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06-06-2013, 03:08 PM #1
Amazon Executive Claims Apple's Agency Model Was Designed to Slow Down Kindle Sales
During the third day of the U.S. Department of Justice’s antitrust suit against Apple, a high ranking Amazon executive said the agency model used by Apple and five major book publishers was meant to slow down the success of online retailer’s popular e-book reader. According to in-court reports from Reuters, Amazon’s vice president of Kindle content, Russell Grandinetti testified that his company told publishers it may have to modify business relationships as a result of adopting the agency model.
Grandinetti continued by saying that publishers came to Amazon with an “ultimatum” after reaching deals with Apple in 2010, demanding that they be allowed to set e-book prices on Amazon. Unless an agreement was made, Amazon would have been barred from selling Kindle-ready e-books on the same day that hardcover versions of the titles were released according to him. Citing a particular offer from MacMillan in 2010, Grandinetti said the publisher’s CEO, Jon Sargent, offered a choice between moving to an agency model or being forced to delay an e-book’s sale until seven months after a hardcover version had been on the market. He said the following regarding the matter:
I think I expressed how unpalatable the choice presented was.
They yelled and screamed and threatened. It was a very unpleasant meeting.
We wanted to avoid losing most or all of their titles from our store.
If you're going to do this, we have to look at the whole business.
We’ll have to wait to see how the case unfolds.
Source: CNET, Reuters
06-06-2013, 06:10 PM #2
you don't say
06-06-2013, 06:37 PM #3
I'm failing to see the problem. It's akin to home movie releases being months after the movie is in theaters. Why would you go to the theater if you could just buy the movie and watch it at home the same day for far cheaper? It seems to me like this would be a smart business move for the publishers regardless of Apple's involvement. All Apple's entry into the market did was give the publishers a bargaining chip. Now I'm not saying ebooks should be as expensive as physical copies (it is in my opinion why digital comics aren't a huge thing yet), but to allow Amazon to grossly undercut the price of a new release hardcover edition is just bad business on the publisher's part. All Apple did was offer them a better deal. I've never felt ebook prices on the iBook Store were gratuitous, but they were obviously better for the publishers than their deals with Amazon.
06-06-2013, 07:46 PM #4
hmm, apple trying to slow down the growth of a competitor?!?!?