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Sunday, April 25, 2010

Amazon v. Print Publishers

We've covered the story of Amazon's battle with print publishers over e-Book pricing. The Christian Science Monitor has a concise summary of the strange number game behind this battle. In short, it's all about defining the market, for now, rather than profits. Here is a summary of the players'...shall I call it voodoo economics? Nah, that dredges up too many dead topics. Um, here is a summary of what the players want:

Amazon: dear Sirs and Madams: we'd like to buy your e-Books for $13 and sell them for $9.99. Thank you.

Dear Mr. Bezos: thank you for your concern. However, for your benefit, we prefer that you make a nice 30% fee for selling our e-Books. $18.50 sounds like a much nicer retail price.

Motives: Amazon is willing to lose money for now to set the buyers' expectations for low prices for e-Books and own the market. The publishers cringe at the effect that such a low price for e-Books will have on print book sells. Who's in charge here?

In another related article, I saw another motive: Amazon allegedly wants to take the "middle man" (publishers) out of the equation and deal directly with authors.

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