http://mediadecoder.blogs.nytimes.com/2012/04/11/justice-files-suit-against-apple-and-publishers-over-e-book-pricing/?scp=4&sq=ebook%20amazon&st=Search
This is an amazing example of the government's role in intervention. The court suits Apple and publishers for price-fixing, which is a deliberate attempts to use oligopoly power to influence the price.The result of their action is a market failure and a higher price for consumers.
However, as the government intervenes and potentially lowers the price, publishers have least incentive to produce. In the battle with book pirates, publishers already loses much of their intellectual property rights and has much less profit than before. That being said, another punch from the government to knock off the price may negatively impact the production of books in the U.S.
This is an amazing example of the government's role in intervention. The court suits Apple and publishers for price-fixing, which is a deliberate attempts to use oligopoly power to influence the price.The result of their action is a market failure and a higher price for consumers.
However, as the government intervenes and potentially lowers the price, publishers have least incentive to produce. In the battle with book pirates, publishers already loses much of their intellectual property rights and has much less profit than before. That being said, another punch from the government to knock off the price may negatively impact the production of books in the U.S.
5 comments:
One way to change the ebook industry would be to allow users to resell their books just as they would with tangible hardcover ones, and give a percentage of the profit to the publishers.
It seems to me that forcing e-book providers to lower prices won't hurt them as much as it would if they were producing a physical item. It the marginal cost of supplying addition e-books is extremely low: it consists only of providing more bandwidth. In terms of book pirating, I think that most people who pirate books, or anything else for that matter, are people who would rather go without whatever it is they are pirating than pay for it. If people are presented with a convenient way of buying something, they are much more likely to buy it.
I agree with the comment above that reselling ebooks could be a way out. But on the other side, reselling ebooks could also result in a ruleless online market. Untill now, the ebook reader sector still have the situation of monoploy, Nook, Kindle and iPad tool most of the market part.
As each coin has two sides, I agree that government intervention might bring harm as well as benefits to the market. The point is that whether the regulations will benefit the market or it will do more harm to the market. Or, there should be a balance. In my opinion, Kritika’s advice as mentioned above is a feasible one. This will make more profits to publishers and authors and at the same time it will protect consumers from bearing a (unreasonable) high price.
I think that reselling might be less feasible than merely renting the book for a lower price or buying the book for a lower price. As pointed out above, the cost of production of an ebook is much less than a physical copy and I don't believe that the lowering of prices a little bit would drastically harm the ebook companies.
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