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swan480
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Re: I will not buy any more eBooks

I think people need to remember that "what the market will bear" is not simply an on or off switch.  With every increase in price, fewer people will be willing to pay it.  The publisher will make more on each copy, but sell fewer copies.  With physical books especially that's a big deal, because by selling fewer products at a higher cost, they can make the same amount of money but with fewer expenses, since each paper book costs them something to produce.  With ebooks it's not as pertinent, because the cost of editing, cover design, etc. is the same whether they sell one ebook or one million, but the equation is still there.

 

But back to my point: It's not an on or off switch.  As the price goes up, fewer people will buy, but it's not like there's a magic number at which "yes everyone will pay that" changes to "no NO ONE will pay that."  Sales drop off the more the price increases -- generally.  Of course there are exceptions such as Ken Follett's $19.99 bestseller, but I think you'll also find that there are a whole lot of people who are absolutely horrified and would never pay that price.  For those of us who wouldn't, it's disheartening to see the publishers latching onto that idea and raising prices across the board.

 

A lot of people on this board act like the $9.99 "limit" Amazon came up with is a number they pulled out of their backside, but I don't think it is.  It's a number derived at by market research.  Map out price versus number sold to determine profit, and you'll get a curve.  I'll bet $9.99 is at the top of the curve.

 

I know it applies to me.  Once something gets into double digit pricing, it just feels a whole lot more expensive, even if it's only a difference of a couple of bucks.  We are, after all, talking about something that provides me with about 2 days' entertainment, tops.

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LarryOnLI
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Re: I will not buy any more eBooks

Like Swan480 said, it's not an on/off switch.

 

The higher the cost of a book, the lower the number that will be sold.

 

However the decision on what point maximizes profit is not a guessing game. There is an equation we were taught in Quantitative Methods, which I took when working toward my MBA many years ago.

 

This equation tells the publisher at what point the drop in sales offsets the increase in price and helps them determine the price point of the book.

 

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ABthree
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Re: I will not buy any more eBooks

 


swan480 wrote:

 

A lot of people on this board act like the $9.99 "limit" Amazon came up with is a number they pulled out of their backside, but I don't think it is.  It's a number derived at by market research.  Map out price versus number sold to determine profit, and you'll get a curve.  I'll bet $9.99 is at the top of the curve.

 


 

Yes, it was derived by market research:  a whole raft of research going back many years, and indicating that "$x.99" sells better than "$y.00", when y =(x+1) (one cent difference).

 

But it was never meant to make money.  It wasn't that kind of market research.

 

The best informed guess has always been that Amazon and those pricematching Amazon at $9.99 were paying the publishers wholesale price for eBooks -- half of hardcover list, or $12 -$13 each.  No one involved will say so on the record, but the interpretation is out there, and no one is denying it, either.  So, Amazon was selling every eBook at a $2 - $3 loss.  Why?

 

For two reasons.  First, to ramp up the eBook market, and that certainly worked.  Second, because they could make everyone else do the same:  they could stress the competition.  Amazon figured, probably correctly, that they could stand to lose more money, and lose it longer, than their competitors.  Maybe long enough for their competitors to throw in the towel.

 

Amazon's strategy was derailed by the Agency Model:  that's why they hate it so much, and have been so vocal about it.  In contrast, B&N, Borders, Kobo and Sony have been silent.  They may not like losing pricing power to the publishers, but for them it was purely theoretical, anyway:  Amazon was setting the price for everybody.  But you can bet that they like making 30% on every eBook they sell, instead of losing $2 - $3.:smileywink:

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swan480
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Re: I will not buy any more eBooks

 


ABthree wrote:

 

 

The best informed guess has always been that Amazon and those pricematching Amazon at $9.99 were paying the publishers wholesale price for eBooks -- half of hardcover list, or $12 -$13 each.  No one involved will say so on the record, but the interpretation is out there, and no one is denying it, either.  So, Amazon was selling every eBook at a $2 - $3 loss.  Why?

 


I highly doubt those figures are correct.  Since the majority of agency ebooks are NOT $12.99 or higher, and since the publishers now pay the bookseller 30 percent of that, your figures would mean that the publishers are now selling ebooks at less than they were getting wholesale.  Even an ebook priced at $14.99 would only bring the publisher $10.50.  Why would they do that when they could (if what you say is correct) get an easy $12-$13 per ebook?

 

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mscott9985
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Re: I will not buy any more eBooks

I usually avoid buying new release e-books (unless they are indie publishers who tend to be less expensive), but sometimes I buy the e-version because it is simply easier to deal with on an e-reader.

