And it turns out that publishers didn't notice that Apple had a clause in their contract saying, yeah actually they can heavily-discount, too, but (unlike Amazon, who take the whole hit by cutting their own margins) publishers will have to share the cost of that discount.

http://www.nytimes.com/2010/02/18/technology/18apple.html?ref=books

No.

http://www.fonerbooks.com/booksale.htm

Their removal of books was an attempt to show Macmillan that they needed Amazon not based on money, not based on what we involved in the industry think, but by getting a rise out of the fans.

By capitulating on Sunday night, Amazon made certain that they would get the whole story included in the papers come Monday morning, and appear to be the good guy in the fight to the group that really matters – consumers.

Amazon was pricing at $9.99 because it's a price point that is supported by market research to maximize profits through volume. To achieve market saturation, Amazon was willing to take a loss on each sale in order to grow the market at what they believe to be a sustainable level. That's a hell of a commitment.

Under the Macmillan deal, Amazon will make between $4 and $5 per book which is a mathematically infinite improvement over the previous deal.

Macmillan now does have near-complete control over their own pricing and are capable of adjusting prices at will (or reasonably close to it). This leads to two questions – if publishers won't price books at a level that the market will tolerate, is publishing ready to counter actual eBook piracy? And second, what type of structure does Macmillan have in place to keeping up with royalties owed to authors in an age of dynamic pricing?

Can't say I agree with this. Bookstores still account for the majority of book sales, as I understand it Amazon doesn't account for a huge part of them. I still stand by the statement that Amazon needs publishers more than publishers need Amazon. Bullying them is not the way Amazon should have gone.

From link – Amazon: "…we will have to capitulate and accept Macmillan's terms because Macmillian has a monopoly over their own titles…" [italics added]

To a monopolist, everything is a monopoly, or attempt at monopoly, is it not?

It reminds me of an article I read in some tech magazine I was browsing through, when I was working as a temp, bored out of my mind – software developers were talking politics – one was saying he was a libertarian, because, see, now that we have computers, we don't need government anymore, people should just be free to do whatever they want, unleash their creativity, we'll all be awash in money anyway [I paraphrase and satirize, slightly], so we just don't need that pesky regulation'n'legislation, or extra-pesky concepts like "fairness," or even "justice," all that creaky irrelevant pre-computer socioeconomic "architecture," so to speak.

It's almost a talismanic faith in small devices – because I carry X, therefore (for instance) socialists and fascists will never be battling it out in the streets of my suburb! I'm protected by my iPod! As if certain social disturbances, brought on by economic imbalance (to put it nicely), are precluded by the mere existence of a Kindle or an iPad. But then how'd that hoary word "monopoly," bewhiskered and with a chest full of medals, get into the discussion in the first place?

The problem with that is that the billions are still there – they just go to Apple instead. Not to the musician, not to the record label, not as savings to the consumer – just straight from the consumer to Apple. So, yes, the record company looks at all those billions and goes 'not fair'. And they don't buy as well, they buy instead.

Because it's computers, publisher see the iPad as some holy grail that will get kids reading and make all their books shiny and all singing, all dancing. They think Apple are doing them a favor.

Just imagine, for a moment, that it was just another size of paper book. Call it a padback. Now read the terms of the Apple agreement, pretending it's just some new format of book. No agent or publisher would fall for it. But the iPad's got wireless, so WOW, better just hand over the content for practically nothing.

I think the words in a book are a pretty important component. There are actually plenty of people in publishing who laugh at that idea, but call me old-fashioned.

People will buy an iPad if the content justifies it. They won't if it doesn't. Apple want to get as much content for as little money as they can, and they're going to succeed, because the publishing industry is like a little old lady who falls for the man who comes round offering to take away all her clutter, and he'll do it for only $20, just hand over the house keys. And it's almost funny, because the iTunes model is right there, the old lady next door who did the same with the same guy and woke up the next day to find her house had been stripped bare.

Amazon are on the side of the angels, here. Or, at the very least, they're the ones supporting the core business of publishers – selling actual books for actual money.

It's the same with Amazon. Amazon wants big profits with little outward cashflow. Macmillan wanted to set their own prices which meant Amazon wouldn't get the ridiculously high profits, so they decided to play hardball. And backlash ensued. Someone on another site said that Amazon needs publishers far more than publishers need Amazon, and I agree. They're not the be-all that they think they are.