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Amazon Battles Apple By Arm-Twisting Publishers
bizwriter writes "Apple has upset the e-book pricing cart by agreeing to a so-called agency model, where the publisher sets the price and the seller takes a cut. This goes contrary to the degree of control Amazon likes, so although it apparently gave in to Macmillan back in February, it turns out that Amazon continues twisting arms. The problem publishers face is that Apple has a most-favored-nation clause, so it gets the best deal that the publishers offer. If the publishers give in to Amazon, then they also have to provide the same terms to Apple."
Forcing an "agency model" on any retailer is going contrary to both history and market standards. The general model for booksellers is to buy wholesale, at somewhere around 40%-50% of MSRP, and then sell at some price between that and MSRP. Amazon has discounts of MSRP all the way from 55%, to only a few percentage points. Barnes & Nobles has similar prices (if you become a "B&N Member," for US$25/year, the prices are pretty much the same as Amazon's. A bit lower sometimes, a bit higher sometimes.)
What's really going on here is power: the publishers have decided they don't want retailers undercutting each other -- that leads to a single player having market dominance, which allows them to try to force concessions (lower prices, content changes, etc.) from the publishers. As examples of this, see Amazon and Wal-Mart.
When Apple joined the ebook market, however, they were able to take the same "we don't care about making a profit on content" attitude they have for music, and offer it to the publishers. And the market share Apple can offer with the iPad is probably at least as large as Amazon's current market share with is Kindle. (And unlike Amazon, Apple won't be paying the end-user bandwidth costs.) This gives publishers who are willing to sign up with Apple enormous negotiation power with Amazon -- over ebooks. Amazon's only negotiation power that can counter that is the physical book market.
Personally, I would certainly be offended if someone said, "You will sell this product at a price we dictate, and only take 15%. You cannot charge more to make more money; you cannot try to maximize profits through selling more by offering it for less. And if 15% of an arbitrary price we set isn't enough for you to make profit -- or even enough for you to run your business, tough." And I'd fight it as best I could.
Of course, that's also pretty much Amazon's attitude towards the publishers. So a pox on all of them, really.
Because Apple is the one with the contracts that (potentially) hurt Amazon's business (whereas Barnes and Noble is trying to run the same sort of business as Amazon).
Nerd rage is the funniest rage.
You're really concerned what's going to happen to your ebooks when you're dead? Taking corporate paranoia to the afterlife is a little extreme, no?
I don't have to buy a different set of eyes to read books purchased at different stores. They all work, as is. Where as, with ebooks, once you have a collection from Amazon, if you EVER want to read them again, you must do so on an Amazon supplied reader. If at any point in the next couple of years, Amazon decides to stop manufacturing those readers and yours dies, all of your books stop being readable.
We already know with DRM'ed music, that companies have taken their tracking servers off line, making moving the music to new hardware IMPOSSIBLE.
If I own something, I own it. I don't need the entity I bought it from to give me permission to use it.
Burn Hollywood Burn
One control-freak company wants to sell cheaper books, while another control-freak company wants to sell more expensive books?
I know which weevil/weasel I will go with.
and while this is just one side of the argument, but anyone who thinks Apple's deal with the publishers will work out better for the authors should read this:
http://techcrunch.com/2010/02/07/its-nsfw-because-the-word-fuck-is-in-the-url/