 

For example, my book club just read Gone With the Wind.  I bought a copy because I knew I'd never finish it by the time it was due back to the library.  And I loved the e-edition because it was much lighter to read and easier to carry than the 1,000+ page paper version!

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pixichick
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Re: I will not buy any more eBooks

There are a lot of books out there that are priced high, I won't disagree with you there, but there are also so many good quality books that author's run on promotin for a time for .99 or $2.99 - several of my friends who are authors, including myself, do this. It's usually when the book first comes out. There are so many options out there at this price point - just wanted to pass that along :smileyhappy:

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bklvr896
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Re: I will not buy any more eBooks

 


swan480 wrote:

 


ABthree wrote:

 

 

The best informed guess has always been that Amazon and those pricematching Amazon at $9.99 were paying the publishers wholesale price for eBooks -- half of hardcover list, or $12 -$13 each.  No one involved will say so on the record, but the interpretation is out there, and no one is denying it, either.  So, Amazon was selling every eBook at a $2 - $3 loss.  Why?

 


I highly doubt those figures are correct.  Since the majority of agency ebooks are NOT $12.99 or higher, and since the publishers now pay the bookseller 30 percent of that, your figures would mean that the publishers are now selling ebooks at less than they were getting wholesale.  Even an ebook priced at $14.99 would only bring the publisher $10.50.  Why would they do that when they could (if what you say is correct) get an easy $12-$13 per ebook?

 


 

Here's a NYT article that discusses the Amazon pricing.  And, the agency model negotiated an entirely new pricing strategy, and from everything reported last year, the retailers ARE actually making more money under this model.

 

http://www.nytimes.com/2009/05/17/weekinreview/17rich.html?_r=1&adxnnl=1&adxnnlx=1300323600-heWBGoMb...

 

To the OP, if, as others have said, the book was previously published straight to paperback and the publisher has now decided it warrants a HC, then you are paying for the privilege of reading it right away.  If there were no eBooks, then the newest release would be much more expensive than the previous book simply because the format changed to HC.  To get it at a price comparable to the previous release, you'd have to wait for the paperback.  This happens a lot with series books, they are released exclusively in paperback, they become popular and now they are released in HC.  Take ebooks out of the equation and you'd still be in the same situation.

 

To Rainy1750, you said: "I agree that the prices of the ebooks are going up and making it not worth while to purchase any of the new books when i can get it for free at the library.  I bought the Nook and enjoy reading on it but if i can get a paperback for less $$ in the stores or at the library, I do so.  I think the fact that we all purchased the Nooks and now have to pay these increases is not fair to the consumers, who are once again getting screwed by corporate America.  The same thing goes for the Kindle and amazon."

 

Since the publishers set the price for the vast majority of books, the prices are going to be the same everywhere.  I was looking at HC books last night and what I'm noticing is that HC books are going up in price, paperback books are going up in price.  And so is gasoline, food, and just about everything else.  Why do you expect ebooks to be exempt? 

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ABthree
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Re: I will not buy any more eBooks

[ Edited ]

 


swan480 wrote:

 


ABthree wrote:

 

 

The best informed guess has always been that Amazon and those pricematching Amazon at $9.99 were paying the publishers wholesale price for eBooks -- half of hardcover list, or $12 -$13 each.  No one involved will say so on the record, but the interpretation is out there, and no one is denying it, either.  So, Amazon was selling every eBook at a $2 - $3 loss.  Why?

 


I highly doubt those figures are correct.  Since the majority of agency ebooks are NOT $12.99 or higher, and since the publishers now pay the bookseller 30 percent of that, your figures would mean that the publishers are now selling ebooks at less than they were getting wholesale.  Even an ebook priced at $14.99 would only bring the publisher $10.50.  Why would they do that when they could (if what you say is correct) get an easy $12-$13 per ebook?

______________________________________________

 

From their point of view, they have an industry to save from the threat of eBooks, and short-term profits mean little in comparison.  They'd rather have pricing control than the profits they were making without it, just as Amazon would rather have pricing control than profits, period.

 

Pricing control gives them the ability to direct sales away from eBooks, which I believe is something that they desperately wanted, and their inability to do it under "Amazon Rules" was what galled them the most.

 

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swan480
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Re: I will not buy any more eBooks

 


ABthree wrote:

 

 

Pricing control gives them the ability to direct sales away from eBooks, which I believe is something that they desperately wanted, and their inability to do it under "Amazon Rules" was what galled them the most.

