Sometime over the weekend, a wise decision was made at Amazon and they agreed to the pricing structure for e-book downloads long pushed by the major publishing houses. This has been characterized variously as 'surrenduring' and 'capitulating'. What does it mean? It means that Amazon will no longer have a stranglehold on e-books and anyone selling them for an e-reader - whether the new iPad, Sony's gizmo or the Kindle - will will be on a more equal footing. As will readers.
Why, you may ask, was Amazon willing to escalate this struggle into what was described as being a 'knife fight'?
"Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales. Amazon’s goal has been strategic: it aims to establish a low price for e-books that will have the ancillary benefit of helping it sell more Kindle devices. " This was the explanation of the New York Times today. Simply put, by being so huge that they could afford to lose money on their sale of e-books, they were trying to lock in as many people as possible to their proprietary device - the Kindle. They were, in effect, attempting to corner the market on e-readership. If they could charge less than anyone else, the market would obviously tilt towards them. After all, once you buy a Kindle, you're locked into being an Amazon customer. And that is what they wanted.
And, by being as dominating as Amazon is in the book world, Amazon was expecting to be able to dictate their pricing structure on the rest of industry - or, at the very least, they didn't care if they damaged the book industry as a whole (which was the over-riding fear of the publishers and authors and why they needed the price to go up to the $15 area) and lost money doing it, as long as they locked up as many people as possible into their system.
There is a social, political and economic philosophy in this country that 'bigger is better'. Let us hope that the economic and banking collapse of 2009 will finally bury that view. No one is well served if one outfit - being it Amazon or AIG or Enron or any other financial monster - can hold that much sway over a large segment of the economy, whether they're selling energy or toxic mortgages or electronic books. No one entity should be able to single-handedly damage an entire sector of the economy or culture.
Bigger is Better quickly can become Too Big to Fail and we should all start to worry at that point.
So count this as a victory for us all.
Comments