I don't understand why they can't both exist. What am I talking about? This article in the WSJ Opinion page (here) by L. Gordon Crovitz just about has me regretting my previous blogs on this subject about Apple's agency model. Why should an app and a book be different. Basically, they shouldn't be. It's a good key theme within this article.
Whether it's news, games, apps or books, Apple's position is the same. The market determines the price, and Apple gets 30%. The Justice Department fails to acknowledge anywhere in its 36-page complaint against Apple and book publishers that this is the standard approach. (Indeed, the government complaint inaccurately refers to "30% margins" for Apple. Operating margins are very different from sales commissions.) The government says this "agency model" is inherently wrong ("per se" wrong, in legalese) and "would not have occurred without the conspiracy among the defendants."
I'm not quite all the way there yet, not all the way to completely agreeing with this next statement, but I'm close.
Pricing flexibility for publishers is necessary to allow innovation. Why shouldn't some e-books cost 99 cents and others that come with video and hardcover editions be $49.95? Why not give people the option to pay 10% more to access an e-book on all e-readers? Consumers should decide, not Amazon or the Antitrust Division.
Perhaps I'm feeling open to the argument because it appeared directly below the article about Argentina coming one step closer to nationalizing Respol for their own means (here). When compared to that the agency model seems like chicken feed.
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