. Wake up. Prices have in fact risen substantially.
Amazon has a very powerful market position. But, as has been pointed out many times, it is far from a monopoly. However, the Big 5 publishing Cartel is an oligopoly, though one which is increasingly failing as Indie's and Self-Published ebooks become more popular. Their particular implementation of Agency Pricing is likely to hasten this process.
Of course the situation is not totally black and white. No one posting on this site seems to be saying this. But far from squeezing the Publishers, it appears that Amazon have been discounting out of its own share to the point that it was making nothing on Big 5 ebooks. And no, this is not because of their love of the ebook buying public. It is because they do not share the Big 5 strategy to seek to retard EBook growth to preserve the failing PBook market. They rightly see the future market as being dominated by EBooks, and wish to encourage rather than retard their growth. A very rational business goal. They want to set EBook prices at a point which maximises revenues, rather than a point close to PBook prices. Amazon aim to lower EBook prices. The Big 5 want higher EBook prices, and are using Agency to try to get them. Readers want lower EBook prices. At this point in time the interests of Consumers align with those of Amazon. This may not always be the case. If Amazon does ultimately eliminate competition (which include Apple, Google and Kobo) and in fact becomes a Monopoly, then history tells us they will likely abuse their monopoly power. Then again, Amazon is quite a unique company in many ways, and has an aggressive focus on customer service and satisfaction. Perhaps not. But it will be better to have a strong Amazon with some real competition.