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Old May 7, 2012, 09:43 AM   #251
samcraig
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Quote:
Originally Posted by BaldiMac View Post
Prior to these negotiations, Apple was not in the ebook market.
Do I have my timeline a little mixed up? It's possible. I thought (memory eludes me at the moment) that iBooks launched and then these talks took place later. I'm probably wrong.

I do remember that when iBookstore launched - they had very little buy in from major publishers. So perhaps I'm remembering things differently - that the colluding took place to get those other publishers on board, etc.
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Old May 7, 2012, 10:02 AM   #252
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No matter how you cut it there was collusion going on. Apple might not be charged with it but there is no getting around the fact that the publishers did get together and force this change. Apple biggest weakness is the most favorable nation clause in their contract and worse case is Apple will get a slap on the wrist and told to remove it.
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Old May 7, 2012, 10:08 AM   #253
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Quote:
Originally Posted by samcraig View Post
Do I have my timeline a little mixed up? It's possible. I thought (memory eludes me at the moment) that iBooks launched and then these talks took place later. I'm probably wrong.

I do remember that when iBookstore launched - they had very little buy in from major publishers. So perhaps I'm remembering things differently - that the colluding took place to get those other publishers on board, etc.
iBooks (with support of Penguin, Macmillion, Simon & Shuster, HarperCollins, and Hatchette) was announced the same day as original iPad.

http://www.engadget.com/2010/01/27/l...reation-event/

The alleged collusion took place in negotiations for the original release.
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Old May 16, 2012, 07:20 AM   #254
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Before: price competition between booksellers like Kindle, Nook, Sony, Kobo etc..
After: no price competition between booksellers


With no price competition, the prices that consumers pay will rise. This whole DOJ lawsuit is about price competition (before) and the lack thereof (after). Best way to get rid of price competition? "The prices will be the same." which Steve Jobs admit to it back in January 2010 in this video



Walt Mossberg: "Why should she buy a book for $14.99 on your device when she can buy one for $9.99 from Amazon or Barnes & Noble?"

Steve Jobs: "That won't be the case."

Walt Mossberg: "You won't be $14.99 or they won't be $9.99?"

Steve Jobs: "The prices will be the same."

Steve Jobs: "Publishers are actually withholding their books from Amazon because they're not happy."













It doesn't look good for the publishers either:

http://www.teleread.com/chris-meadow...e-fixing-suit/

There’s some fascinating stuff here. For example, from pages 30-31 of the ruling, the judge explains why collusion is so probable. It’s a classic “prisoner’s dilemma” scenario: if each individual publisher hadn’t known it could count on most of its competitors to move to agency pricing as well, it would have made little sense for it to do so alone:

The costs of such a unilateral switch to the agency model would be substantial. The publisher would be selling its eBooks at a higher price than its competitors and would therefore be losing market share. This loss in market share would in all likelihood have been large. Random House gained significant market share from the Publisher Defendants during the months between their adoption of the agency model and Random House’s capitulation. The eBook sales by Random House increased 250 percent in 2010 as it continued to sell them at $9.99. At the same time that an individual publisher would be losing market share, it would be taking in less revenue per sale because of Apple’s 30 percent commission. In addition, the publisher would probably lack the leverage to force Amazon to accept the agency model. Potentially, then, this publisher would be barred from selling its eBooks to Amazon.



Would it make sense for 1 of the 6 Big Publishers to go at it alone? (switch to agency and see its market share tank)
If not, it would need the backing of the other publishers who would do the same.

Last edited by EbookReader; May 16, 2012 at 07:26 AM.
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Old May 16, 2012, 08:18 AM   #255
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Quote:
Originally Posted by EbookReader View Post
Before: price competition between booksellers like Kindle, Nook, Sony, Kobo etc..
After: no price competition between booksellers
Hey, loook. You are saying the same thing again without addressing the counter-arguments. There is no law saying you must sell through a retailer. There is no law saying that price competition must be between retailers. Publishers are the ones competing on price (as you describe towards the end of your post) with the agency model. Not retailers.

