I could not stop laughing. I knew this would happen. Why do people constantly put it on a tee and hand you a bat?
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Apple Claims 20% of U.S. E-Book Market, Double Previous Estimates
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I could not stop laughing. I knew this would happen. Why do people constantly put it on a tee and hand you a bat?
You make that sound like a good thing, yet you can't comprehend the benefits for ebooks.
HobeSoundDarryl
macrumors G5
I appreciate much of what you said in the full post but play out the above. Why don't we justify Apple- say- tripling music prices so that the music industry can take more risk on new musicians than they do now?. Why not double the price of -say- gasoline so Big Oil can take more risks on finding more oil? Why not- say- double the prices of medicines so that big pharma can take more risks on various drugs? Why not double the prices of all things so that all companies can make more money to take more risks to create more benefits for all people?
The error in the assumption is the implication that the added gains would actually be spent on doing what you say (bettering our fellow man). If I'm the publisher do I take more risks on more marginal books or authors or do I just pocket the surplus as added profits? If I'm big oil, do I actually want to spend the surplus money on even more exploration or pay out bigger bonuses on the added profits? If I big pharma, the same?
Sure, it's possible that it could work like you see but where is that proven in real life? For example, after the music industry got the price hike to $1.29, did that bring a lot of new, marginal artists to market? Now that gas is priced at $3-4/gallon are we seeing benefits of huge new discoveries or all that surplus being spent on alternative energies, etc. (or just reported as much bigger, "record" profits and paying out huge bonuses for "great years")?
Per the logic in this particular concept, we should pay a lot more for everything so that the companies that sell us everything could put that added surplus profit to use to better our lives or similar. The question is, would they? Or would it better their lives? This particular Ebook issue was established a good while ago. Did it result in a lot of fringe or borderline books coming to market or did it just pad the profits of the publishers & Apple? Probably no way to conclusively know one way or the other but if I was placing a bet, I'd bet big on corporate greed over corporate good in that kind of scenario.
You don't have medicine's that can save or prolong people's lives priced out of reach of many people who need them because the medicines are ridiculously expensive to make. It's purely a profit play based in exclusively owning the formula. As soon as the patent ends, what used to be a very expensive medicine suddenly drops like a rock in price but is still sold at an apparent profit. If a corporation can choose between greed/bonuses/wealth and betterment of fellow man, while they'll spin any action they take as the latter, we consistently see the former dominates the decision-making. We even have a system in place that provides the ultimate defense: it is the legal obligation of the company to maximize ROI for their shareholders. That's not easy to do when a company is being overly generous with it's cash.
Where did I make it sound like a good thing? It's just a statement. And how can you determine what I do and don't comprehend when it comes to ebooks?
No, not because it's Amazon, it's because people making these statements are mistaken. It's clear Amazon wants to price books as low as possible - sometimes below their costs. Like other large retailers such as Walmart, they can afford to have loss leaders to bring in customers and upsell them to other products and services.
Still, what Amazon does has nothing to do with Apple's model of taking a straight 30% cut. No matter what the publisher prices their books at, they still get 70% of the sales price.
I'm not saying Apple's model is consumer friendly. There is no dispute Amazon's model results in cheaper cost of some ebooks. I just don't think what Apple did amounts to price fixing.
HobeSoundDarryl
macrumors G5
After a 10 second search: $120 http://www.androidorigin.com/verizon-samsung-galaxy-s4-available-at-amazon-for-cheap-pricesdeal/ I bet if I tried for more than 10 seconds I could find even better. Here's $99: http://explore.t-mobile.com/samsung...wzygtCjC-czywEwllCjCVzbpjmwzygtCjCVzbpjmwzygt . I suspect free can be found with a little more looking.
And even still, I don't know if it's fair to compare a phone just released vs. one that is soon going to be a year old. Galaxy S3 $9 http://gadgetinsiders.com/verizon-samsung-galaxy-s3-sells-for-just-9-99-on-contract/12010477/ (again 10 second search, I bet I can find it for free with just a little effort).
And there's more to screens than just phones. And there's more markets than just the U.S.
Thanks for the suggestion. I can't help but notice that you chose not to answer the question I asked in my post but instead chose to insinuate that you know how I feel about this subject and who and what I believe in. I still do not see what Company "A", or Company "B" did here as being illegal. Starting a business by offering a loss leader product isn't illegal. Offering a competing business model to that business plan isn't illegal. If the DoJ wants to bust Apple's balls for the "most favored nation clause" go ahead. But at best that offense warrants a fine, and not this grandstanding dog and pony show under the guise about government caring about the consumer.
