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Old Aug 31, 2012, 10:17 PM   #26
grahamtriggs
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"Apple and four major publishers have offered to allow retailers such as Amazon to sell e-books at a discount for two years"

That's still nonsense. Other retailers should be free to set their pricing period, not for a limited time, however long.
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Old Sep 1, 2012, 03:25 AM   #27
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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 1, 2012, 03:44 AM   #28
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Originally Posted by GadgetDon View Post
The collusion was necessary. Amazon had a nasty habit of punishing individual publishers who wouldn't play ball in e-books by yanking their paperback and hardback books as well - and their market strength in physical books is so strong, that's a huge club. All the publishers saying "we are switching to the agency model" had strength.

For an analogy, if one person goes on strike for better working conditions, the person just gets fired. If everyone goes on strike, management has to deal. Oddly, that form of collusion is considered a good thing.
The major publishers are competitors. Last time I check, it is not okay for competitors to come together and fix price. They suppose to compete against each others to lower prices. (isn't that the whole point of competition?, company compete, consumers benefit through lower prices?)

As for your analogy, it's a major fail. Workers don't compete against each others to lower prices. If workers get together, that's collusion? I thought it is called forming a union.


How would you feel if all the grocery stores in your area get together and agree to fix prices for every single items? (their reason for colluding is that without the collusion, they would earn less money).

Is the collusion okay then?



-----------

As for Amazon and their growing strength and influence with the publishers. Isn't that how the free market work? The more influence a company has, the better it is at extracting better terms from a supplier.

It cost less for Barnes and Noble to buy books from the publishers compare to a neighborhood bookstore because Barnes and Noble has much more influence than a small store.

Last edited by EbookReader; Sep 1, 2012 at 03:53 AM.
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Old Sep 1, 2012, 03:46 AM   #29
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The result of this direction will be more self publisher eBooks.

Amazon is very hard on authors, and though you get great exposure, you also make so little on each copy sold you need to be in the top 500 to make anything at all.

Several of my author friends have not renewed with Amazon and will be selling direct to the consumer and thru the other eBook sellers rather than continue to be raped by Amazon.

My next book will also not be released thru Amazon, but will be managed thru a new cooperative distribution house.
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Old Sep 1, 2012, 04:01 AM   #30
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Originally Posted by thewitt View Post
The result of this direction will be more self publisher eBooks.

Amazon is very hard on authors, and though you get great exposure, you also make so little on each copy sold you need to be in the top 500 to make anything at all.

Several of my author friends have not renewed with Amazon and will be selling direct to the consumer and thru the other eBook sellers rather than continue to be raped by Amazon.

My next book will also not be released thru Amazon, but will be managed thru a new cooperative distribution house.
Amazon pays authors 70% (minus a small delivery fee of $0.15 per 1MB) of the sale price between $2.99 - $9.99

For example, assuming a $0.07 delivery fee for 450KB book.

You price the book at $2.99, you get $2.02
You price the book at $3.99, you get $2.72
You price the book at $4.99, you get $3.42

etc...

As for your author friends boycotting Amazon because 70% royalties is too small, I wish them luck.

I would wish luck on any musicians wanting to sell digital music but don't want to sell on Itunes. Itunes has about 70-80% marketshare in digital music.

p.s. what ebook sellers offer higher royalties than Amazon?

I wasn't aware of any. B&N Nook offer 65%. KOBO offers 70% but their marketshare is very tiny. Apple offers 70% royalties but Apple marketshare is tiny.

Selling directly is a good option since you could net 80-90% of the sale. BUT most ebook buyers don't go to an author website to buy ebook. They go to Amazon or B&N.

Would you rather sell 10 books at 80-90% profit margin or sell 100 books at 70% profit margin?

Last edited by EbookReader; Sep 1, 2012 at 04:14 AM.
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Old Sep 1, 2012, 05:04 AM   #31
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Dont let them Settle.

Make them Pay. Price fixing anti competition nazi company Apple has become.
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Old Sep 1, 2012, 09:35 AM   #32
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Quote:
Originally Posted by EbookReader View Post
Amazon pays authors 70% (minus a small delivery fee of $0.15 per 1MB) of the sale price between $2.99 - $9.99

For example, assuming a $0.07 delivery fee for 450KB book.

