Money quote from the latest Eric Hellman offering:
eBook portability is Amazon’s kryptonite. If the vaunted Agency Model were not a sham, publishers could simply make portability a standard provision of their agency contracts: "Thou shalt enable portability". And that would be it. No collusion around pricing or discounts would be needed. Amazon could discount the living daylights out of their ebooks, but customers would still judge its competitors on their merits.
Stop what you’re doing and go read the rest of the post. I’ll wait.
As I see it, I’m not why publishers would get involved in the price aspect to this extent; it seems akin to dairy farmers telling Walmart what the price of a gallon of milk should cost.
Eric is right. Locking people into platforms is what gives companies like Apple and Amazon an obscene amount of power over the market. You make books platform agnostic and give people the ability to shift them around as they want and it sucks some of the pricing power out of companies like Amazon. (Either that or raise the wholesale prices and let Amazon figure out how much it wants to soak up in terms of loss leaders.) But the key aspect is to make their books portable which will in turn work to break open the market.
(Note: In posting about eBooks, I do feel like that Michael Corleone quote from the third Godfather movie, “Just when I thought I was out…they pull me back in.”)