To expand a bit on what Daithi said: Amazon, apparently, was (still is, other than Macmillan) buying the books from the publisher at 50% hardcover price. That right there was the problem - and Amazon had to do it.
See, when ebooks first came along, publishers weren't motivated to switch to ebooks because they don't understand technology, they're terrified of "piracy" (yes those quotes are deliberate, but that's another topic), and they don't like messing with a system that's worked for years. I get it. The same thing has happened (is happening) with music and movies. So they charge an exorbitant price to distributors for ebooks because they don't want to do it anway. It's like an actor asking $20mil to do a movie - he doesn't want to do it so he jacks up his price, and if they're willing to pay him, good for him. Amazon (and others, of course), on the other hand, understands that if they don't start selling ebooks someone else will anyway, and there are huge advantages to marking your territory and establishing a customer base as early as possible. So Amazon (and others) have been getting screwed already, sometimes even selling books at a loss.
Who should be deciding the final price, the publisher or the distributor? The major difference is that if the publisher decides, all distributors are equal, and the publisher can charge whatever they want. That just flat-out won't work. It's not fair to the artists, it's not fair to the readers, and it's not fair to the culture of the country. If the distributor chooses the price then there's competition, which is a good thing.
That said, while the consumers get (got?) the benefit of that competition, the distributors are/were still getting screwed because they were still paying an artificially jacked up price for the ebooks in the first place. The distributors should again drop Macmillan's catalogue (just ebooks this time), but all do it together, not just Amazon. They need to tell the publishing industry "now that you see the benefit of ebooks, now that you actually want a piece of technology, stop screwing us, or you'll be stuck selling paperbacks while the other publishers sell ebooks".
-The old system was fantastic for publishers, good for artists, good for consumers, bad for distributors.
-Macmillan/Apple's system is fantastic for publishers, bad for artists, bad for consumers, and good(profit)/bad(fewer customers) for distributors.
-Keeping Amazon's old business model but lowering the price they pay to publishers would be good for publishers, good for artists, good for consumers, good for distributors.
Just a thought
