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greatfx

macrumors newbie
Oct 24, 2012
14
0
I just want to add that some of the cognitive dissonance in this thread is simply amazing!!

It reminds me of this.
 

Renzatic

Suspended
Actually if you go back to the original comments about this matter, reps from the DOJ made comments like 'there is a right price for ebooks and we know what it is'. Which suggests that yes they believe pricing is part of this issue.

That is rather dumb of them to say, because $12.99 average isn't THAT much for a newly released ebook. The issue isn't that we're being gouged at the register, it's that the prices are being fixed across the board.
 

Oletros

macrumors 603
Jul 27, 2009
6,002
60
Premià de Mar
There are plenty of eBooks on Apple's store that are not DRM protected. And plenty of books from other sources in unprotected ePub format.

There are plenty of eBooks on Amazon store that are not DRM protected. And plenty of books from other sources in unprotected mobi format.

----------

Actually if you go back to the original comments about this matter, reps from the DOJ made comments like 'there is a right price for ebooks and we know what it is'. Which suggests that yes they believe pricing is part of this issue. And that they have a say in the matter

Can you provide a link to those quotes? I highly doubt they said that.

----------

Predatory pricing is illegal in the US and Amazon is pricing many best sellers below cost.

And pricing many best sellers below cost is predatory pricing? Because the DoJ said that it isn't
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
Whatever happened to free choice?

Consumers who don't like Apple pricing, can go to Amazon. Its that simple!

If only it is that simple. When you go to Amazon, the pricing would be the same as Apple. The retail price has been fixed at all ebook retailers. In other words, retail price competition ceased to exist. That's why the DOJ went after Apple and the 5 Publishers.


starting at 0:10

Mossberg: “[first part is inaudible] why should she buy a book for $14.99 on your device [iPad] when she can buy one for $9.99 at Amazon [inaudible]?”
Steve Jobs: “Well, that won’t be the case.”
Mossberg: “You mean you [iBooks] won’t be $14.99 or they [Amazon] won’t be $9.99?”
Steve Jobs: “The prices will be the same.” '
 

LethalWolfe

macrumors G3
Jan 11, 2002
9,370
124
Los Angeles
That's downloadable music market share.

Apple's market share in digital music is around 30%. The point was to compare Amazon's domination of the book market with Apple relatively low share in music.
Usually when people say digital they mean downloads. Do you mean downloads and streaming? Or possibly even downloads, streaming and CDs since they are all digital?;) I don't know who started the trend of calling everything online 'digital' but that's a pet peeve for another thread...

When talking about the download music business isn't it relevant to compare apples to apples?

And market share is a significant factor in antitrust law.
It is, yet Amazon isn't the one on trial... ;)

We already discussed this. The difference is intent to drive out competition.
The competition can be driven out as long it's not done by anti-competitive measures (I'd say most businesses have the intent of driving out the competition). Yes, I know, you think Amazon's loss leaders constitute predatory pricing. Anti-trust laws in the US are designed with the customer's best interests in mind, not to keep one business from beating another.

At this point we should probably agree to disagree lest this turn into the LethalWolfe and BaldiMac perpetual thread of bickering. lol
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
The bottom line, from what I've read extensively on the subject is, Apple said, "Hey guys, you want to charge whatever you want for your books?" and the publishers said, "Yes please." There is nothing illegal about what apple and the publishers did, it's merely the free market at work. If you want to buy your books somewhere else, you're more than welcome to.


That would work if I can shop around for the best price.

But wherever I go to buy the ebook, for some reason, the PRICES ARE ALWAYS THE SAME.





starting at 0:10

Mossberg: “[first part is inaudible] why should she buy a book for $14.99 on your device [iPad] when she can buy one for $9.99 at Amazon [inaudible]?”
Steve Jobs: “Well, that won’t be the case.”
Mossberg: “You mean you [iBooks] won’t be $14.99 or they [Amazon] won’t be $9.99?”
Steve Jobs: “The prices will be the same.” '
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
The difference is intent to drive out competition.

How can any company drove out competitions selling DIGITAL GOODS?

Entry level is very low. A guy in his garage can undercut Amazon at anytime that Amazon raises its price to reap the "monopoly profits."

Let's imagine Amazon is an ebook monopoly with 100% market share because it buy ebook at $9.99 and sell it at $9.99. No one can compete so they all went out of business.

