Just a Ball of Rage

OK, so I'm too lazy to actually download your rant, so I'll just go by your commentary on BOL - where you're usually the most intelligent, funniest panelist.

Unfortunately, here, all of you were totally wrong and off track.

Market forces don't work when there is only one publisher. Amazon's comment about the 'monopoly' over MacMillan's products is true. For example, if I want the Da Vinci Code, I can only buy it from Random House. If Random House dictates that it will cost $15.99, then they are engaging in price fixing. I can't go to MacMillan or Longman/Pearson and get it for a cheaper price.

No, manufacturers of all kinds set their wholesale prices and retailers set their retail prices. This is how the market normally works. Proctor & Gamble makes Tide, sells it to supermarkets at a certain price and each supermarket decides their own price and profit margin (or loss sometimes if they want to make it a loss leader to get people in the store).

If Amazon decides to sell e-books at a loss to increase sales of Kindles, then they are simply following the <i>normal</i> pricing model of the retail world. Alternatively, if Amazon decides that the retail market will bear a higher price then they will do so. If the wholesale prices of e-books or any other item is priced so high that the profit margin does not justify carrying the item in the inventory, the retailer may stop stocking the item. THAT is how the market works in this case.