So, in your doomsday scenario, I get books for $5 and authors make more money? I'll take it.
The crux of Stross's argument for why we should fear Amazon's low prices is that it's "predatory pricing"--that Amazon was selling e-books below cost so they could jack up the prices later after they had their monopoly (or, equivalently, lower payments to authors after they were a monopsonist).
But apparently Stross didn't read the DOJ complaint, because it turns out Amazon's e-bookstore was consistently profitable! 9.99 bestsellers were just the equivalent of cheap milk at grocery stores--loss leaders.
The DRM prediction in the article is pretty good, but both you and Stross misunderstand why Amazon is winning. It's not because they're cheating--it's because they're more efficient and so can make money at lower price points.
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.
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.
Especially in terms of cloud email, isn't that going to be true of any service provider you choose? That has nothing to do with monopolies, it's just the nature of the beast. People you buy services from can stop providing those services.
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.
Okay, but email is a highly competitive business. Competition doesn't mean you don't make customers unhappy, it just means you're judicious about how/when you do it. Any time you have to balance customer needs with abuse mitigation and legal compliance, you're going to have to do some things that make some customers unhappy in the name of being able to provide the wider service.
"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.
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.
(Sorry for second response to same message.)
It seems like your beef shouldn't be with Amazon. It should be with the rest of the industry for failing to compete. Otherwise it's like complaining that Apple is dominating the smartphone industry by delivering better products -- that's what they're supposed to do.
The crux of Stross's argument for why we should fear Amazon's low prices is that it's "predatory pricing"--that Amazon was selling e-books below cost so they could jack up the prices later after they had their monopoly (or, equivalently, lower payments to authors after they were a monopsonist).
But apparently Stross didn't read the DOJ complaint, because it turns out Amazon's e-bookstore was consistently profitable! 9.99 bestsellers were just the equivalent of cheap milk at grocery stores--loss leaders.
The DRM prediction in the article is pretty good, but both you and Stross misunderstand why Amazon is winning. It's not because they're cheating--it's because they're more efficient and so can make money at lower price points.