

My Stupid (Publishing) Industry - nopassrecover
http://maxbarry.com/2010/03/04/news.html

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nopassrecover
My favourite segment:

"Publishers didn’t like the fact that Amazon.com started selling e-books for
$9.99 each. (They thought that was too cheap, if you’re wondering.) It didn’t
affect publishers’ margins, nor authors’ royalties, since Amazon.com was
selling below cost to promote its Kindle platform. But still, publishers were
uncomfortable with the idea of books being that cheap. So they went to war and
forced Amazon.com to bump up prices to $13-$15, in exchange for taking a lower
royalty on each sale.

Let’s review. Amazon.com was eating it in order to allow you to buy books for
ten bucks, instead of twenty or thirty, while paying authors the same royalty.
Publisher intervenes, and now books are more expensive for you, while the
author gets less. Also, the publisher gets less. Oh, and I didn’t mention
this, but during the war, Amazon.com took down all the “Buy” buttons for
Macmillan books, so you definitely couldn’t buy them no matter how much you
wanted to and nobody made any money at all. "

I thought these companies love saying how they have an obligation to make
their shareholders money?

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jared314
The appearance of a significantly "cheaper" version of the product cheapens
the brand, and makes customers wonder why they are paying so much. Potentially
killing the rest of the product line-up. It has happened to every industry
several times before, including the book industry.

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nopassrecover
Yeah but in most industries it's _illegal_ to control the price that retailers
distribute your product at. This was temporary pricing anyway to encourage
interest in the online platform over the longer term.

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jared314
Illegality is a gray area, negotiating a contract is not control, and agents
are not retailers.

The customers were not told the price was temporary, just that it was the
default. The customer's perception was what mattered to the publishers.

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naner
Suprised he didn't bring up Google Books.

