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Originally Posted by charleski
Wow.
I predicted the disagreement would erupt into overt war between Amazon and the publishers, but I didn't expect it to happen this soon. This is a very significant development. The real question now is whether other publishers climb on board over the coming weeks.
Amazon and the Kindle are certainly in a strong position, but the ebook marketplace still has a lot of room to grow and there's plenty of space for retail competitors to muscle in. Everyone at B&N must be wearing a big sloppy grin right now.
Personally, I'm wary of agency pricing for books. It was tried in the UK for a long time and it didn't work. But Amazon's flat-pricing model is even worse and Amazon's levels were unsustainable. The tiered, dynamic pricing that Sargent refers to in his letter (prices ranging from 14.99 for new releases to 5.99 for backlist) makes much more sense and will be better for the industry as a whole.
There are a lot of people on MR who don't see further than the price at the checkout and seem to think Amazon is some sort of consumer's champion. But I'm with Macmillan on this. The industry needs greater flexibility to remain healthy and a healthy industry is good for anyone who loves books.
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Personally I'm not concerned about an Amazon monopoly. They can't have one selling a virtual product. The retail price needs to be reasonable and something the consumer is willing to pay or it will be nothing. I can go to the library, buy from an indie author or read classics for the rest of my life. Other consumers will choose alternate forms of entertainment. Other potential consumers will file share.
Consumers will compare the price of the virtual book to the price of an equivalent physical book and expect the virtual book to be much cheaper.
Amazon has demonstrated an understanding of this. The publishers haven't.
I'm far on the side of Amazon on this one.