[begin quote] Richard Sarnoff, president of Bertelsmann Digital Media Investments, a unit of Bertelsmann, which owns Random House and is the world’s largest publisher of consumer titles, said that for this reason, publishers have remained vigilant in fostering competition in the e-book market.
“The key thing for us as publishers and our authors is that the value to a consumer of the underlying content is not undermined by artificially low pricing policies that end up sticking,” he said. [end quote]
I'll just start ticking off the obvious problems with this, after noting that I'm not slamming the author of the piece. I'm going after Sarnoff and Bertelsmann here (Bertelsmann is a cheap and easy target and has been for at least a decade -- but they're huge, so it's still fair).
(1) Sarnoff believes that if a lower price sticks, it's not "real" -- it's artificial.
(2) Sarnoff believes that its important to have competition in the e-book market to ensure a higher price for publishers (and the authors who are signed with those publishers).
Those are obvious. With a small inference, however, we get to some inobvious things which I think are still attributable to Sarnoff:
(3) He thinks he can effectively compete with Amazon's dominance in e-book land _by charging more money for the content_.
(4) More content is not mentioned.
(5) A better user experience is not mentioned.
(6) A cheaper overall user experience (hardware + content) is not mentioned.
The rationale with the iPhone as reader is that (a) the iPhone is cheaper and (b) it does more stuff. Sure, as a reader, it's going to suck compared to a "purpose built device" or whatever the code phrase is, but that rationale is worth plugging, and explains why Bezos is vaporware-ing the ability to read kindle books on other devices. It's _nice_ to only carry one device (and a small, cute and cool one at that).
Not sure what the rationale with the Sony Reader is; possibly someone out there can explain it to me.
But it seems to me that if your primary goal in competing in a marketplace is to extract the maximum payment per item from the customer, and there's another big player in the game who is undercutting you, it's not looking good for you. And people are worried about Amazon extracting too much money from e-books by dominating the market. Yikes.