Every word of your analysis and reflection is spot on regarding the importance of time-sensitive pricing, incenting authors to produce great works, and, what I believe, is my _moral_ responsibility to reward those authors/software publishers/directors/actors/content creators who give me so much pleasure. I'm happy to see there are others out there who share my worldview.
So, I think it's really important to emphasize, that Amazon wasn't suggesting non time-sensitive pricing, instead, they were requesting the ability to set the prices, EVEN IF it meant they would pay Macmillan $25 and sell a book for $9.99.
The net result would be - I get a great book, day one, cheap. MacMillan (and the author) get their cut of the $25. Amazon gets my business. (Because, once I'm at amazon.com, good chance I'll go back when buying my EOS 7D). Walmart mastered the art of selling something at a loss to get you in the door, Amazon is just following in their well understood footsteps.
The publishing industry, though, has done the analysis and realized that setting a price point of $9.99 constantly, means that readers will have a difficult time paying more than that. Which means that, eventually, Amazon.com doesn't have to sell the books at a loss, because that is the only price that books will sell at.
I don't really buy the argument - I'm going to purchase the next Peter Hamilton Void Series Book on Day 1, even if it is $50; but clearly the publishing companies do, because they desperately want to control the price that the _reader_ sees, regardless of what the publisher is being paid. Ergo, the "Agency Model". Amazon is no longer a Book Buyer/Seller for MacMillan, and will not be able to discount eBooks to get more volume.
There is a meta-game being played here, and it is for control of the Channel - to some degree, the party that controls the pricing controls the channel. If Amazon can set the pricing to a below-cost number, then they grow their (already strong) control over the channel, and make it up on all the other elements that people purchase. By turning Amazon into an Agency that has to price their books at the same price as everyone else, Macmillan has regained that control.
If you can quickly crate high quality books that people actually like you will make a lot of money as an author. To paraphrase one of the best "We don't subsidize an incompetent hore why must we subsidize incompetent authors."
Most published authors suck which has a lot to do with them making no money. What publishers focus on is not high quality books but rather figuring out how to convince people to buy crap books that they will not actually read.
Amazon cut's into this in two ways, if you can read reviews before you buy you are less likely to pickup something you don't like. The other approach is by removing the limited shelf space at the book store you reduce the control large publishing houses have over the channel which allows higher quality books to compete without backing from a major publishing houses .
So, I think it's really important to emphasize, that Amazon wasn't suggesting non time-sensitive pricing, instead, they were requesting the ability to set the prices, EVEN IF it meant they would pay Macmillan $25 and sell a book for $9.99.
The net result would be - I get a great book, day one, cheap. MacMillan (and the author) get their cut of the $25. Amazon gets my business. (Because, once I'm at amazon.com, good chance I'll go back when buying my EOS 7D). Walmart mastered the art of selling something at a loss to get you in the door, Amazon is just following in their well understood footsteps.
The publishing industry, though, has done the analysis and realized that setting a price point of $9.99 constantly, means that readers will have a difficult time paying more than that. Which means that, eventually, Amazon.com doesn't have to sell the books at a loss, because that is the only price that books will sell at.
I don't really buy the argument - I'm going to purchase the next Peter Hamilton Void Series Book on Day 1, even if it is $50; but clearly the publishing companies do, because they desperately want to control the price that the _reader_ sees, regardless of what the publisher is being paid. Ergo, the "Agency Model". Amazon is no longer a Book Buyer/Seller for MacMillan, and will not be able to discount eBooks to get more volume.
There is a meta-game being played here, and it is for control of the Channel - to some degree, the party that controls the pricing controls the channel. If Amazon can set the pricing to a below-cost number, then they grow their (already strong) control over the channel, and make it up on all the other elements that people purchase. By turning Amazon into an Agency that has to price their books at the same price as everyone else, Macmillan has regained that control.