You price the book at $2.99, you get $2.02
You price the book at $3.99, you get $2.72
You price the book at $4.99, you get $3.42

etc...

As for your author friends boycotting Amazon because 70% royalties is too small, I wish them luck.
Which conveniently sidesteps the fact that if you want to sell your ebook for more than $9.99, Amazon only pays 35%. And they charge delivery fees with the 70% royalty rate. And they include that crazy MFN clause that so many people are upset with Apple about.

https://kdp.amazon.com/self-publishi...A29FL26OKE7R7B

Quote:
p.s. what ebook sellers offer higher royalties than Amazon?
Apple for one.

----------

Quote:
Originally Posted by EbookReader View Post
As for Amazon and their growing strength and influence with the publishers. Isn't that how the free market work? The more influence a company has, the better it is at extracting better terms from a supplier.
Up to a point. That's why we have antitrust laws. When a company with monopoly power in a market, such as Amazon, uses anti-competitive tactics, such as predatory pricing, to eliminate competition in a market, that's illegal.
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Old Sep 1, 2012, 02:35 PM   #33
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I've truly enjoyed the commentary here.

What the agency model has done is effectively put an end to the "race to the bottom". One of the issues with digital content is that its reproduction has a near zero cost, unlike the publishing, printing, and risk of generating a physical product.

Here are some things to additionally consider.

Amazon's position in the market is so absolutely massive that they could and were loss-leading their digital books to drive kindle sales and vendor lock-in. Amazon can take the loss w/o a problem, but it creates an extremely high barrier of entry for a competitor to enter the market. Prior to the agency model, there really were none ... particularly if you didn't feel like publishing your content without DRM of sorts.

The secondary effect has been pointed out ... consumers will de-value a product to the lowest price. It is much harder to get consumers to bite at a price jump than a price decrease. Consumers used to paying $5 for an e-book is going to make it much harder for your self-publishing author to demand $10 for their masterpiece.

As such, the agency model might not give consumers the lowest price ... but it's hardly a pain point. By preserving the value of a book, it may actually be far more beneficial to the self-publishing audience than one realizes. I think it is more hurtful for consumers to have Amazon be the sole outlet for a publisher's wares.

So if we're going to talk about who's hurting who ... let's consider how many bookstores have been closed around the country short of B&N. And let's face it, they're not far from the chopping block.

The comments about publishers as competitors is somewhat misleading. From what I understand, authors have deals with publishers not entirely unlike artists with labels. They may compete for the best authors, but they are not generally direct competitors.

As far as which company is more evil ... I find Apple has had more of the consumer's interests in mind without bending the publishers over backwards. They didn't seek to break the back of the music industry when they introduced the $10 digital album. In fact, we'd all be stuck in digital DRM hell had Apple not given labels flexible track pricing in exchange for going DRM free. The last time I checked, that has allowed for huge competition in the music space where everyone has been able to benefit, Amazon included.

And like it or not, the competition in the marketplace is what keeps innovation vibrant and ongoing. I love my iPad, but I buy my books from Amazon because iBooks has forced them to keep their reader from becoming a stale turd.

And just one piece of troll bait: if the agency model is so bad for setting a price floor, perhaps we should eliminate minimum wage too? (really ... don't bite at that)
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Old Sep 2, 2012, 04:55 AM   #34
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Originally Posted by BaldiMac View Post
Which conveniently sidesteps the fact that if you want to sell your ebook for more than $9.99, Amazon only pays 35%.
Does Itunes allow you to sell a song for more than $1.29?

Most indie writers who put up their book on sales on Amazon, they price their books a lot lower than $9.99.

$0.99, $2.99, $3.99 and $4.99 are the most common ones.

Quote:
And they charge delivery fees with the 70% royalty rate.
Probably due to 3G delivery for the Kindle.
Is $0.15 delivery fee for 1MB too much? (most book are in the 500KB range or lower).

Quote:
And they include that crazy MFN clause that so many people are upset with Apple about.

https://kdp.amazon.com/self-publishi...A29FL26OKE7R7B
How many ebook buyers are affected negatively by Apple MFN clause?

How many ebook buyers are affected negatively by the Amazon MFN clause?



Quote:
Apple for one.


Apple offers 70% royalties. The same as Amazon.

Apple use wi-fi only. Amazon use Wi-fi and 3G to deliver book.

