Potter's plunging price

Amazon.com has cut the price of "Harry Potter and the Deathly Hallows," the final installment of the J.K. Rowling fantasy series, to $17.99 -- a 49 percent discount off the $34.99 list price. The online bookseller has already taken 1 million orders for the book, to be released July 21. The total includes 620,000 orders from U.S. customers and 250,000 in the U.K. The new cut lowers Amazon's price a dollar below Barnes & Noble.com, a differential which we doubt will last long. Borders.com's price is $20.99.

The size of these discounts will make no small independent booksellers happy. They have the kids' parties on the Friday night before the midnight release, with snowy owls, food, games, characters in costume. But they can't give a 50 percent discount, without taking a loss. Why, they quite reasonably ask, should they have to take a loss on their most beloved and their biggest-selling book? For them, customer loyalty will bring in a lot of kids and parents, even at a higher price, but for most people, it's hard to resist half-off at Amazon or Wal-Mart.

There's already a huge bookseller price war going on in England on the book, with Waterstone's slugging it out with W.H. Smith and Borders. Smith is selling for £10.99 and Waterstones for £8.99 [$17.84 U.S. today]. According to this story in the Times of London, retailers don't expect to make much money, since supermarkets are selling at even steeper discounts, using the book as a loss leader to get people to come in to buy groceries. Simon Fox, CEO of HMV, which owns Waterstone's, told the Times: "It is important that we have big market share and have people into our shops but at half price it is hard to make money."