How does this result in a better situation for consumers? The publishers have no incentive, as has been empirically shown, to ever lower their prices on a given book. And as they have the monopolies on particular titles — i.e., most books are not fungible for similar titles — there is no price competition between publishers. One could argue that if Publisher A has a particular bestseller at $11 and Publisher B prices its bestsellers at $10, that’s competition, but do consumers really see it that way and does the market actually function in this manner?

Go back to the wholesaler model and let the market function in an unfettered fashion. If Amazon truly drives others out of business, then there’s an antitrust case to be had.

The original WSJ notes that in some cases print book prices are lower than e-book prices but doesn’t explain why: In those cases publishers set the e-book prices but Amazon buys the print books wholesale so it can set their prices however it wants. Amazon is large enough to be able to take a loss on the print books (i.e., it can sell them to customers for less than the wholesale price). So when you see an e-book priced higher on Amazon than a print book, you need to think about what is going on behind the scenes. The publishers aren’t pricing e-books higher than print books; Amazon is.

But Digital Book world didn’t show anything in that article. In fact, all they do is refer to the WSJ report. So let’s go straight to the source WSJ article instead of using the DBW link spam.

Reading the WSJ article in the original (http://online.wsj.com/article/SB10001424052970204336104577096762173802678.html) the story is that consumers ARE paying more for ebooks than physical copy (what all of us e-readers have been screaming). The irony is however, that publishers are making less, while charging more, given how the price sharing arrangements work.