Now Amazon with its 100% market share monopoly and it want to abuse it in order to make money, Amazon buy ebook at $9.99 and sell it $13.99 (a $4 profit).

What's to stop a guy in his garage to buy ebook at $9.99 and sell it at $11.99? (undercutting Amazon by $2).

If a guy in his garage can do that, what to stop Google, Microsoft, Sony, Kobo, Nook, Apple from doing the same?
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
from another forum (credit to poster Pendergast)


Price fixing isn't illegal, in and of itself.

The issue is whether the major publishers CONSPIRED TOGETHER to fix their prices (which they likely did, given they settled), and, if so, whether Apple was the instigator of said conspiracy.

For example:

Scenario #1: Apple approaches Publisher A, who has 20% market share, about the agency model. Publisher A agrees, and fixes the selling price at $12.99, and agrees not to allow it to be sold cheaper anywhere else under a Most Favored Nation Clause.

Not illegal.


Scenario #2: Apple approaches Publishers A, B, C, D, and E, who COMBINED have over 70% market share. They all agree to adopt the agency model, and decide TOGETHER to fix the selling price at $12.99, yadda yadda yadda.

Illegal for everyone.

Notice the difference? The key is if the publishers conspired together, thus abusing their combined market positioning; price fixing is thus illegal. Apple, by "running point" on this is also guilty.


Scenario #3: Apple approaches Publishers A-E, but does so separately. Without Apples knowledge, the Publishers all talk amongst themselves, and agree to ALL follow the agency model and agree to Apple's terms, yadda yadda yadda.

Illegal for the publishers, not for Apple.

Apple is being accused of being intimately involved in the alleged conspiracy; Apple is arguing that it in good faith just negotiated this agreement with the various publishers, and was not party to any conspiracy; from Apple's point of view, is this any different than when they negotiated the $0.99 and $1.29 iTunes songs?
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
Here's the government case on opening day:

http://www.scribd.com/doc/145486131/U-S-v-Apple-Et-Al-Opening-Slides

Lot of damaging phone conversations and emails. Here are some:

"You are absolutely correct: we've always known that unless other publishers follow us, there's no chance of success in getting Amazon to change its pricing practices."

--------------

Penguin David Shanks: "My orders from London. You must have the fourth major or we can't be in the announcement."

Apple Eddy Cue: "Hopefully this is not an issue but if it is I will call you at 4pm. It would be a huge mistake to miss this if we have 3."

No change here, he is waiting for the others to sign. We have executables ready to sign but he wants an assurance that he is 1 of 4 before signing.

Once previous two are signed, I will head to their offices to get this one signed

--------------

Look like Penguin would opt out if there are only 3 major Publishers colluding. From their perspective, they needed at least 4. In the end, Apple got 5 major Publishers.

All of whom were sued and all have settled with the US and EU. In the USA they agreed to pay $170 million in restitution

http://www.bbc.co.uk/news/business-22746776
The largest settlement was with Penguin for $75m (£49m).

Hachette, HarperCollins and Simon & Schuster created a $69m fund for refunds to consumers and Macmillan settled for $26m.
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
Did Penguin executive David Shanks admitted that Apple serves as the facilitator and go between?

Page 81 of DOJ opening:

http://www.scribd.com/doc/145486131/U-S-v-Apple-Et-Al-Opening-Slides

David Shanks: "We would never meet with Barnes and all our competitors. The Government would be all over that. We would meet separately with Indigo being the facilitator and go between. That is how we worked with Apple and the government is still looking into that."
 

kas23

macrumors 603
Oct 28, 2007
5,629
288
So, Apple is stating they were always against the agency model and fought against it. Who's going to abruptly change their opinion of it and who's going to keep defending it? Should be interesting.

http://9to5mac.com/2013/06/04/apples-ebook-defense-had-to-fight-publishers-and-knew-nothing-of-their-discussions/

Apple should just buy the DOJ.