 


 

Still doesn't make sense, because how does losing money help them steer people away from ebooks?  According to the figures given, publishers are losing money on ebooks, even though they have already achieved pricing control, and there is nothing to stop them from hiking prices even more.  If they really wanted to cripple the ebook industry, isn't that exactly what they'd do?

 

I just don't think those figures could possibly be correct.

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swan480
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Re: I will not buy any more eBooks

Said in another way: They've already achieved pricing control, they don't have to take a loss in order to do so.  That's what pricing control is, right?  And if they don't care if they cripple the ebook industry, if in fact they want to do so, why are they still taking a loss?

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ABthree
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Re: I will not buy any more eBooks

 


swan480 wrote:

Said in another way: They've already achieved pricing control, they don't have to take a loss in order to do so.  That's what pricing control is, right?  And if they don't care if they cripple the ebook industry, if in fact they want to do so, why are they still taking a loss?


 

I don't know where you get that they're taking a loss on eBooks -- they're not.  They may be foregoing profits by depressing sales, but that's not taking a loss.

 

You seem to assume that the publishers want to foster the growth of eBooks, as Amazon and B&N do, and strengthen them as a profit center.  Nothing could be further from the truth.  The people who run publishing houses see their business as selling "books".  "Book" has a very specific meaning for them:  it's an object made of paper, cloth, glue and ink that contains information.  A "book" is definitely NOT the information itself.

 

Since their business is selling "books", the information in some other form isn't an alternative or a supplement, it's a threat.  It's too late for them to extinguish the threat, but they can use their pricing control to try to limit it.  The attitude of the publishing houses toward eBooks reminds me of GM's attitude toward the EV1 electric car during the '90s:  if the publishers could gut them as GM did the EV1, I think they would.

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swan480
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Re: I will not buy any more eBooks

 


ABthree wrote:

 

I don't know where you get that they're taking a loss on eBooks -- they're not.  They may be foregoing profits by depressing sales, but that's not taking a loss.

 


 

The loss I mentioned is compared to what they were getting from Amazon.  If Amazon was truly paying them $12-$13 per ebook, and taking a loss by selling them at $9.99, now the publishers are getting less per ebook than they were before (even a $14.99 ebook only gets them $10.50 after the bookseller's 30 percent cut).  Since they 1) now have control of the prices and 2) don't want to support the industry (which I agree with, as I've said already), then why would they settle for less than what they were getting for ebooks under the old pricing strategy?  It just doesn't make sense.

 

What I am saying is that I don't believe that Amazon was really paying the publishers $12-$13 per ebook.  I think if they had been, as soon as the publishers had pricing control, they would have raised prices to about $17.99 per ebook.  That would give them $12.50 or so after the bookseller's cut, similar to what they were (supposedly) getting from Amazon, and have the added advantage (to them) of detering people from buying ebooks.

 

Again, my argument here is not about whether the pricing is correct, but whether Amazon really could have been paying that much per ebook.  As you (or someone earlier in the thread) said, it's all rumors, and hasn't been confirmed.

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ABthree
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Re: I will not buy any more eBooks

[ Edited ]

 


swan480 wrote:

 

 

The loss I mentioned is compared to what they were getting from Amazon.  If Amazon was truly paying them $12-$13 per ebook, and taking a loss by selling them at $9.99, now the publishers are getting less per ebook than they were before (even a $14.99 ebook only gets them $10.50 after the bookseller's 30 percent cut).  Since they 1) now have control of the prices and 2) don't want to support the industry (which I agree with, as I've said already), then why would they settle for less than what they were getting for ebooks under the old pricing strategy?  It just doesn't make sense.

 


 

You still seem to be caught in that old fashioned Marxist paradigm that says all that the evil capitalist wants to do is maximize immediate profits all the time. Not true, if the strategy is to weaken, or at least to limit the growth, of the particular activity in question.

 

When GM bought up most of the streetcar lines in the country in the '50s, it didn't jack streetcar fares through the roof to make big profits:  it didn't WANT to profit from streetcars at all.  It wanted to be able to say that the streetcar lines were UNprofitable, so it could scrap them and replace them with buses.  Which is exactly what happened.  Similarly, the publishers aren't managing eBook pricing for profit maximization, they're managing it for control.

