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Originally Posted by Rizla
So Amazon is not fighting agency-pricing? I thought they were trying to lower prices (or have the option to do sell more cheaply).
And does this apply to only e-books or p-books too?
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Amazon fought and lost.
Hachette wants agency pricing and they got it
Hachette’s CEO Michael Pietsch:
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“The new agreement delivers considerable benefits. It gives us full responsibility for the consumer prices of our ebooks,” Mr. Pietsch explained in the note. “This approach, known as the Agency model, protects the value of our authors’ content, while allowing the publisher to change ebook prices dynamically to maximize sales. Importantly, the percent of revenue on which Hachette authors’ ebook royalties are based will not decrease under this agreement.”
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Amazon whole business practice is about lowest prices possible to grow market share. For Amazon, it's about revenue, not profits.
In this case, the Big 5 is forcing Amazon to take 30% cut on each ebook sold.
Amazon is using the profits from ebooks to make prints cheaper on Amazon. Market share again.
For the Big 5 Publishers, they want to slow down ebooks to protect their print business. The best way to do this is to raise ebook prices.