Apple Entry into Market Means Higher eBook Prices

And you still ignore facts, just so you can argue about a situation that doesn't actually exist. The entire Kindle business uint results are reported by Amazon, more granular data is not. The unit has been said to be self-sufficient. Who cares about unit sales? The BU is profitable.

New releases may or may not be subsidized, as the terms of the deals with the publishers are not known. Catalog titles are not. Subscriptions and blogs are also high-profit.

The fact that a company might defray the cost of one thing, with the profits of another, is nothing new. As I stated before, you need to get off your high-horse since every company known to man does this. The very essence of new product R&D is taking from one mouth to feed the other. Product subsidies are also common within pretty much every industry. Look at groceries, airline routes, high tech, wireless, entertainment, auto-parts, distribution, health care, pharma, and the rest too.

And even if you *resented* Amazon for reallocating funds, it still doesn't change the fact they're the cheapest place to buy books from any major vendor (retail or otherwise), so I'm not really sure who you think they're maligning by their choices.

Please, don't give me the Rand stuff. It's pretty obvious you don't realize her arguments are vastly more complicated than they are. She has absolutely no problem with a company doing whatever the heck it wants, as long as the government isn't involved. She loves monopolies too, because she feels that the best company should always win. You're just livid because Apple sent you a memo to hate Amazon, so you need any excuse possible. And now you're misinterpreting a philosopher to try to bolster your argument, right along with making up facts on the solvency of the Kindle unit.

"Also, the kindle unit and related sales are profitable in and of itself without any external influence. Bezos' statements make it apparent we're *now* dealing with self-sufficiency. So you can get off your wealth-redistribution high-horse.."

The nonsense in that statement is self-evident. "Bezos' statements make it APPEAR..."

Amazon releases no sales figures on Kindle, so you are totally blowing smoke, assuming that what you want to be true IS true. Wishing doesn't make it so. Kindle sales may have a net profit from the hardware, in fact probably so.

But the real point is that Amazon subsidizes 33% of the true cost of ebooks from it's other customers and products. This is, as you certainly understand (or, do you?) very different than recouping DEVELOPMENT costs of a new product, it is a subsidy on every unit sale. Not the same thing AT ALL as paying off development costs, because the expense will never go away.

In any event, this will shake out. Apple started music sales at a flat $0.99 per song, Amazon entered the music market, remember? Prices went UP just as in the case of ebooks, because the content providers now didn't have to deal with monopoly digital format purveyor. In the end, consumers got something good out of this, no DRM.

Markets will again work, content providers, delivery systems and consumers will reach an equilibrium. I cannot believe I'm saying this to someone who claims to be a follower of Rand....

"Christopher, you're wackier than Paul"

I'm pretty certain 100% of people who are impartial in their technology buying would think I'm rational and you're refusing to engage in a thoughtful debate. You insist on simplicity that doesn't exist in the real world (things aren't black and white, which is why I can't debate evangelical non-denominational folks since they're too dense).

My examples are still valid, and Rand really wouldn't care what a company does internal to itself. She'd support their right to do whatever the heck they want with their capital without outside intervention. The only thing she would be mad about is if government subsidies were in-play..

By your ridiculous reasoning you could never take money from a successful business-unit and spend it on a new one, since the new one isn't profitable from day-1. Congrats, if you ran the world new products would never get created. R&D and launch costs/incentives are always going to be sunk (and eventually offset if you're lucky).

Do you get upset at Apple because your Mac purchases are subsidizing Apple TV? What about Sony, since they're still clawing out of PS3 debt?.

Also, the kindle unit and related sales are profitable in and of itself without any external influence. Bezos' statements make it apparent we're *now* dealing with self-sufficiency. So you can get off your wealth-redistribution high-horse..

At least Yoshi doesn't take the view that I'm an idiot, and I've enjoyed our dabate. I'm guessing it's because he takes the premise he knows he won't change my mind, and vice versa, so we're just hashing it out to figure out where the other is coming from.

"The demographics of the market .... are so insignificant"

Well, I think that's not the case... The trade groups, vendors, etc, know they can bilk the consumer for more. Apple purchasers have less price sensitivity than most. Also distro costs aren't increasing that much. Fixed costs are low to begin with, variable up a tiny bit.

"The only commonality between music and book publishing is that they are represented by an overbearing trade-group on the back-side and modern large e-tailers tend to carry both, but classically the brick and mortar side has been more distinct."

That is by far the most important part of the equation. The demographics of the market as you suggest are so insignificant compared to this, that they don't even matter.

In each case, music, video, books, magazines, etc. you have a classic market that was driven by physical media where the provider had almost complete control over distribution & pricing. In each case, the market is changing towards a digital distribution.

Right now digital content represents a fraction of overall sales. However, that fraction is steadily growing.

The content providers in each case tested out the digital market, and now that they are becoming popular, are seeing their revenue decline as digital pricing is generally less than physical. As digital sales increase and physical sales decrease, the per unit cost of physical media becomes more expensive. This scares the content providers as the physical sales still represent a majority. They are scrambling to raise prices at every opportunity they have on the digital media.

Music, movies, TV, books, magazines, any content that was previously sold in a physical media that is now going digital is basically in the same boat. The lessons of one most certainly apply to the next. Its thinking like yours that leads these industries to the problems they face with how to embrace digital distribution.

Christopher, you're wackier than Paul, and that's going some.

You cite ---Ayn Rand---as part of some bizarre rationale for why Amazon should subsidize ebooks from its other sales. That is beyond comical and like citing Karl Marx in support of laissez-faire capitalism. Your strange and incomprehensible justifications make no sense at all.

One part I do understand. You (and Paul) LIKE the Amazon subsidy, paid by people like me, who buy paper books from Amazon, for where else do you think they get the money? Ayn Rand would sneer at you for that.

This whole ebook pricing issue is about markets, not Apple, or any other single vendor of delivery and display systems. Paul's attempt at another "evil Apple" article is his lamest one yet.

You each have a simple solution: Don't buy the product, iPad or ebooks, if you don't like the price.