 

There's a second reason why the publishers might have chosen to go easy on pricing, at least early in the life of the Agency Model.  From 1911 to 2007, arrangements like the Agency Model were illegal in the United States.  In the Leegin case in 2007, the Supreme Court reversed the previous rule and introduced enough doubt that the Agency Model could be considered legal unless it fails a court test.

 

The publishers certainly don't want that court test to ever take place.

 

The investigations of the Agency Model on the state level don't seem to be getting anywhere.  Consistent price gouging by the publishers could breathe new life into those investigations, and launch more.  Pricing that people find annoying but not outrageous may help them stay out of court.

 

PS The description of Amazon's pricing is based on more than "rumors".  It's from the educated guesses of people who know how the industry operates, that HAVE been published.

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LarryOnLI
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Re: I will not buy any more eBooks


swan480 wrote:

 


ABthree wrote:

 

 

The best informed guess has always been that Amazon and those pricematching Amazon at $9.99 were paying the publishers wholesale price for eBooks -- half of hardcover list, or $12 -$13 each.  No one involved will say so on the record, but the interpretation is out there, and no one is denying it, either.  So, Amazon was selling every eBook at a $2 - $3 loss.  Why?

 


I highly doubt those figures are correct.  Since the majority of agency ebooks are NOT $12.99 or higher, and since the publishers now pay the bookseller 30 percent of that, your figures would mean that the publishers are now selling ebooks at less than they were getting wholesale.  Even an ebook priced at $14.99 would only bring the publisher $10.50.  Why would they do that when they could (if what you say is correct) get an easy $12-$13 per ebook?

 


Actually this fact was discussed by the publishers when the agency model was first being implemented a year ago.

 

McMillan and other publishers acknowledged that they would actually make less per copy from the new pricing model.

 

ABThree missed a third and fourth reason why Amazon was willing accept a loss on eBook bestsellers.

 

Third: Only current New York Times bestsellers were promised at $9.99, other books were priced dependently, with some cheaper, and some much more. By luring customers in with the $9.99 loss leader, Amazon had the chance to sell eBooks with a much higher profit margin.

 

Fourth: Using the $9.99 price point, Amazon hoped to grab the lions share of the eReader market. Once the majority of eBook purchasers were locked into the Kindles proprietary format, they could have down whatever they wanted with prices.

 

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LarryOnLI
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Re: I will not buy any more eBooks

[ Edited ]

@ABThree, et. al.

 

You and others seem to think that publishers are trying to hold back eBooks in favor of hard cover, and even paper back book sales.

 

I disagree with this assumption.

 

My opinion is:

 

1) Publishers realizes (like everyone else) that the future of their industry is in electronic media.

 

2) Publishers pushed the Agency model for a number of reasons including,

 

 

  • Amazons domination of eBook retailing was threatening to limit them to a single distribution channel which would put them at the mercy of Amazon.
  • The traditional retail model where the retail purchases the item before being able to sell it does not really apply to eMedia (unless you really think B&N bought 100 e-copies of the latest bestseller, and when they run out will have to restock).
  • They were blinded by Apple along with everyone else, and in order to be in the iBook store they had to have control of pricing.

 

 

3) Most eBook sellers don't object to the Agency model because that frees them from having to compete on price with Amazon, which given it's size is impossible to do long term.

 

4) Most publishers realize that consumers won't pay HC prices for eBooks and so price them cheaper, but not at bargain prices.

 

5) The only reason that DTBs are available for less than eBooks at times is because the retailers are still allowed to offer discounts on them. If everything was sold at list price, the eBook would almost always be equal to or lesser in price than the DTB.

 

edited to add:

 

6) The $3.00 to $4.00 less that the publihers are getting under the agency model is almost exactly equal to the actual cost savings of an eBook over a hard cover.

AlanNJ
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Re: I will not buy any more eBooks

 


LarryOnLI wrote:

@ABThree, et. al.

 

 

3) Most eBook sellers don't object to the Agency model because that frees them from having to compete on price with Amazon, which given it's size is impossible to do long term.

 

 


It also gives the e-book sellers immunity regarding pricing complaints.

 

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LarryOnLI
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Re: I will not buy any more eBooks

 


AlanNJ wrote:

 


LarryOnLI wrote:

@ABThree, et. al.

 

 

3) Most eBook sellers don't object to the Agency model because that frees them from having to compete on price with Amazon, which given it's size is impossible to do long term.

 

 


It also gives the e-book sellers immunity regarding pricing complaints.

 


 

Yes it does, which is probably also very attractive.

