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Originally Posted by rcentros
Yep. The problem here is that Amazon showed that everyone could make a profit when new release, top-tier eBooks sold for $10. So that price kind of became the "norm." Then Apple and the Big Six colluded — Jobs specifically said he would force prices up when he released the iPad. People don't forget that.
So what's the result? Top-tier authors' books sell for more, but folks like me now borrow them from the library rather than buying them. What should be more worrisome for the Big Five is that more and more authors are becoming independent or going to non-traditional publishers. And this is not just new authors, but mid-tier authors as well. I'm guessing this is happening because eBook buyers balk at buying "so-so" authors' books at top dollar and these authors become less valuable to the Big Five. Meanwhile the mid-tier and new authors make more money with the new methods.
I guess we'll see how it all shakes out. Dinosaurs have gone extinct before.
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Amazon sold a small group of NYT best sellers at a loss to gain market share. When their competition drifted away, they didn't doing it, even though that boogie man, agency pricing was not effect at the time. It's a standard strategy known as a loss leader.
https://en.wikipedia.org/wiki/Loss_leader
The publishers didn't like it because as you show, some people fixate on the loss leader price and assume it's the new norm. Amazon didn't care about that since they planned to just squeeze the publishers to reduce Amazon's price.