----------



Quote:

Up to a point. That's why we have antitrust laws. When a company with monopoly power in a market, such as Amazon, uses anti-competitive tactics, such as predatory pricing, to eliminate competition in a market, that's illegal.
In order to be sued for predatory pricing, two things need to happen.

1) offer products below cost to drive out competition
2) THEN raise prices to recoup the "losses" from predatory pricing

If Amazon fall foul of antitrust laws, they would be sued by the DOJ.

p.s. Selling a few selected books below cost is predatory? I thought it's called loss-leader, with retailers do all the time.

Last edited by EbookReader; Sep 2, 2012 at 05:01 AM.
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Old Sep 2, 2012, 03:50 PM   #35
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Originally Posted by EbookReader View Post
Does Itunes allow you to sell a song for more than $1.29?
I thought we were talking about ebooks.

Quote:
Most indie writers who put up their book on sales on Amazon, they price their books a lot lower than $9.99.

$0.99, $2.99, $3.99 and $4.99 are the most common ones.
Good for them. What about someone who wants to make more than $7.00 per book?

Quote:
Probably due to 3G delivery for the Kindle.
Is $0.15 delivery fee for 1MB too much? (most book are in the 500KB range or lower).
It's more than Apple.

Indie author gets sticker shock from Amazon "delivery fees"
http://boingboing.net/2012/06/12/ind...cker-shoc.html

Quote:
How many ebook buyers are affected negatively by Apple MFN clause?

How many ebook buyers are affected negatively by the Amazon MFN clause?
I don't know. How many?

Quote:
Apple offers 70% royalties. The same as Amazon.
Again, only for books $9.99 or less. And if you want to ignore delivery fees. Hardly the same.

Quote:
In order to be sued for predatory pricing, two things need to happen.

1) offer products below cost to drive out competition
2) THEN raise prices to recoup the "losses" from predatory pricing
You just made that up.

Quote:
If Amazon fall foul of antitrust laws, they would be sued by the DOJ.
Good one.

Quote:
p.s. Selling a few selected books below cost is predatory? I thought it's called loss-leader, with retailers do all the time.
A few books? Talk about understatement. And the difference between loss leaders and predatory pricing is when a market leader with monopoly power uses the "loss leaders" to drive out competition.

Last edited by BaldiMac; Sep 2, 2012 at 04:02 PM.
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Old Sep 3, 2012, 04:21 AM   #36
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Originally Posted by BaldiMac View Post
I thought we were talking about ebooks.



Good for them. What about someone who wants to make more than $7.00 per book?



It's more than Apple.

Indie author gets sticker shock from Amazon "delivery fees"
http://boingboing.net/2012/06/12/ind...cker-shoc.html



I don't know. How many?



Again, only for books $9.99 or less. And if you want to ignore delivery fees. Hardly the same.



You just made that up.



Good one.



A few books? Talk about understatement. And the difference between loss leaders and predatory pricing is when a market leader with monopoly power uses the "loss leaders" to drive out competition.

We could argue all night back and forth.

Amazon is bad for discouraging indie authors from pricing their book higher than $9.99.

Amazon is also bad for charging delivery fee. Delivery fee should be FREE.

In fact, Amazon should raise the royalties to 80%. 70% is too low. If I'm running Amazon, I would get rid of delivery fee, raise the royalties to 80% for ebook priced from $0.99 to infinity.



Anyhow, this whole antitrust lawsuit came about because is price fixing is not good for ebook buyers.

Does having hundreds of thousands of books....all have the same price on Ibookstore, Kindle, Nook, Sony, Kobo, Googleplay good for buyers? What if these retailers want to do a discount, why can't they?

Let's say you want to buy the Avengers on Blu-ray. Would you be okay if the price of this movie is the same at every retailers (Wal-Mart, Target, Best Buy, K-Mart etc...) because these retailers can't offer discount anymore?

And it's not just the Avengers, it's all the movies from the Major Hollywood Studios. Is price fixing okay for these major movie studios?

Last edited by EbookReader; Sep 3, 2012 at 04:38 AM.
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Old Sep 4, 2012, 07:49 AM   #37
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Originally Posted by EbookReader View Post
We could argue all night back and forth.

Amazon is bad for discouraging indie authors from pricing their book higher than $9.99.

Amazon is also bad for charging delivery fee. Delivery fee should be FREE.