 

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ABthree
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Re: I will not buy any more eBooks

 


LarryOnLI wrote:

@ABThree, et. al.

 

You and others seem to think that publishers are trying to hold back eBooks in favor of hard cover, and even paper back book sales.

 

I disagree with this assumption.

 

My opinion is:

 

1) Publishers realizes (like everyone else) that the future of their industry is in electronic media.

 __________________________________________________

 

You could be right and I could be wrong -- time will tell.  But I think that the people running the publishing industry now have a mindset like the people did who ran the automobile and recording industries in the past.  I agree with you on the future of their industry, but I think that THEY'RE still in deep denial.

 

 


LarryOnLI wrote:

@ABThree, et. al.

 

 

3) Most eBook sellers don't object to the Agency model because that frees them from having to compete on price with Amazon, which given it's size is impossible to do long term.

 

 


 

And it stopped the immediate bleeding, which had to be extreme -- don't forget that.

 

 


LarryOnLI wrote:

@ABThree, et. al.

 

 

5) The only reason that DTBs are available for less than eBooks at times is because the retailers are still allowed to offer discounts on them. If everything was sold at list price, the eBook would almost always be equal to or lesser in price than the DTB.

 


 

Not so.  There's no huge demand for discounting on Ayn Rand's DTBs:  it's plausible to believe that the price differential is intended to distort the market, away from eBooks and toward DTBs.  That's the most extreme example, but not the only one that can be found since last April.  I predict that we'll see more, as people become used to the Agency Model and accept it as "normal".

 

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+in your kindness, make the wicked become good.+
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swan480
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Re: I will not buy any more eBooks

This is evolving into a highly frustrating conversation.  My main argument here just has to do with whether the unconfirmed $12-$13 price that Amazon was paying was true.  I can't help it -- I will always be skeptical anytime someone says, "We have no proof, but..."

 

And I just don't see the big publishers gaining pricing control just to do what they're doing with the prices.  If they dropped the prices, they'd sell more -- a lot more, judging by how many people I see complaining about the prices of ebooks.  If they didn't like the ebook industry, as some people have claimed and others denied, they would raise the prices even more and cripple the industry.

 

Am I upset about the increases in prices lately?  Sure.  It means I can afford to buy fewer ebooks.  Do I understand why ebooks are priced the way they are?  Of course.  It annoys me why new releases were $11.99 four months ago and $14.99 today, but I get that they are experimenting with prices.  Still, knowing that I used to be able to buy them for less is a difficult pill to swallow.

 

But really aggravates me is when prices go up on a book that has been in print for a while.  As we established earlier in the thread, the OP's example was wrong, but I have seen it happen, and that is the most upsetting thing to me.  We're talking about older books where the demand has dropped significantly, most of the big expenses (cover design, editing, etc.) has been recouped long ago, and their best way to sell more books is to price them low enough that people will buy them without thinking about it too hard.

AlanNJ
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Re: I will not buy any more eBooks

 


swan480 wrote:

This is evolving into a highly frustrating conversation.  My main argument here just has to do with whether the unconfirmed $12-$13 price that Amazon was paying was true.  I can't help it -- I will always be skeptical anytime someone says, "We have no proof, but..."

 

And I just don't see the big publishers gaining pricing control just to do what they're doing with the prices.  If they dropped the prices, they'd sell more -- a lot more, judging by how many people I see complaining about the prices of ebooks.  If they didn't like the ebook industry, as some people have claimed and others denied, they would raise the prices even more and cripple the industry.

 

Am I upset about the increases in prices lately?  Sure.  It means I can afford to buy fewer ebooks.  Do I understand why ebooks are priced the way they are?  Of course.  It annoys me why new releases were $11.99 four months ago and $14.99 today, but I get that they are experimenting with prices.  Still, knowing that I used to be able to buy them for less is a difficult pill to swallow.

 

But really aggravates me is when prices go up on a book that has been in print for a while.  As we established earlier in the thread, the OP's example was wrong, but I have seen it happen, and that is the most upsetting thing to me.  We're talking about older books where the demand has dropped significantly, most of the big expenses (cover design, editing, etc.) has been recouped long ago, and their best way to sell more books is to price them low enough that people will buy them without thinking about it too hard.


 

Don't forget that the B&N message board is not necessarily typical of the average user.  My observation is that most people just pay the price that is asked whatever it is and don't question it.  I know a number of people with e-readers and if I bring up the Agency 5 (6 now) I just get a blank stare back.

People just don't think about price if it's something they want.

Just my opinion.

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