Quote:
Originally Posted by calvin-c
The question, IMO, isn't whether or not the price increases the number of books sold, but whether or not it increases profits. According to many reports, Amazon is losing money on each sale. If true, then the more books that are sold, the more money Amazon loses.
So, why is Amazon doing this? The only reasonable answer is to become 'the big dog' that can dictate terms. If they can corner the market (IMO, they can't-but they might think otherwise) they can then raise prices & recoup their losses. If not then, if they're big enough, they can dictate terms to the publishers, thus lowering the publishers prices. This, of course, is what the publishers fear.
Right now, I don't think anybody's losing money except Amazon-so the publishers are crying before they're hurt, as you pointed out. But the fear of being hurt is there, which is why they're not happy about the prices.
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And I have such a problem with the idea that Amazon's losing money on each ebook sale. Amazon skims 65% of the price right into their pocket. And that's better than a retail storefront gets. The author writes the book. The publisher (or author if self-publishing) supplies the file to Amazon - along with artwork. Amazon just have to format it, store a copy on their server and electronically deliver it. Where is the money going? My bet is Sprint to cover Whispernet. Unless, of course, the publishers are negotiating better deals for themselves than what a self-publisher gets from Amazon's DTP. *THAT* I would believe.
Derek