I suspect cock-up rather than conspiracy. I have to deal with Amazon's payment system in my day job and, frankly, it's a humongous pile of cack. Their procedures are inflexible, seemingly arbitrary and prone to behaving in unexpected ways. Account managers, while pleasant enough, are completely incapable of working round their system's limitations.
I can well imagine that they'd cut off an account like Unglue.it just because "computer says no" and then scrabble around trying to justify it rather than fixing the problem which led to the account being flagged in the first place.
Something that seems to have been overlooked by the traditional publishers is that physical books take up a lot of space if you have plenty of them. And, while individually they are portable enough, in bulk they are not. So there's a practical upper limit on the number of physical books that most people can reasonably own.
By contrast, e-books take up no physical space at all beyond the size of a single display unit, and only a fairly small amount of electronic space. I can fit more books on my Nexus 7 than I can on the shelves of my study, and, unlike my physical books, I can take them all with me wherever I go.
What that means is that e-books can be much more of a speculative purchase than physical books. Without considerations of storage and transport space, the only issue is the cost. At traditional prices, I have to be pretty sure that I'll enjoy it before I'll part with my cash. But bring the price down, and I'm far more likely to buy a book just on the off-chance that I'll like it.
This is a market that traditional publishers haven't really tapped in the past, because the realities of physical book transport and storage mitigate against large-scale speculative purchase and so reducing prices doesn't increase sales enough to offset lower unit revenue. But the evidence is that for e-books, it does. The successful publishers of the future will be the ones which adapt to the new reality.
Another big difference is that if I buy a legitimate e-book I'm not forced to start by reading an article on why piracy is bad followed by a bunch of adverts for other books before I can ever begin with chapter one. That makes the legitimate route far more appealing. Movie studios, take note.
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