The potential supply chain impact of eliminating agency pricing for ebooks

An article in the Wall Street Journal (September 8,2012) describes a settlement by a set of publishers and the department of justice and elimination of the scheme whereby publishers set retail prices and paid a percent of retail price go the retailer of e-books to Apple and their retailers. As a result of the new rules, Amazon.com is expected to discount books significantly. But publishers and authors worry that such price competition will cause drops in author and publisher total revenues if, as they expect, demand volumes do now grow significantly. Will competition across retailers like Apple and Amazon ruin the market for publishers ? Would you expect Apple and Amazon to drop prices significantly, but make money on the hardware hey sell i.e., iPads and Kindles ? How can the supply chain be coordinated in the new environment?

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About aviyer2010

Professor
This entry was posted in Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

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