It’s over for Apple: Supreme Court denies certiorari in e-book pricing case | I Love My Kindle
The tradpubs made a crucial strategic error
Here was the situation:
Amazon entered the very marginal e-book market (Sony was in it, but not much was happening in the USA with e-books) in 2007.
Part of their strategy was to promote that most bestsellers and new releases would be under $10…considerably less than the hardback equivalents (at least based on the publisher’s suggested retail price…but even discounted, those hardbacks were often above $10).
To do that, they clearly often sold the books at a loss: they paid more to the publisher than they got from the customer.
The publishers didn’t like that.
One of their biggest concerns was “price value perception devaluation”. Who would pay $25 for a hardback when, according to Amazon, $9.99 was the right price for a popular new release novel?
While it does cost somewhat less to produce an e-book than a hardback (an early analysis said it was about 12.5% lower, as I recall…many of the costs, such as editing, lay-out, legal are the same), the margin on hardbacks (the profit you can make) was higher…and they were selling a lot more p-books (paperbooks).
What could they do, though? Realistically, if they wanted to be in the exploding e-book business, they pretty much had to go with, and cooperate with, Amazon, which absolutely dominated the market.
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It’s over for Apple: Supreme Court denies certiorari in e-book pricing case | I Love My Kindle.
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