So you are saying price match is a dumb idea; because it is better to pay more if BestBuy cannot get the product at the same low price as WallMart ?
http://www.bestbuy.com/site/Payment...ee/pcmcat204400050011.c?id=pcmcat204400050011
To give you an example:
I bought the BluRay Movie "Leap Year" from ColumbiaHouse.com for $8.89, and on iTunes it costs $14.99 (both are 1080p). Because publishers can charge Apple more than what they charge the company which nowadays runs the ColumbiaHouse web-site. BUT THIS GOOD ?
And don't tell me the 30% which Apple is charging is causing the difference, because as you may know brick-and-mortar stores typically operate with overhead of about 50% - and not to rip you off; but just to make a profit to stay in business (Borders comes to mind).
No... you really don't get it. This isn't even remotely the same thing. For one, we have capitalism and free commerce in the usa. Fixing costs and prices is more akin to communism. Which is also why it's not legal in the USA.
By the way, columbia house is OWNED by the studio... buying from columbia house is almost like buying direct from the content creator in MOST cases. Thus, they make MORE money than you buying the movie from a retailer because it's their movie, made and manufactured by them. That was the case with all the CD clubs back in the day too. The bulk of thier offerings were from their own labels.
Apple didn't just rig the cost of items, but the retail price. Why should anyone not be able to get a sale price on an ebook because apple price fixed an entire industry?? MOST of the time, when Amazon sells a book or ebook cheaper than a competitor, they take a loss on margin to do so. Apple is more than free to let publishers set retail prices if they want... and they are also free to keep a 30% cut.... but that means apple isn't giving you a sale ever. When apple has a promotional price on anything, the content owner is taking a hit, not apple... this is not the same with regular retailers.
Price matching is only smart business. Say best buy's cost on a movie is $9, and they sell it for $19.99... a competitor has it on sale for $9.99... would it be better to make 99 cents and match a price, or totally lose a sale and make $0? And if best buy wants a better wholesale price, they can always elect to buy a larger volume of an item to get that price. That's free enterprise. This is how wal-mart became the behometh it is. They would buy massive bulk of items, sell them cheap, pack their stores, while most other items were not big savings. Over time, they managed to dominate all categories to always have the highest volume of sales and thus the best costs. Any retailer if free to buy in bulk for better costs.
Trying to compare brick and mortar stores to digital media is like apples and oranges. Brick retailers sold their souls years ago by signing contracts with companies for shelf space. Manufacturers would pay a guaranteed amount of money for a certain percentage of square footage or premium space (such as an end cap or have their products at a certain height like on a tv wall). This guaranteed the store money even if they didn't sell the merchandise. The down side to this model is that other products get hidden and don't sell as well or they can't carry certain brands or products because of shelf space agreements and then people turned to discount stores that only sold items at the best price, with less variety such as target or walmart who sells 20 tv models vs 150 at a big box electronics store. Best Buy slit their wrists with those kind of deals, as well as all the major department stores years ago leasing space to designers like polo and tommy hillfiger. Space that used to house other cheaper merchandise that sold better. So look at Target, you will see 10 shelves of Neutrogena products... but maybe 5 facings of a lesser known brand. Target will never having the volume or buying power of the lesser brand because they can't give it any more space because other companies bought the space. You have less choice, but you're probably buying the neutrogena anyway.
Digital media is a different beast... there is no shelf space, no inventory, nothing. Amazon might get a better cost on an ebook because they can negotiate taking larger shipments of print books... but so could someone like Barnes & Noble... who fails to grasp the strategy of volume over margin.
What Apple did wasn't just fix costs, but prices. They made ebooks the same price no matter where you bought them. Consumers did not benefit from it at all. Imagine if they did this in regular retail... you would never need a price matching policy because everything would cost the same. Stores wouldn't be competitive because they'd all have the same price, so who cares where you shopped? That's communism.