Quote:
With no price competition, the prices that consumers pay will rise. This whole DOJ lawsuit is about price competition (before) and the lack thereof (after).
No. The lawsuit is about collusion between the publishers.

Quote:
Best way to get rid of price competition? "The prices will be the same." which Steve Jobs admit to it back in January 2010 in this video

YouTube: video

Walt Mossberg: "Why should she buy a book for $14.99 on your device when she can buy one for $9.99 from Amazon or Barnes & Noble?"

Steve Jobs: "That won't be the case."

Walt Mossberg: "You won't be $14.99 or they won't be $9.99?"

Steve Jobs: "The prices will be the same."

Steve Jobs: "Publishers are actually withholding their books from Amazon because they're not happy."
The prices will be the same across retailers for a specific book because of the agency model. Something the DOJ does not have a problem with. Look at the settlements we have seen so far. They only outlaw the agency model for two years in order to counteract the affects of the alleged collusion.

Quote:
It doesn't look good for the publishers either:

http://www.teleread.com/chris-meadow...e-fixing-suit/

There’s some fascinating stuff here. For example, from pages 30-31 of the ruling, the judge explains why collusion is so probable. It’s a classic “prisoner’s dilemma” scenario: if each individual publisher hadn’t known it could count on most of its competitors to move to agency pricing as well, it would have made little sense for it to do so alone:

The costs of such a unilateral switch to the agency model would be substantial. The publisher would be selling its eBooks at a higher price than its competitors and would therefore be losing market share. This loss in market share would in all likelihood have been large. Random House gained significant market share from the Publisher Defendants during the months between their adoption of the agency model and Random House’s capitulation. The eBook sales by Random House increased 250 percent in 2010 as it continued to sell them at $9.99. At the same time that an individual publisher would be losing market share, it would be taking in less revenue per sale because of Apple’s 30 percent commission. In addition, the publisher would probably lack the leverage to force Amazon to accept the agency model. Potentially, then, this publisher would be barred from selling its eBooks to Amazon.

Would it make sense for 1 of the 6 Big Publishers to go at it alone? (switch to agency and see its market share tank)
If not, it would need the backing of the other publishers who would do the same.
There is the actual problem!
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Old May 18, 2012, 05:19 AM   #256
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LOTS OF EMAILS back and forth between the publishers and Apple

excerpt:

http://dearauthor.com/features/indus...mes-important/

Quote:
John Sargent asked Eddy Cue from Apple to take a reduced cut on hardcover first releases because under the new Agency model, revenue would decrease from $14 per book to $9.00. (This is important because Judge Cote uses this as an example of how anti competitive the actions were – that they would intentionally take a much lower figure in order to slow ebook adoption and raise prices).

An executive to another executive in a parent corp. shared via email that Eddy Cue had indicated that Random House was out “and that ne [sic] need the five majors in but maybe four.”

On Saturday, January 22, Penguin CEO David Shanks contacted Apple’s negotiator Eddie Cue. As Mr. Cue reported to Steve Jobs, Shanks ‘wanted an assurance that he is 1 of 4 before signing.”

more excerpt:

MOTIVES:

Quote:
“The higher retail prices benefitted Apple because it would earn higher revenues from its commissions on each sale. Insulated from e-book price competition with other Outlets, Apple could earn gross margins up to several times higher than in the Wholesale-Retail Model. The Publishers achieved their long-running collective goal: higher retail prices for e-books.”
Apple: higher profits
Publishers: higher retail prices for e-books to protect their $28-30 hardcover books




p.s. Another publisher has settled with the states to avoid the class action lawsuit. The first two settled and agreed to pay $52 million in restitution.

