Moral Calculus Elucidated

Amazon, apparently no longer all that comfortable with the role that it has settled into during the course of its ongoing standoff with the publisher Hachette — unrepentant and unyielding monopoly monster — now wishes to explain itself:

It’s also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less. We’ve quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. … Is it Amazon’s position that all e-books should be $9.99 or less? No, we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99.

This is all strictly true, of course — numbers don’t lie, except when they do — if you grant Amazon its central premise, which is that all books (except those exceptional exceptions!) are worth precisely one penny less than ten dollars, regardless of what’s inside of them.

Photo by Conrad Bakker