What Amazon's ebook strategy really means

> Regarding screens, I honestly don't know that making the screen better makes for a better reading experience.

I have several Android devices (phones, tablet) and an iPod Touch. They are all useless for reading outside (in the shade) because the screens are too reflective. Indoors they are all fine. I do most of my reading outside so this turns out to be a big problem.

I can't get a Kindle for technical reasons (I do not support Amazon and their DRM) and for financial ones - they do not charge sales tax, so I would have to do so on my tax returns which incurs large CPA fees as well as an audit trigger (California hates self employed people).

I also do not want a single purpose portable device. I prefer my portable devices to be multi-function - gps, games, web, movies, music, books etc all in one rather than carrying one device for each purpose.

Once someone figures out how to make general purpose Android tablets and phones with usable outdoor screens then things will really be better!

Oh, I don't think Amazon is cheating. The whole point of disintermediation is to be more efficient and drive down prices. I'm certain prices will be lower under King Bezos, and perhaps payments to authors will stay high (though that's far less certain).

It's important to consider that Amazon has always behaved quite consistently. Even when it had 90% of the ebook market, it was the one pushing to keep prices down. In its other markets (cloud services, physical books, other goods), evidence suggests that it tries to cut prices as much as possible. I'd go so far as to say it's part of Amazon's culture. I don't think they know how to have a big fat margin on something. It'd make them itchy, like their very own fat middleman waiting to be crushed.

So my issue isn't that Amazon is waiting patiently to pump up their prices once they have enough market share. It's more that having no competition is dangerous in itself. Google and Valve, for example, are two companies that I like immensely, and I think they do a great job in their respective markets. Yet Google can arbitrarily cut off access to my email, and Valve can do the same with my games. Both have been known to use these powers when it makes sense to them. I'd change providers, but everyone else, frankly, sucks.

I want there to be robust competition in e-readers, but the Kindle is too good. I want there to be robust competition for e-bookstores but Amazon always has the best prices. There's a kind of bittersweet ambivalence in knowing that the industry leader is there because they're a clever company doing it right, but still wishing that someone else was there to challenge them. Nobody's right always, or forever.

Absolutely. Anyone you do business with can do anything not forbidden by the law. But competition is a great reason to avoid doing things that make your customers unhappy.

If there was another cloud email provider that was as good as Gmail, but additionally had a reputation for never disabling accounts, I would switch to them. Gmail would lose my business, and I wouldn't have to worry about my account disappearing if some bayesnet decides I'm a bad guy.

"Google can arbitrarily cut off access to my email," - Use iMap and host your domain through Gmail. That way, if Google acts improperly, you (A) have all your mail locally in your iMap folders (also useful when flying), and (B) you can point your MX records at an alternate destination and pick up your mail there.

"However I suspect that the big 6 are going to accept a world without DRM the same way as the MPAA and RIAA before them: kicking, screaming and fighting until the last breath to prevent anyone from staunching the massive gaping wounds they've inflicted on themselves."

This is completely true. As someone has worked in the ebook sector for close to 10 years, the publishers (with a few notable exceptions) continue to dig a deeper hole for themselves. The three main problems in the ebook sector are:

- DRM, Territoriality, The Agency Model introduced in 2010

The problems of DRM have already been covered in detail.

Regarding territoriality, we have ridiculous set of restrictions about who we, as a retailer, can sell an ebook to. A large publishing house will have separate entities setup in the US, Candada, the UK and Australia. Each one of these produces the same ebook that can be sold in a restricted set of countries at different prices. This causes all kinds of complications. Take for example a US citizen who in the army who is trying to purchase an ebook in Afghanistan. Do we rely on their IP address or credit card when determining whether they're allowed the book? The is a litany of other examples where territoriality complicates things helping no one, not even the people imposing it.

By 2010 Amazon had cut prices on ebooks to a level where they were losing money on each sale. Their strategy was fairly clear, build a large user base locked into their platform, bankrupt the competition then strong-arm the publishers to get a larger cut of the profits. The publishers freaked out and imposed a new model in the US where all ebook retailers were considered agents and couldn't discount their books; fixed prices across all retailers.

This move means that the publishers have complicated their own business model to the extent where they can't handle it. Taxes down to the city level must be applied to any ebook sales made with the US. The publishers are struggling to ensure all their distributors are complying with fixed prices and Amazon is monitoring this situation closely. How come retailer X is not complying with your fixed pricing but we have to? The publishers are fearing lawsuits with good reason.

I don't know what the answer is. Our only options as an indie retailer is to pursue a mobile based reading experience on either android, wp7 or through the browser (DRM problems come into play here). Everyone has been pushed off IOS since August last year when Apple imposed a 30% commission on any purchases made through an app. This 30% is exactly the same percentage that retailers receive as an agent.