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February 7, 2010

Increased Competition = Higher Prices? (followup)

The war is over. At least on the surface it appears to be. According to the New York Times article MacMillan and Amazon have reached an agreement which will allow the cost or new e-books to be raised from the current $9.99 to as much as $14.99. Amazon as the seller will now receive a 30% commission on the sale. There are no details as to what Amazon gains out of this deal, but one would assume that it would need to be something worthwhile.

Apparently there are several other companies that are seeking to pursue this same business model. Perhaps I'm in the minority, but I'm pretty cheap and I'm not sure I would pay that much for an actual hardback book. This plan seems like the publishers are going to shoot themselves in the foot. As I stated in the previous post, the company is saving so much money on printing, binding, supplies and shipping, there seems to be no point to artificially raise the value of e-books. Instead, I think these companies should be embracing new technology and drop the prices so the people who see a Kindle or Nook and debate the value would jump on board. It could be a huge boost to the publishers and benefit the consumer. Only time and sales figures will tell if this move is for the best.