Quote:
Originally Posted by pilotbob
They make less and we pay more. Sounds like voodoo math to me. Or just outright dishonesty.
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Or that you aren't familiar with the changes.
Previously the publisher would charge Amazon a wholesale price (e.g. $12) per ebook. Amazon would then set whatever price they wanted. In some cases, Amazon was selling the ebooks at a loss -- i.e. subsidizing your ebook purchase in the pursuit of market share.
Under the new system, if a new ebook is $15, and the publisher gets 70%, Macmillan gets $10.50 per book ($1.50 less) and Amazon is guaranteed positive revenues. Macmillan has also floated the idea of increasing author royalties, to compensate for the reductions in the cover price, upon which the royalty percentage is based.
Ergo there is no "voodoo" or "dishonesty." Amazon is the entity that gains most of the increase in revenues from this arrangement, but loses the ability to apply discounts or have loss-leaders as a method of gaining a competitive edge.