This has led a coalition of independent bookstores to sue Amazon and the Big Six publishers:
"It’s been a while since booksellers sued publishers but that’s what’s just happened as three independent bookstores have filed an antitrust class action lawsuit against the big six houses and Amazon charging that by signing agreements that call for the use of DRM on e-books sold through the Kindle, the online retailer and the publishers have combined to restrict the sale of e-books. The complaint, filed in the U.S. District Court for the Southern District of New York, contends that while Amazon and Random House, Penguin, HarperCollins, Simon & Schuster, Hachette Book Group, and Macmillan signed contracts with Amazon for the sale of e-books with DRM that was “specifically designed to limit the use of digital content” to various Kindle devices, the publishers have not entered into any agreements with independent bricks-and-mortar or independent collectives to sell e-books. “Consequently,” the complaint states, “the vast majority of readers who wish to read an e-book published by the Big Six will purchase the e-book from Amazon.”The superficial issue here is DRM; but the real issue is the survival of independent booksellers in a marketplace that has been conspiring against them for twenty years. Independent bookstores have been in trouble since pre-Internet times. One visit to a Borders in 1992 made me an addict of the book "super-store." But the Internet has made things much, much worse for independent bookstores. Since the late 1990s, Amazon's economies-of-scale have allowed it to offer customers a level of selection, pricing, and availability that is difficult for any smaller player to approach.
And then the Kindle and widespread popularity of e-readers made things even worse for independent booksellers. Ebook transactions were born on the Internet, and they'll likely remain there. Once again, Amazon's economies-of-scale give it a unique advantage.
I like the idea of independent booksellers--just like I like the idea of real estate agents, small headhunting agencies, and local newspapers that prosper by selling classified ad space. But I also know that these business models have been severely undercut by for-sale-by-owner real estate sites, Monster.com, and Craigslist. The genie of disintermediation is out of the bottle, and it isn't going to go back in.
The Internet has created a lot of opportunities for inventors, content creators, and others who possess or generate something to sell. It has mostly undermined those who function as intermediaries.
Most of the intermediaries who thrive today do so by focusing on niche markets. In the case of booksellers, one example I can think of is the local secondhand book market. Within five miles of my front door, there are no fewer than four independent secondhand bookstores. The low margins and emphasis on "browsing" in this market are better suited to a brick-and-mortar setting--even in the Internet age.
But suppose you want to buy the latest John Grisham or Stephen King novel? The reader will almost certainly get the best deal at Amazon.com--if not at Walmart. It is difficult for an independent bookseller to add much to this sort of transaction.
I suspect that this will continue to be the case with ebooks. The relevant question is not: Can independent booksellers successfully sue Amazon and the Big Six publishers? The question is: Can independent booksellers bring something to the ebook buying experience that is currently not provided by Amazon?