Amazon maintains their own inventory for some titles and orders singles from publishers for others. Publishers don't care about Amazon's profits, they care about the other customers that Amazon can and will wipe out via dumping our product.

Why should you care? Well; if you're not particularly worried about having high-quality and relevant manuscripts available then I guess you need not. While there are authors who are or could be successful eschewing a typical publisher there are far more who would prefer to spend time doing what they love and are good at: writing. They also enjoy being paid an advance and thus being assured income regardless of how their books sells. Feel free to rejoice in Amazon's complete dominance of the retail and publishing market should that happen. Just don't complain that without competitors Amazon leverages that monopoly to maintain itself, to increase profits via pricing, and offer a lower quality product.

Apparently, because people keep purchasing them. There is a very clear market for new product.

You greatly misunderstand the way small publishers interact with Apple and Amazon. They dictate the terms to us, not the other way around. I'm not in sales but from what I gather both Amazon and Apple have restrictions on how much we are allowed to charge. If memory serves, no more than the lowest priced physical equivalent.

No, we were not. There are hundreds if not thousands of publishers and if there was collusion going on no one gave us a call to get in on the deal. When we deal with Amazon and Apple the terms our dictated to us, not the other way around. I'm not defending what the big 5 publishers did; I'm just explaining the likely outcome of allowing Amazon to dump their products.

The OP suggests that publishing model is obsolete and good riddance with publishers. So what he is suggesting is to get rid of publishers who take manuscripts, process them, and deliver them to market. You then suggest they be replaced with entities that do the same thing. The entities you describe already exist and they have a name: publishers. Will they have to adapt to the market? Yes,and those that hope to survive must. Would the market be better off if there were no publishers willing to risk author advances, process manuscripts, and deliver them to the market? I believe so, yes.

Quite right, price fixing is bad, although I'm not entirely convince that's what was going on here. At the very least, I work for a small publisher and if there was collusion going no one called us to get in on the deal. You are also correct, this is capitalism at work. In this case it will enable Amazon to dump product and kill competition. If you want to make the case that this is as it should be then so be it. As both a publisher and a consumer I would prefer to have choice in where I purchase my books.

And too bad for the authors and customers as well. You will lose out on the voice of authors who wish to write but can't be arsed with the details or risk of bringing their manuscript to market.

I believe the term your looking for is oligopoly. You have the choice of a monopoly of the retailer or a oligopoly of the big 5 publishers. I would argue the oligopoly is preferable to the monopoly due to barrier of entry. There are hundreds if not thousands of smaller publishers that might not rival the oligopoly in terms of size but we can remain profitable and every once and a while hit it big with a best seller. Amazon is already entrenched as a practical monopoly and I just don't see how any sort of small upstart is going to overcome that. Small publishers can and do exist in the existing oligopoly but small retail outlets will not with Amazon's ability to dump product.

I work for a publisher; it's not Apple's profit margin that we're worried about. It's the hundreds of other smaller retail customers that provide diversity to our customer base. Amazon has, can, and will dump products and that is detrimental to our smaller customers who do not have other revenue streams. If you think retailers are doing just fine I would point you to Borders who, nearly right up to the point they failed, were one of our largest customers. You can make an argument that this is simply how it should be and that's fine but as a publisher we would like to see a diverse range of sellers rather than just Amazon and a bit of Apple on the side.

Monopoly ... mono ... kind of indicates the singular so I don't see how multiple publishers can have a singular monopoly. Certainly, the big 5 can be dickish but there are hundreds if not thousands of smaller publishers out there; I work for one. I would consider dumping product as an abuse of a monopoly and Amazon had done just that with our books in the past and there's no reason they won't do so in the future to further cement their monopoly in online physical book sales and e-books via the Kindle.

I work for a publisher and I can attest that Amazon has indeed sold our books below what they pay us. Amazon can most certainly afford it and they only need to do so long as competitors exist. Book retailers are already struggling so it wouldn't take too long to knock out all but those that have other sources of revenue.

I work for a publishing company and ... this is going to blow your mind ... a significant majority of our authors wouldn't want to have to be responsible for editing, promoting, designing, and selling their product. They also tend to really like that we give them money in advance before they even have a finished manuscript. Their book could sell zero copies but they at least got several grand out of the deal; it's a comforting thought when putting in months of effort. Are there examples of authors out there who do like to take the hands on approach and can it work out for them? Sure. I seriously doubt however that our 60+ year old Amish fiction author wants to try and figure out why InDesign hyphenates across a page break despite being told not to when you add a hyperlink text destination for the table of content.

Why do publishers care about this? I work for a publisher and Amazon has rapidly become our largest customer and is essentially a monopoly in online sales of physical books as well as e-books via the Kindle. Amazon is able to price their products below cost because they have other revenue streams to make up for it; our other customers do not. We would like to see our other customers survive and maintain some diversity in our customer base. If Amazon is allowed to dump their products that will certainly lead to furthering their monopoly. Are there laws and protections regarding dumping? Sure ... but I doubt they would be timely enough to help our already struggling retailers. You can certainly ridicule this as an outdated business model but the publisher's perspective is clear: if you allow Amazon to price their competition out of business via dumping they will, it will work, and the publishing ecosystem will suffer.

>it's with the middle men who take the majority of the profits And the majority of the risk. Publishers put up the author's advance and invest the time and money to bring the book to market before seeing a single dime. If the books is a flop, and a majority of books are flops, the author keeps their advance and the publisher just eats it. The retailers, in most cases, can return the books for a full refund and often enough refuse to pay the publisher.