In fact, Amazon should raise the royalties to 80%. 70% is too low. If I'm running Amazon, I would get rid of delivery fee, raise the royalties to 80% for ebook priced from $0.99 to infinity.
And, yet, you chose to defend them with misinformation.

Quote:
Anyhow, this whole antitrust lawsuit came about because is price fixing is not good for ebook buyers.
Also, because horizontal price fixing is illegal.

Quote:
Does having hundreds of thousands of books....all have the same price on Ibookstore, Kindle, Nook, Sony, Kobo, Googleplay good for buyers? What if these retailers want to do a discount, why can't they?

Let's say you want to buy the Avengers on Blu-ray. Would you be okay if the price of this movie is the same at every retailers (Wal-Mart, Target, Best Buy, K-Mart etc...) because these retailers can't offer discount anymore?

And it's not just the Avengers, it's all the movies from the Major Hollywood Studios. Is price fixing okay for these major movie studios?
Again, agency pricing is legal. Selling your products on commission instead of wholesale is legal. It isn't price fixing. These are two separate issues. The price fixing charge came about because the publishers allegedly colluded to switch to the agency model and manipulate pricing of ebooks. Without the alleged collusion, what you describe is legal.
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Old Sep 4, 2012, 11:55 AM   #38
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Originally Posted by sockatume View Post
Yes, an important distinction.
Ok, we agree there. Unfortunately, you've completely missed the distinction (as seen below).

Quote:
Originally Posted by sockatume View Post
The key issue is that the "most favoured nation" clause sets a single price for every ebook seller, not just Apple.
No. The 'most favored nation' clause, in and of itself, *doesn't* set a price *AT ALL*. It says, 'If you sell it to someone else for less, I get to take advantage of that lower price as well'.

Quote:
Originally Posted by sockatume View Post
Your options are to sell it for the same price as Apple, or to sell it at a higher price. The latter is hardly an option at all. That's powerfully anticompetitive.
Again, no. The options are for the publisher to sell it to someone else for a higher price, the same price, or a lower price (which Apple gets to take advantage of as well).

Most favored nation clauses are *normal* in most industries. Even grocery chains often have them with various producers. To the best of my knowledge, they have *never* before been deemed anti-competitive. (Even when combined with an agency model, which is comparatively rare.)
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Old Sep 4, 2012, 12:09 PM   #39
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Originally Posted by EbookReader View Post
Amazon pays authors 70% (minus a small delivery fee of $0.15 per 1MB) of the sale price between $2.99 - $9.99

For example, assuming a $0.07 delivery fee for 450KB book.

You price the book at $2.99, you get $2.02
You price the book at $3.99, you get $2.72
You price the book at $4.99, you get $3.42

etc...
And at $10.00, your royalty rate from Amazon drops to 35%. (I don't think that drop is mirrored by any other of the major e-book sellers.)

You price the book at $9.99, you get $6.92
You price the book at $10.00, you get $3.43
You price the book at $15.00, you get $5.18
You price the book at $20.00, you get $6.93

If you've ever wondered why Amazon's e-book selection has a massive gap in price ranges from $10-$20, that should clear it up for you. The same book, priced at $9.99 and $19.99 makes the author the same amount per sale, while Amazon's share doubles. That, right there, is an example of Amazon wielding it's market power against authors who choose to self-publish, and using *them* to force a preferred price range on the publishers.

Quote:
Originally Posted by EbookReader View Post
p.s. what ebook sellers offer higher royalties than Amazon?

I wasn't aware of any. B&N Nook offer 65%. KOBO offers 70% but their marketshare is very tiny. Apple offers 70% royalties but Apple marketshare is tiny.
Technically, I think Apple gives a better rate. I may be mistaken, but I don't believe they have a separate 'delivery fee'.
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Last edited by tbrinkma; Sep 4, 2012 at 12:12 PM. Reason: Mis-remembered the $10+ royalty rate as 30%, rather than 35%
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Old Sep 6, 2012, 03:35 AM   #40
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Originally Posted by tbrinkma View Post
And at $10.00, your royalty rate from Amazon drops to 35%. (I don't think that drop is mirrored by any other of the major e-book sellers.)