Last edited by EbookReader; May 18, 2012 at 05:24 AM.
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Old May 23, 2012, 10:47 PM   #257
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http://news.cnet.com/8301-1023_3-574...-e-book-suits/
Why Apple needs to settle its e-book suits
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Old Aug 30, 2012, 10:35 PM   #258
EbookReader
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on why horizontal price maintenance is illegal

http://legalminimum.blogspot.com/201...lain-some.html

1. So what's the illegal activity in this situation? The technical term is something called horizontal price maintenance. There's two types of price maintenance: horizontal and vertical. Vertical is the one we're more familiar with: the manufacturer sets the price and everyone else agrees to pay it. Horizontal is less common because it requires a conspiracy among competitors: it occurs when everyone at a certain level in the market (e.g. the publishers) agrees on the cost for a certain good (e.g. e-books).

It's illegal because it harms consumers. Everyone in the chain of commerce before the consumer actually benefits from this. The DOJ has explained it in the Apple context so let's use that: publishers get higher prices therefore higher profits, and Apple gets a percentage of those prices therefore higher revenues as well as gets to make sure its competitors can't undercut it. (And don't forget authors: higher prices means higher royalties for them too.) The only people who lose out are consumers. That's why it's illegal: because if it wasn't then everyone would do it.
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Old Sep 10, 2012, 09:29 AM   #259
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I would say that this is an interesting development...

http://finance.yahoo.com/news/lawyer...141536241.html

Kohn appears to acknowledge that the publishers did in fact collude to fix prices but that the price-fixing was not illegal. Until recently, publishers have denied that they conspired.
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Old Sep 10, 2012, 09:47 AM   #260
BaldiMac
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Quote:
Originally Posted by samcraig View Post
I would say that this is an interesting development...

http://finance.yahoo.com/news/lawyer...141536241.html

Kohn appears to acknowledge that the publishers did in fact collude to fix prices but that the price-fixing was not illegal. Until recently, publishers have denied that they conspired.
Just to be clear, Kohn's brief is submitted as a friend of the court. He is not representing the publishers.
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Old Sep 10, 2012, 09:50 AM   #261
samcraig
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Just to be clear, Kohn's brief is submitted as a friend of the court. He is not representing the publishers.
I think that's quite clear from the article and from the document. What's your point in calling attention to it if it's already obvious?
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Old Sep 10, 2012, 10:10 AM   #262
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Originally Posted by samcraig View Post
I think that's quite clear from the article and from the document. What's your point in calling attention to it if it's already obvious?
Are you kidding? Your choice quote was unclear. The fact that he was not representing the publishers was not mentioned in the article. And I'm not sure that everyone in the forum knows what "amicus curiae" means.

Quote:
Kohn appears to acknowledge that the publishers did in fact collude...
How can he acknowledge something that he has no knowledge of?

Quote:
Until recently, publishers have denied that they conspired.
Until recently? When did they change their story?




I do suggest everyone read his brief if you are interested in this story. It's in the form of a comic!

http://www.abajournal.com/files/AppleAmicusBrief.pdf
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Old Sep 10, 2012, 10:16 AM   #263
samcraig
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Originally Posted by BaldiMac View Post
Are you kidding? Your choice quote was unclear. The fact that he was not representing the publishers was not mentioned in the article. And I'm not sure that everyone in the forum knows what "amicus curiae" means.



How can he acknowledge something that he has no knowledge of?



Until recently? When did they change their story?




I do suggest everyone read his brief if you are interested in this story. It's in the form of a comic!

http://www.abajournal.com/files/AppleAmicusBrief.pdf
Yes. Cute. But that's not the court document filed? You might confuse readers on here

Here's the stay: http://www.scribd.com/doc/105482877/...quest-for-Stay
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Old Sep 10, 2012, 12:40 PM   #264
BaldiMac
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Yes. Cute. But that's not the court document filed? You might confuse readers on here

Here's the stay: http://www.scribd.com/doc/105482877/...quest-for-Stay
Yes, it actually was a court document that he filed.
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