Quote:
Originally Posted by grisjuan
For example, in a capitalist society we expect competition to push prices down over time. That doesn't seem to be happening quickly enough with ebooks to match the intuition and expectations of these consumers. Perhaps they suspect the market isn't functioning perfectly?
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It isn't happening with ebooks because the market isn't really open and competitive. Most buyers of a Kindle believe that they can only buy ebooks from Amazon -- a captive audience. If you can buy from only one source, where's the competition?
Amazon's gimmick is to induce readers to buy a Kindle by offering
New York Times bestsellers at $9.99. Once a person spends $350 for a Kindle and comes to enjoy the reading experience the Kindle provides, they will return to Amazon for future purchases. They won't/can't go to the Sony store, even if Sony was selling the same books at half Amazon's price.
There is no real competition for Amazon if the device owner owns a Kindle. And, Sony, Cybook, etc., owners don't add any pressure to Amazon to lower prices because they are not part of Amazon's market.
Similarly, there is no real competition for publishers. You cannot buy the newest James Patterson novel from more than one publisher. And there is no incentive for a publisher to lower the price because your choice is either to buy the Patterson book or not. It does not matter to the publisher which retailer sells you the book as the publisher's take will be approximately the same.