Collusions doesn't have to only be about price fixing. And what you and I think about what Apple did or did not do is irrelevant. Unfortunately
HobeSoundDarryl
macrumors G5
My apologies for any insinuation. But I stand by the suggestion of taking a completely objective review of the "meat" of the case as if it was someone other than Apple and see if you still can't see a legal fault with what occurred. Bare minimums: Ebook market before Apple made this move: around $9.99/book. Ebook market after Apple made this movie: around $13/book. How did such a big price hike get accomplished: pitching a business model change to the big 5 or so publishers so that they could make more money by "throwing in with Apple". Where the difference came from? Consumers paying a lot more than before for the very same products.
For starters give this a read: http://consumerist.com/2013/05/15/d...ow-that-apple-engaged-in-e-book-price-fixing/ but mentally replace Apple names and personnel with- say Microsoft names & personnel. There's much more out there that can show you the nitty gritty if you look. For example, try this one too: http://www.nytimes.com/2013/05/15/t...book-price-fixing.html?smid=tw-nytmedia&_r=1& noting how (let's say) Microsoft (instead of our favorite company) leveraged it's app store muscle to pressure some publishers to switch to the new model, how Samsung (instead of our favorite company) encouraged the publishers to withhold books from Amazon unless they went with the new model (of higher prices). Note that "most favored nation" requirement which establishes a hard price floor everywhere such that only Microsung or Samsoft would always have the lowest (but higher than they used to be) price. Note who played the key role of working between the companies to get them all on board. And note how all of the companies quickly settled when the Gov made it's move such that only Samsoft is left trying to defend itself. Settlement is sometimes about conserving expenses but often about knowing one can't win if they go to trial. And objectively think about the relatively harsh terms of those settlements (those industry players can't even hardly talk to each other now without first running it by the Gov). Etc.
We're a capitalistic country where pricing is supposed to be established by natural competitive pressures. If one player wants to sell something like Ebooks for $9.99 and even take losses, they are supposed to be free to do that. However, if another player can't make their margins by selling at $9.98 and instead changes the game so that the former has little choice but to raise their prices, it's wrong.
We consumer's lose when such stuff is allowed to be done. We lose every time it's done. And the only entity that has the muscle to fight the largest players like these for this kind of case typically is the Gov. And sometimes, the Gov actually takes up this kind of fight for "we the people" instead of "we the corporations". Ideally, it's doing the job of serving the people but I suspect book publishers and Apple are not very big campaign contributors. Either way (at least as I personally see it), there's merit for the case and it appears- based on what I know- that Apple and the publishers should get at least a little slap for this.
Just my opinion but it is as I see it based on how much I know about this particular thing. And I'll grant that there may be other details I don't know that paint a very different picture but I'm a bit pessimistic on the choices made since the result enriched Apple (I mean Samsoft/Microsung) & the book publishers by taking (much more) from the consumers. To me, that's broken capitalism via manipulation on the strength of big, powerful companies.
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I buy eBooks from both Amazon and iBookstore. It's a little easier to buy from Amazon, but I do check for prices as well. Amazon has an advantage in downloading direct to my iPad and not involving iTunes.
For example the new "Battle of Bunker Hill" is 12.99 on Amazon and 14.99 on iTunes.
I think the government is upset that Apple hasn't been bribing them enough.
For example the new "Battle of Bunker Hill" is 12.99 on Amazon and 14.99 on iTunes.
I think the government is upset that Apple hasn't been bribing them enough.
You're free to disagree, just remember that they have to prove collusion (particularly Apple's involvement), not that prices went up after Apple joined the market.
They don't have to prove prices went up. The did. That's obvious. But yes - they have to prove collusion. I never suggested otherwise. Just like I never suggested Apple was guilty. I just said the evidence is damning.
Can't you assume that, a few years ago when these events were taking place, that Amazon already had a monopoly on ebooks, or at least a near-monopoly? Even now, they have a probable dominant position in the marketplace (though it's difficult to say definitively).
In the short term, there's no question that Apple's efforts were harmful to the consumer - from a pricing perspective. Yet more choice did become available in the market, which can be a good thing for consumers. And with tablets sold in the many, many millions, far more people are likely exposed to ebooks on book-sized portable screens than when the Kindle and other purpose-built e-readers were the only game in town.
No - you can't assume. The fact is - they never have had a monopoly. And one (not saying you) can't assume if they ever achieved one (which would be pretty impossible) that they would change pricing.