You price the book at $9.99, you get $6.92
You price the book at $10.00, you get $3.43
You price the book at $15.00, you get $5.18
You price the book at $20.00, you get $6.93

If you've ever wondered why Amazon's e-book selection has a massive gap in price ranges from $10-$20, that should clear it up for you. The same book, priced at $9.99 and $19.99 makes the author the same amount per sale, while Amazon's share doubles. That, right there, is an example of Amazon wielding it's market power against authors who choose to self-publish, and using *them* to force a preferred price range on the publishers.
The same as Apple using its market power and prevent indie musicians from setting their song higher than $1.29.

Amazon wants book to be priced $9.99 or lower so it can sell more books.
Apple want songs to be priced at $1.29 or lower so it can sell more songs.

Maybe Amazon knows from its data that books priced at $9.99 or lower sell more than books priced at $12.99 or higher? Likely, Apple knows from its data that song priced at $1.29 will sell more than songs priced at $1.49.
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Old Sep 6, 2012, 03:54 AM   #41
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Examples of price fixing:

Zoo by James Patterson, Michael Ledwidge
Publisher: Hachette Book Group


The Last Man (Mitch Rapp) by Vince Flynn
Publisher: Simon and Schuster


ebook price from different competitors:

Amazon: $14.99
Barnes and Noble: $14.99
Google Play: $14.99
Sony: $14.99
Kobo: $14.99
Apple: $14.99

if Kobo want to discount this book to the benefit of customers, why can't they? This is just 2 of hundreds of thousands of examples of identical prices at competing stores.

What happened to "when stores compete, you win?"




How would you feel if The Dark Knight Rises Blu-ray follow the same price fixing.

The Dark Knight Rises Blu-Ray prices from different competitors:

Best Buy: $29.99
Wal-Mart: $29.99
Target: $29.99
Kroger: $29.99
KMart: $29.99
Barnes and Noble: $29.99
Amazon.com: $29.99
Fry's Electronics: $29.99

if Fry's Electronics want to do a discount, why can't they?

And not just the Dark Knight Rises but hundreds of thousands of other blu-ray titles from The Major Studios like Warner Brothers, Sony, Disney, 20th Century FOX, Universal, Lionsgate, Paramount?

When only 1 studio come up to Wal-Mart and say "we are switching to agency and you can no longer discount our movies, Wal Mart will say "screw you, we can survive without you." But when all the major studios come up at the same time to Wal Mart and say, "if you don't switch to agency, you won't have movies from all our studios." What is Wal-Mart to do? Not sell movies anymore? Wal-Mart probably surrenders. Price of DVD/Blu-Rays will rise. Customers will complain and the DOJ will investigate.


When stores compete, you win.
When stores fix price, you lose.

Last edited by EbookReader; Sep 6, 2012 at 04:12 AM.
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Old Sep 6, 2012, 09:05 AM   #42
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Quote:
Originally Posted by EbookReader View Post
Examples of price fixing:

Zoo by James Patterson, Michael Ledwidge
Publisher: Hachette Book Group


The Last Man (Mitch Rapp) by Vince Flynn
Publisher: Simon and Schuster


ebook price from different competitors:

Amazon: $14.99
Barnes and Noble: $14.99
Google Play: $14.99
Sony: $14.99
Kobo: $14.99
Apple: $14.99

if Kobo want to discount this book to the benefit of customers, why can't they? This is just 2 of hundreds of thousands of examples of identical prices at competing stores.

What happened to "when stores compete, you win?"




How would you feel if The Dark Knight Rises Blu-ray follow the same price fixing.

The Dark Knight Rises Blu-Ray prices from different competitors:

Best Buy: $29.99
Wal-Mart: $29.99
Target: $29.99
Kroger: $29.99
KMart: $29.99
Barnes and Noble: $29.99
Amazon.com: $29.99
Fry's Electronics: $29.99

if Fry's Electronics want to do a discount, why can't they?

And not just the Dark Knight Rises but hundreds of thousands of other blu-ray titles from The Major Studios like Warner Brothers, Sony, Disney, 20th Century FOX, Universal, Lionsgate, Paramount?
Again, these are examples of vertical price fixing which is completely legal. Horizontal price fixing is illegal. Horizontal price fixing is what this suit is about. It is ridiculous that you keep posting the same misinformation over and over again. A company controlling the price of their own product is not bad for consumers unless they are violating antitrust laws. If you don't like that the Dark Knight Rises cost $29.99 everywhere, then don't buy it!

