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Originally Posted by darryl
I agree. I fell into the trap of lazily using "agency" to encompass the practice of setting ebook prices high so as to protect print sales. I think you are correct. Agency itself will likely remain, though I do expect that Amazon will price so as to maximise overall ebook sales revenue, rather than per unit margin. As you say, "Amazon isn't proud, they'll make money wherever they can." I don't think its likely that they would adopt the Big 5 practice of setting ebook prices high to favour print. This would indeed place pressure on the other players.
I think S&S would fit beautifully into Amazon, though I'm afraid I don't see Caroline Reidy as an Amazon executive! On reflection I also agree with you about Hachette. The French would probably see an Amazon acquisition as being a cultural disaster of epic proportions. With PRH 75% owned by Bertelsmann last I heard, HC part of News and McMillan owned by Holtzbrinck S&S does seem to be the likely target if Amazon does choose to go this way.
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Given Amazon's market share of the ebook market in the US, I would expect them to charge whatever the market will support. I think the idea that ebook prices are artificially high to support print is more an article of faith than reality. Ebook prices are at the level they are because people are willing to pay that price. Bezos owns the Washington Post. The last time I looked, he hasn't cut the price on that newspaper.
Amazon makes a ton of money of selling print books. Most likely, a lot more money than they make selling ebooks.