ETA: Actually I am wrong. You (and anyone else) can assume anything they want. I choose not to assume.
I have the Kindle app on my iPad, but I tend to prefer iBooks (unless the Kindle version is cheaper). My reason is that I like to listen to the books when I am driving, and I can't do that with the Kindle app.
It was one of my favorite features of the Kindle.
The iBooks app lets me select text, then gives me the option for the iPad to "Speak" it, using Siri's voice. I hope this is still possible with the iOS 7 version, and the new Siri voices.
On the Kindle app, I can select text to highlight it, or forward it to Twitter, but speech is not an option.
HobeSoundDarryl
macrumors G5
As shared before, had the key thing occurred that makes a monopoly bad- that is Amazon substantially raised prices to take advantage of it's "monopoly"- Apple could have rolled out much cheaper (than the new Amazon higher prices) and probably got everything Apple was trying to get out of what it did. More simply, if pre-model had Amazon prices at $9.99 to win the monopoly, but then monopoly Amazon flexed and made prices $20 (a double), Apple could have immediately stepped in as a new competitor at $14 and got it's margin. No (legal) problem.
However, trying to pretend that Amazon's move to dominate would eventually harm the market because it could actually get a monopoly on Ebooks seems like a big leap. I don't think Amazon could achieve a monopoly. As soon as they doubled prices, other Ebook retailers would pop up (Apple included). Why not? It would be spun as not paying "greedy Amazons" new, much higher prices.
Instead, Amazon was doing a Walmart- heavily pressuring prices down. If you want to compete with them, it meant pricing similarly. Apple didn't like that because Apple margins were not available down at those prices. So the "greed" play resulted in prices getting pushed up pretty substantially with some other shenanigans to pressure Amazon to raise prices too (or risk having titles withheld by the publishers... at Apple's recommendation).
In the Amazon scenario (pre monopoly conspiracy), consumers buying Ebooks get them for about $10. In Apple scenario, nobody can get them anywhere for less than Apple sells them at about $13. In Amazon monopoly scenario, nothing stops Apple and others from immediately stepping in at- say $13 and undercutting Amazon's new, much higher prices. In 2 of these scenarios, consumers get lower prices than the big "greedy" dog trying to flex. In one of these scenarios, consumers gets the lowest prices. In one other scenario, all sellers make more money and the publishers make more money at the consumer's expense. Brand biases aside, which seems most desirable to us consumers? Fair?
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apple has done it again, their ecosystem is really strong and integrated because of which they have achieved success yet again. way to go apple!
Are you sure? Who admits guilt in settlements these days?
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Publishers were free to price them at far less than $13 everywhere. It is not illegal for publishers to sell to retailers on contracts forbidding sales at below MSRP levels.
In the meantime, a large number of books (~25% of titles or something like that) are sold exclusively through Amazon, no other retailer can sell them at any price. Which is more competitive? Free competition on anything but price vs. no competition?
Do you think Amazon was selling ebooks at less than the "wholesale" price and taking a loss out of the goodness of its heart? How about the average prices falling after Apple's entry in categories other than new releases? Maybe, Amazon was taking a loss with new releases and making it up at higher prices on older books.
Are you sure? Who admits guilt in settlements these days?
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Publishers were free to price them at far less than $13 everywhere. It is not illegal for publishers to sell to retailers on contracts forbidding sales at below MSRP levels.
In the meantime, a large number of books (~25% of titles or something like that) are sold exclusively through Amazon, no other retailer can sell them at any price. Which is more competitive? Free competition on anything but price vs. no competition?
Do you think Amazon was selling ebooks at less than the "wholesale" price and taking a loss out of the goodness of its heart? How about the average prices falling after Apple's entry in categories other than new releases? Maybe, Amazon was taking a loss with new releases and making it up at higher prices on older books.
Nothing Amazon did was illegal. Or collusion.
Publishers didn't lose a dime off eBook sales when Amazon sold them for whatever price. They still got paid the same - not 70% of whatever Amazon sold it for.
Exclusivity was contracted. Neither party FORCED an exclusivity deal.
The biggest problem with the approach to this case is that everyone is looking at it from the standpoint of one market: the eBook market. Amazon has kept eBook prices artificially low, but no one has questioned the downside of that to consumers. It's easy to see when the retailer is involved with a single product; John D. Rockefeller being the prime example. Make prices so artificially low that you gain control in other areas. In the case of Amazon, artificially lowering the price of eBooks to draw in customers to other areas of the business stifles innovation by motivating publishers to resist the natural trend to eBooks. Publishers obviously don't want to go the way print media has so far. Continuing with the model as set by Amazon could have potentially devastating effects on the publishers.