"Good for consumers" isn't just about driving down the price. Free markets are about finding a balance between supply and demand. Finding a price point that maximizes profits by balancing margins with sales.

Quote:
When only 1 studio come up to Wal-Mart and say "we are switching to agency and you can no longer discount our movies, Wal Mart will say "screw you, we can survive without you." But when all the major studios come up at the same time to Wal Mart and say, "if you don't switch to agency, you won't have movies from all our studios." What is Wal-Mart to do? Not sell movies anymore? Wal-Mart probably surrenders. Price of DVD/Blu-Rays will rise. Customers will complain and the DOJ will investigate.
Exactly.

Last edited by BaldiMac; Sep 6, 2012 at 09:10 AM.
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Old Sep 7, 2012, 03:49 AM   #43
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Originally Posted by BaldiMac View Post
Again, these are examples of vertical price fixing which is completely legal. Horizontal price fixing is illegal. Horizontal price fixing is what this suit is about. It is ridiculous that you keep posting the same misinformation over and over again. A company controlling the price of their own product is not bad for consumers unless they are violating antitrust laws. If you don't like that the Dark Knight Rises cost $29.99 everywhere, then don't buy it!
How is it a "vertical price fixing" if Warner Brothers, Sony, Disney, 20th Century FOX, Universal, Lionsgate, Paramount got together and fix price?

Horizontal Price Fixing occurs when firms or individuals at the same level of the market structure (such as major publishers or movie studios) agree to fix or otherwise stabilize the prices they will charge for their products or services.

Before: Dark Knight Blu-Ray can be found by "price shopping" and get the best deal say $22.99 at Wal-Mart.

After: $29.99 everywhere because Wal-Mart is not allowed to discount.

How is that good for consumers?


Quote:
If you don't like that the Dark Knight Rises cost $29.99 everywhere, then don't buy it!
But I like the Dark Knight Rises and it's a must have. I rather pay $24.99 but since I like it so much, I will pay $29.99 to see it the day it is released. Why must I be punished so the movie studios and the retailers fatten their pockets?

Before, the consumers got choices, many choices because retailers offer discount. Now, the consumers got a fixed price everywhere.

Who benefit: The studios since they can keep prices high.
Who else benefit: The retailers since they got 30% cut (no need to discount / no need to compete)
Who got screwed: you, me, and everyone else


Quote:
"Good for consumers" isn't just about driving down the price. Free markets are about finding a balance between supply and demand. Finding a price point that maximizes profits by balancing margins with sales.
Free markets don't operate well when competitors get together and set the price. There is no "balance between supply and demand" when major publishers or major movie studios got together and fix the price.

Balance between supply and demand would be Publisher 1 goes to Amazon and say raise our price or else.
Amazon say: we can live without you, we have the other 5 major publishers to supply books to us. You would be hurt by not selling books to us. And before long, you will return to us because it would be a hit to your bottom line.

But if Publisher 1 + Publisher 2 + Publisher 3 + Publisher 4 + Publisher 5 all do this (conspired among themselves with signed agreements), the normal market forces don't work.





p.s. After the federal judge okay the settlement today, retail price competition is RESTORED.....but only for the 3 publishers who settled.

http://www.washingtonpost.com/busine...849_story.html
Judge approves Justice Department deal with 3 e-book publishers accused of fixing prices

Quote:
But U.S. District Judge Denise Cote in New York decided the settlement “appears reasonably calculated to restore retail price competition to the market.”

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Old Sep 7, 2012, 04:24 AM   #44
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http://news.cnet.com/8301-1023_3-575...th-publishers/

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The judge's decision is a setback for Apple, which must now watch as Amazon will be allowed once again to offer heavily discounted prices on best-selling books.

The government alleged in its complaint that the motive for the price fixing was fear that Amazon's pricing strategy would drive out competition and hand it control of the e-book market. In Walter Isaacson's authorized biography of Steve Jobs, the Apple co-founder says Apple and the accused publishers got together leading up to the release of the iPad in 2010 and agreed the best way forward was for the publishers to set retail prices, not book merchants. So, they went about forcing this new pricing model on retailers.

From then on, retailers would have to compete on title selection, shopping experience, and everything else other than price. By taking price out of the equation, Apple stood to make up ground on Amazon, which owned 90 percent of the e-book market at the time, according to the DOJ.

