March 9th, 2012

Coverage of Apple filing

http://paidcontent.org/article/419-apple-downplays-role-of-kindle-threat-in-alleged-e-book-conspiracy/

In a Jeff Roberts' article, an Apple court filing is quoted as saying:

"Why would Apple conclude that conspiring to force Amazon to no longer lose money on eBooks would cripple Amazon’s competitive fortunes?"

Back when everyone was convinced that multipurpose, active display devices like the iPad and other tablets would replace single-purpose e-ink devices like the Sony Reader and original kindle and so forth, the Agency Model was expected to damage Amazon because they would no longer be able to appeal based on price thus there would be no reason to buy from them versus, well, anyone else. There were a variety of problems with this argument, some of which only applied to people who had already committed to an ecosystem and some of which are no longer particularly valid because the other ecosystems have improved. But this quote captures perfectly one that I kept pointing out. If Amazon was losing money at that low price point, and was instead "forced" to accept a guaranteed 30% cut in exchange for absolute certainty they couldn't be undercut by competitors, how on earth could the Agency Model be damaging Amazon?

h/t to The Digital Reader blog, as usual.