Alberto Mingardi  

Hachette and Amazon made a deal

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I have previously commented on the quarrel between Amazon and Hachette, a cause celebre that brought Paul Krugman to argue against Amazon's "market power."
Now the contract dispute has, as it happens with contract disputes, come to an end.

The Wall Street Journal reports this comment from analyst James McQuivey:

It's a victory for Hachette in that they get to set the consumer prices of their e-books, while Amazon wins in that it has given Hachette an incentive to keep prices lower," said James McQuivey, an analyst with Forrester Research. "This deal should have been done a lot earlier. Emotions took over, and they both began talking like they were protecting the free world.

Competition police weren't needed, after all.


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CATEGORIES: Business Economics




COMMENTS (4 to date)
kingstu writes:

I think Krugman is right since you can only purchase books from Amazon and a few thousand other retailers.

Tom West writes:

On the other hand, if you want to sell e-books, if you aren't on Amazon, then don't bother.

Most authors I know try vigorously to promote non-Amazon outlets, yet 90% of their income from e-books is from Amazon.

If e-books dominate, Amazon will be in roughly the place that MS was with the PC - owner of the market until the market itself becomes irrelevant.

ThomasH writes:

If Amazon has a degree of monopsony power (not proven) the occurrence of a transaction does not demonstrate that the power does not exist.

Christophe Biocca writes:

Tom West:

If e-books dominate, Amazon will be in roughly the place that MS was with the PC - owner of the market until the market itself becomes irrelevant.
Considering that the two largest e-books distribution platforms (by install base, not sales volume) are controlled by its competitors Google and Apple, I doubt there's much risk.

Amazon's competitive position is a lot more akin to Netscape than to Microsoft.

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