The problem is that in trying to take Amazon down, Apple and the publishers threw consumers under the bus. Amazon said after the complaint was filed it was looking forward to reducing prices again.

Apple and the publishers are scheduled to go to trial next June.
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Old Sep 7, 2012, 10:06 AM   #45
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Originally Posted by EbookReader View Post
How is it a "vertical price fixing" if Warner Brothers, Sony, Disney, 20th Century FOX, Universal, Lionsgate, Paramount got together and fix price?
Your examples were for one book and one movie at multiple retailers. That is vertical price fixing.

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Horizontal Price Fixing occurs when firms or individuals at the same level of the market structure (such as major publishers or movie studios) agree to fix or otherwise stabilize the prices they will charge for their products or services.
Yep.

Quote:
Before: Dark Knight Blu-Ray can be found by "price shopping" and get the best deal say $22.99 at Wal-Mart.

After: $29.99 everywhere because Wal-Mart is not allowed to discount.

How is that good for consumers?
And... we're back. Consumers are only part of the equation! The agency model is legal! Why do you keep restating the same argument even though you seem to understand that what you keep bringing up is not illegal on its own. The problem is not that the prices are the same everywhere. The problem is that the publishers allegedly colluded to implement this pricing.

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But I like the Dark Knight Rises and it's a must have. I rather pay $24.99 but since I like it so much, I will pay $29.99 to see it the day it is released. Why must I be punished so the movie studios and the retailers fatten their pockets?
I have no idea how you think this makes sense.

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Before, the consumers got choices, many choices because retailers offer discount. Now, the consumers got a fixed price everywhere.
Yep. Sucks. Not sure why you think that you have a legal right to retail pricing/wholesale model.

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Who benefit: The studios since they can keep prices high.
Who else benefit: The retailers since they got 30% cut (no need to discount / no need to compete)
Who got screwed: you, me, and everyone else
Yep. Except the part you miss is that in a free market, the market correction comes from a decrease in sales because of the increase in prices. That's how the system is supposed to work. A content creator has the rights to price their product however they want. Your right as a consumer is the right to choose whether or not you want to buy the product at the price they set.

Utilizing dominant market power to artificially drive down prices, as Amazon did, is bad for the free market. Predatory pricing to lower prices or collusion to raise prices are both bad for the ebook market in the long run.

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Free markets don't operate well when competitors get together and set the price. There is no "balance between supply and demand" when major publishers or major movie studios got together and fix the price.

Balance between supply and demand would be Publisher 1 goes to Amazon and say raise our price or else.
Amazon say: we can live without you, we have the other 5 major publishers to supply books to us. You would be hurt by not selling books to us. And before long, you will return to us because it would be a hit to your bottom line.

But if Publisher 1 + Publisher 2 + Publisher 3 + Publisher 4 + Publisher 5 all do this (conspired among themselves with signed agreements), the normal market forces don't work.
Exactly.
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Old Sep 8, 2012, 04:35 AM   #46
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Originally Posted by BaldiMac View Post
Your examples were for one book and one movie at multiple retailers. That is vertical price fixing.



Yep.



And... we're back. Consumers are only part of the equation! The agency model is legal! Why do you keep restating the same argument even though you seem to understand that what you keep bringing up is not illegal on its own. The problem is not that the prices are the same everywhere. The problem is that the publishers allegedly colluded to implement this pricing.



I have no idea how you think this makes sense.



Yep. Sucks. Not sure why you think that you have a legal right to retail pricing/wholesale model.



Yep. Except the part you miss is that in a free market, the market correction comes from a decrease in sales because of the increase in prices. That's how the system is supposed to work. A content creator has the rights to price their product however they want. Your right as a consumer is the right to choose whether or not you want to buy the product at the price they set.

Utilizing dominant market power to artificially drive down prices, as Amazon did, is bad for the free market. Predatory pricing to lower prices or collusion to raise prices are both bad for the ebook market in the long run.



Exactly.
I wasn't talking about just 1 movies, but all the movies from the major movie studios. I wrote this:

And not just the Dark Knight Rises but hundreds of thousands of other blu-ray titles from The Major Studios like Warner Brothers, Sony, Disney, 20th Century FOX, Universal, Lionsgate, Paramount?


In the publishing world, that is exactly what happened. 5 out of the 6 Big Publishers colluded and fixed prices.

