Amazon/Hachette Business Interruption
While I believe they saw these numbers, specifically that lowering the price from $15 to $10 lead to a 74% increase in purchases, I don't believe that this is a good general rule of thumb. Here's the problem: there are only so many potential ebook readers out in the world, and they only have so much time. This means there will be market saturation at some point, or at least market movement. This elasticity is there, for sure, but the relationship between price and purchases is not going to stay the same, especially as <i>everyone follows this advice</i>. Basically, everyone will price their books at $10 and the playing field will be level. Then the advice will be to price your book at $7. Then at $5. Then at $2. Then at $0.99 cents. This is the problem we currently see with Apple's App store and the Google Play Store: too many apps, all priced similarly. For most apps, and probably for most ebooks it would almost be better to go in the exact opposite direction: one sale at $1000 is better than 10 sales at $1.<p>Also, why would Amazon care so much about how others market their content, to the point of trying to interfere? If your content is not worth $15, then nobody will buy it. If you suck at marketing, nobody will know to buy your (possibly great content). Why does Amazon get its hands dirty instead of simply giving you analytics-backed suggestions? Oh, that's right, because controlling the publishers is more profitable for them, and using their market position as leverage against publishers is a great way to do so.