The New York Times is reporting that Apple’s entry into the eBook market allowing for higher prices and greater control over publisher’s content, may in fact offer better flexibility than previously rumored. The “agency model” idea that is being thrown around would end Amazon’s control of the eBook market where they offer best sellers for $9.99, thus allowing content publishers to set pricing. Possibly in the $12.99 to $14.99 are.
But according to at least three people with knowledge of the discussions, who spoke anonymously because of the confidentiality of the talks, Apple inserted provisions requiring publishers to discount e-book prices on best sellers — so that $12.99-to-$14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon’s $9.99. Essentially, Apple wants the flexibility to offer lower prices for the hottest books, those on one of the New York Times best-seller lists, which are heavily discounted in bookstores and on rival retail sites. So, for example, a book that started at $14.99 would drop to $12.99 or less once it hit the best-seller lists.
Moreover, for books where publishers offer comparable hardcover editions at a price below the typical $26, Apple wanted e-book prices to reflect the cheaper hardcover prices. These books might be priced much lower than $12.99, even if they did not hit the best-seller list.
Moving to the agency model, according to publishers, would build a sustainable long-term eBook industry. This would be the opposite of Amazon’s strategy of selling eBooks at a loss in hopes of spurring sales of Kindle ebook readers.
A long-term strategy is always the better move. Just look at Apple, they sell good (normally) products at decent profits compared to other PC makers that sell a large volume of machines at razor thing margins. Apple has the profit share, and market cap to back up this claim.
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