[darryl]

Originally Posted by leebase

There used to be sales....but nobody put the entire NYT's best seller list on sale for $9.99 during the new release, hardback window. That’s what started the war. That’s what led to the publisher's actions.

Ultimately there came a choice....cease releasing ebooks at the same time as the hard backs....or cease allowing ANY seller to set the price of the ebooks (Agency pricing). Amazon choose Agency pricing over having ebooks time windowed like paperbacks.

All of those book sellers with their sales on this book or that book...could not compete with selling the entire NYT's best seller list as a loss leader. They didn’t have Amazon's access to capitol to survive that price dumping.

Apple was the stick the publishers needed to combat Amazon. Nobody else had a remote chance of competing against Amazon's money.

The Court decisions on the E-Book Price Fixing Conspiracy have put the matter of "loss-leading" in this case to rest. See these quotes from Apple's unsuccessful appeal:

6 As we have already explained, the Publisher Defendants’ primary
7 objective in expressly colluding to shift the entire ebook industry to an agency
8 model (with Apple’s help) was to eliminate Amazon’s $9.99 pricing for new
9 releases and bestsellers, which the publishers believed threatened their short‐
10 term ability to sell hardcovers at higher prices and the long‐term consumer
11 perception of the price of a new book. They had grown accustomed to a business
12 in which they rarely competed with one another on price and could, at least
13 partially, control the price of new releases and bestsellers by releasing hardcover
14 copies before paperbacks. Amazon, and the ebook, upset that model, and
15 reduced prices to consumers by eliminating the need to print, store, and ship
16 physical volumes. Its $9.99 price point for new releases and bestsellers
17 represented a small loss on a small percentage of its sales designed to encourage
18 consumers to adopt the new technology

And:

3 Although low prices that deter new entry may simply reflect the dominant
4 firm’s efficiency, it is true that below‐cost pricing can, under certain
5 circumstances, be anticompetitive. The dissent suggests that Amazon’s pricing
6 gave it an unfair advantage, so that even if Apple had priced ebooks at an
7 efficient level (whatever that might have been), it still would not have been able
8 to enter the market on a profitable basis. But Amazon was taking a risk by
9 engaging in loss‐leader pricing, losing money on some sales in order to
10 encourage readers to adopt the Kindle. “That below‐cost pricing may impose
11 painful losses on its target is of no moment to the antitrust laws if competition is
12 not injured: It is axiomatic that the antitrust laws were passed for ‘the protection
13 of competition, not competitors.’” Brooke Grp. Ltd. v. Brown & Williamson Tobacco
14 Corp., 509 U.S. 209, 224 (1993) (quoting Brown Shoe Co. v. United States, 370 U.S.
15 294, 320 (1962)). Because lower prices improve consumer welfare (all else being
16 equal), below‐cost pricing is unlawfully anticompetitive only if there is a
17 “dangerous probability” that the firm engaging in it will later recoup its losses by
18 raising prices to monopoly levels after driving its rivals out of the market. Id. If
1 Apple and the Publisher Defendants thought that Amazon’s conduct was truly
2 anticompetitive under this standard, they could have sued under § 2 of the
3 Sherman Act. (Whether DOJ would have pursued its own enforcement action is
4 of unclear relevance given the availability of a private remedy.) Failing that,
5 Amazon’s pricing was part of the competitive landscape that competing ebook
retailers had to accept.22 6.

Windowing in so far as delaying releases of e-books was tried before the price-fixing conspiracy and was not an outstanding success. However, the jury seems to be out as to the effect of windowing the release of e-books to libraries. I suspect that it will in fact result in both some extra sales and some extra piracy. But even if this is not the case, I doubt it does any real harm to publishers. Also, to put things in perspective, Amazon does not seem to make electronic versions of either KDP books or books from its own imprints available to libraries at all. I don't expect that they will do so unless forced, as there simply seems to be no upside for them. Perhaps some sensible model for library lending may develop in the future, but it will almost certainly result in libraries paying more. For instance, a payment per borrow may be feasible, but in view of annual budgets would probably need to be capped and monitored in real time, with access ceasing when the budget was fully expended. A per title cap may even be feasible. But I doubt this will eliminate windowing in any event.

My view is that, as the court pointed out and I quoted above, referring to the conspiring publishers:

11 They had grown accustomed to a business
12 in which they rarely competed with one another on price and could, at least
13 partially, control the price of new releases and bestsellers by releasing hardcover
14 copies before paperbacks.

Neither Apple nor the Publishers were victims of any sort. They were simply not interested or used to competing on price, and when they were given a taste of competition, they didn't like it and acted to prevent it. In any case, the matter is decided. The Supreme Court refused to entertain a futher appeal by Apple.