Now imagine the same thing if 5 out of the 6 major studios (Warner Brothers, Sony, Disney, 20th Century Fox, Universal) did the same thing?

still good for consumers when these major studios get together and fix prices for DVDs and Blu-ray and forbid retailers from discounting?


Before: retail price competition between e-sellers
After: price competition is eliminated




http://www.techdirt.com/articles/201...e-fixing.shtml

As for the last issue (breaking up Amazon's dominance), she notes that it was "perhaps the most forceful species of criticism" but still does not find it persuasive here.

The court more or less notes that Amazon's market position isn't on trial, and its use of wholesale pricing does not equal price fixing, as some have alleged. Nor does it show "predatory" pricing, which was a key complaint.

The problem there: the evidence showed that Amazon was "consistently profitable." And, to show predatory pricing, "one must prove more than simply pricing below an appropriate measure of cost" but also that the company will jack up prices down the road. And all of the comments failed to do that:

Quote:
None of the comments demonstrate that either condition for predatory pricing by Amazon existed or will likely exist. Indeed, while the comments complain that Amazon’s $9.99 price for newly-released and bestselling e-books was “predatory,” none of them attempts to show that Amazon’s e-book prices as a whole were below its marginal costs.
Oh, and finally, the court points out that swinging back the blame to Amazon is meaningless for the purpose of this case, anyway, because even if the court accepted that Amazon was price fixing too, that doesn't make it okay for the publishers to price fix themselves. Think of it as the "two wrongs don't make a right" rule.

Quote:
Third, even if Amazon was engaged in predatory pricing, this is no excuse for unlawful price-fixing. Congress “has not permitted the age-old cry of ruinous competition and competitive evils to be a defense to price-fixing conspiracies.” ... The familiar mantra regarding “two wrongs” would seem to offer guidance in these circumstances.

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Old Sep 8, 2012, 10:24 AM   #47
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Originally Posted by EbookReader View Post
I wasn't talking about just 1 movies, but all the movies from the major movie studios. I wrote this:

And not just the Dark Knight Rises but hundreds of thousands of other blu-ray titles from The Major Studios like Warner Brothers, Sony, Disney, 20th Century FOX, Universal, Lionsgate, Paramount?
Sure, but the examples that you used were meaningless in this respect. They didn't demonstrate collusion. They simply demonstrated agency pricing.

Quote:
In the publishing world, that is exactly what happened. 5 out of the 6 Big Publishers colluded and fixed prices.

Now imagine the same thing if 5 out of the 6 major studios (Warner Brothers, Sony, Disney, 20th Century Fox, Universal) did the same thing?

still good for consumers when these major studios get together and fix prices for DVDs and Blu-ray and forbid retailers from discounting?

http://www.techdirt.com/articles/201...e-fixing.shtml

As for the last issue (breaking up Amazon's dominance), she notes that it was "perhaps the most forceful species of criticism" but still does not find it persuasive here.

The court more or less notes that Amazon's market position isn't on trial, and its use of wholesale pricing does not equal price fixing, as some have alleged. Nor does it show "predatory" pricing, which was a key complaint.

The problem there: the evidence showed that Amazon was "consistently profitable." And, to show predatory pricing, "one must prove more than simply pricing below an appropriate measure of cost" but also that the company will jack up prices down the road. And all of the comments failed to do that:

Oh, and finally, the court points out that swinging back the blame to Amazon is meaningless for the purpose of this case, anyway, because even if the court accepted that Amazon was price fixing too, that doesn't make it okay for the publishers to price fix themselves. Think of it as the "two wrongs don't make a right" rule.
Fantastic. These are the real issues.

If you could just focus on them, instead of fixating on agency pricing!
You know, this part:
Quote:
Before: retail price competition between e-sellers
After: price competition is eliminated
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Old Sep 10, 2012, 09:27 AM   #48
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Interesting.

In an interesting tactical shift, 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.

http://finance.yahoo.com/news/lawyer...141536241.html
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Old Sep 10, 2012, 09:45 AM   #49
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Originally Posted by samcraig View Post
Interesting.

In an interesting tactical shift, 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.

http://finance.yahoo.com/news/lawyer...141536241.html
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, 09:51 AM   #50
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Originally Posted by BaldiMac View Post
Just to be clear, Kohn's brief is submitted as a friend of the court. He is not representing the publishers.
and again, 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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