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Originally Posted by John Bailey
Taking your ball home when the other kids don't let you be captain of the soccer team isn't really any good if Joe down the street runs home and gets his.
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Uh... That wasn't a serious suggestion. To reiterate, publishers fully understand that ebooks will become a major part of the market, which is why they jumped on board the iPad bandwagon. They are trying to a) make sure that until that time, their margins aren't utterly destroyed, and b) protect the value of the new product. In fact, this whole brouhaha is about determining who will get control of ebook pricing moving forward.
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Originally Posted by John Baily
Option 2. Salt the ground. Get into e-books, but keep them priced at a point where the hardback sales are not threatened....
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It's slightly absurd to suggest that Macmillan plans to "salt the ground" by bumping up prices for new ebooks to $15 instead of $10. You might as well suggest that Hollywood is "killing" the home video market by charging more for a Blu-Ray disc than for a DVD.
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Originally Posted by John Baily
Guess which sold better.. A 3 minute light pull made from offcuts at £2.50 each or a £20 bowl made from a big hunk of wood that took half an hour to make.
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Yes, some of us understand basic economics. And that running a large multinational company with a complicated supply chain, and facing a disruptive technology, is
slightly different than selling crafts on the weekends.
By the way, more from Macroeconomics 101: When demand is high -- such as, oh, when a book is first published -- the price increases. Especially if supply is constant, as is the case with ebooks.
And, if it cost you £2.75 to make the light pull, it doesn't matter how many you sell, you still won't make a profit off that item. Or, if your profit off of a single £20 bowl is equal to the profit off of 10 light-pulls, it's acceptable if you sell fewer of them.
In order for Amazon to profit off of a $10 ebook, sooner or later they will need publishers to slash the wholesale costs to below $10. That means the cover price will have to drop by over 60%, with a corresponding drop in revenues, for a business that already has thin margins. And while ebooks are cheaper to make, they aren't anywhere near a 60% cost savings.
Similarly, there is no guarantee that the ebook customer will plough the money they save back into buying more ebooks (let alone ebooks by that publisher). It is definitely possible, but they could just as easily use the money they saved to buy movies, music, or something else Amazon sells and a book publisher doesn't.
Whatever it is the publishers are doing, even if it isn't the ideal set of steps, they certainly are not trying to "destroy" the ebook market. They're trying to manage the transition and gain control -- exactly the same thing Amazon is doing. Amazon isn't doing anything wrong, in this respect -- but don't kid yourself; ultimately Amazon is pushing ebooks and the $10 price point for their own benefit, not yours and mine.