The case made by the DoJ essentially asserts that Apple used it's muscle to persuade book publishers to sign on with the "favored nation clause." In reality, it gave publishers a model through which they could embrace the change in technology, and remain profitable.
To assert that price is the only determining factor in consumer interest is ludicrous. Consumers definitely had a demand for eBooks, especially on tablets. The unnaturally low prices set by Amazon inhibited the adoption of the newer technologies by publishers that allow for more consumer choice.
The case made by the DoJ essentially asserts that Apple used it's muscle to persuade book publishers to sign on with the "favored nation clause." In reality, it gave publishers a model through which they could embrace the change in technology, and remain profitable.
To assert that price is the only determining factor in consumer interest is ludicrous. Consumers definitely had a demand for eBooks, especially on tablets. The unnaturally low prices set by Amazon inhibited the adoption of the newer technologies by publishers that allow for more consumer choice.
Amazon's business model isn't better by any stretch of the imagination. Last calendar year (2012), Amazon lost 39 Million dollars, Apple for the same 12 months made 41.7 BILLION dollars. Last quarter (Jan-Mar 2013), Amazon made a whopping 82 Million Dollars for the quarter, Apple for the same time made 9.5 Billion dollars, to put that into prospective, Apple averaged more then 100 million dollars a day in profit last quarter, Amazon made less then a 100 million (82 million) for the entire quarter. Amazon's business model for books is a failing proposition, they are buying books at one price and selling them at a lower price then they are buying them, that is what the publishers new pricing was preventing, and what Amazon wanted stopped. Amazon doesn't make money on its ebooks, it loses money on ebooks, it has admitted that, but once they are a monopoly (and realize they are the main reason Borders is out of business), I can guarantee they won't be selling books at a loss.
You can't compare Amazon as Apple in totality as business equals. They are not. Two completely different companies.
And again - Amazon made money from eBooks and didn't sell every eBook at a loss.
You can't guarantee anything. You can only conjecture.
And please provide a proof point that Amazon doesn't make money on eBooks.
amazon's business model is irrational
economic theory works on rational behaviour.
The issue here is that selling lots of new books at a below whole sale price means Amazon is acting irrationally.
No normal competitor can compete with that price because ultimately no business can afford to lose money. The whole point of business is to make money by selling products or services with an additional margin.
How many people pay for news now? very few because google/web devalued news by making it available for free. Now the standard is set, its almost impossible for new entrants to come into the market selling news.
How many music artist make money off selling music? practically none right now. There is very little money left in actually selling recorded music. Money is made on 360 deals and marketing spin offs. This is because music is practically free in the publics eyes. Who did this? Napster/Torrents/Google
So its not crazy to assume that amazon had the power to practically devalue books in the eyes of the consumer. That devaluation would be permanent in the consumers eyes. Thats what the publishers feared, and it's also the scenario Apple brought to the publishers.
It is one thing to offer the odd book or cd as a loss leader to bring in other business. It's another thing to have a consistent policy to sell lots of brand new books at below wholesale price. I think competition needs to be fair otherwise you will put other vendors out of business. Multiple vendors and producers are the only way we can defend against monopolies and ensure the best products and services for consumers. Allowing predatory price dumping will lead to less consumer choice and ultimately a worse service for consumers.
economic theory works on rational behaviour.
The issue here is that selling lots of new books at a below whole sale price means Amazon is acting irrationally.
No normal competitor can compete with that price because ultimately no business can afford to lose money. The whole point of business is to make money by selling products or services with an additional margin.
How many people pay for news now? very few because google/web devalued news by making it available for free. Now the standard is set, its almost impossible for new entrants to come into the market selling news.
How many music artist make money off selling music? practically none right now. There is very little money left in actually selling recorded music. Money is made on 360 deals and marketing spin offs. This is because music is practically free in the publics eyes. Who did this? Napster/Torrents/Google
So its not crazy to assume that amazon had the power to practically devalue books in the eyes of the consumer. That devaluation would be permanent in the consumers eyes. Thats what the publishers feared, and it's also the scenario Apple brought to the publishers.
It is one thing to offer the odd book or cd as a loss leader to bring in other business. It's another thing to have a consistent policy to sell lots of brand new books at below wholesale price. I think competition needs to be fair otherwise you will put other vendors out of business. Multiple vendors and producers are the only way we can defend against monopolies and ensure the best products and services for consumers. Allowing predatory price dumping will lead to less consumer choice and ultimately a worse service for consumers.