This "Apple should buy this, buy that" has got to stop. It's not quite apparent that all the "cash" Apple has is mostly an illusion. It seemed liquid, but it's far from it. 2/3 of it is held overseas and would be subject to a rather large tax bill if Apple ever tried to use it, which they have shown they would rather not.
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
someone wrote this comment over at cnet

http://news.cnet.com/8301-13579_3-57586559-37/apple-ceo-we-rejected-doj-settlement-in-e-book-suit/


If we follow the supermarket analogy, here's how it would work under apple's/the agence model: if a can of beans is $1 at Superduperfresh, that same can must be $1 at Megafresh, at Stop-n-shop, Hog-n-slop, etc--same price everywhere. No sales allowed, unless the bean-maker says so, and then it must be the sale price the bean-maker dictates, again at all grocers. If the consumer wants those beans, he cannot shop around--he must pay bean-makers price, wherever he goes.

That's the arrangement the big 5 and Apple had--the price of a given book is the same at all retailers, and the retailers have no control over it.


Returning to how grocery stores actually work. if Superduper wants to sell the beans for a penny, to get us in the door to buy other goods, they can do so. Sure, they bought the beans from the distributer for $.50, so they're selling at a big loss, but they figure they can make it up on the other items we buy.

(that's one point that often gets lots in this conversation: Amazon was paying the publishers their asking price for their books, and selling them at a loss--the loss was Amazon's.)

And sure, under the agency model, the publisher ostensibly set the price, but it's curious how they all fell in line with the $12.99-14.99-16.99 price points, the same at all publishers, and--here's the kicker--it's a very familiar set of numbers (see itunes prices for new albums).

RE: The Amazon monopoly. Before Amazon, there was no real ebook market--they created it through their marketing strategy and their willingness to sell at a loss. Was it a monopoly? What is it when you create a market for something?

IN any case, if was a monopoly, fine, but Apple and the big 5 don't get to decide that. As with any legal issue, it goes to the courts. But Apple is casting itself as judge, jury, and e-executioner of Amazon to justify its appalling arrangement with the big 5. The arrogance astounds.
 

SPUY767

macrumors 68020
Jun 22, 2003
2,041
131
GA
Yep. The difference is that with Amazon's strategy, I lose the benefit of a physical bookstore to browse.



I disagree. I consider Amazon's strategy to be predatory pricing.



I don't for books.



Me too.



Again, I disagree with respect to Amazon.



Maybe. I've just seen no evidence that Apple participated in any collusion.

Correct. Apple only offered sellers another venue to sell their books in. Apple didn't collude with them to raise prices, but after they found themselves out from under Amazon's boot, they felt they had a stronger footing to actually charge enough for the books to make a profit.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
What's more fascinating is to hear how defensive (and dismissive) Steve is when talking about battery life and competition. If anyone thinks that Steve/Apple doesn't see the Kindle as competition to the iPad (or did) - they couldn't be more wrong.



YouTube: video
starting at 0:10

Mossberg: “[first part is inaudible] why should she buy a book for $14.99 on your device [iPad] when she can buy one for $9.99 at Amazon [inaudible]?”
Steve Jobs: “Well, that won’t be the case.”
Mossberg: “You mean you [iBooks] won’t be $14.99 or they [Amazon] won’t be $9.99?”
Steve Jobs: “The prices will be the same.” '
 

SPUY767

macrumors 68020
Jun 22, 2003
2,041
131
GA
RE: The Amazon monopoly. Before Amazon, there was no real ebook market--they created it through their marketing strategy and their willingness to sell at a loss. Was it a monopoly? What is it when you create a market for something?

IN any case, if was a monopoly, fine, but Apple and the big 5 don't get to decide that. As with any legal issue, it goes to the courts. But Apple is casting itself as judge, jury, and e-executioner of Amazon to justify its appalling arrangement with the big 5. The arrogance astounds.

An ill-gotten monopoly is illegal. No one claimed that Apple's de facto monopoly in mp3 players was illegal, well, at least not anyone with a functioning brain stem, because there was no way in hell to claim that Apple was denying users choice, because Apple's products all commanded a premium price which users chose to pay. Amazon has crafted a monopoly by pricing its wares under cost in order to drive the competition out of business, no one can make money in the eBook business because Amazon has decided that it's willing to lose money on every book sold.

----------

Steve Jobs: “The prices will be the same.” '

Steve was most likely referring to the nature of a free market where everyone takes a cut and the prices end up being similar because of supply, demand, and margins. No one could have ever figured on a rogue like Amazon who has a free pass from the market on turning a profit, and can just lose money every quarter in the interest of market share.
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
An ill-gotten monopoly is illegal. No one claimed that Apple's de facto monopoly in mp3 players was illegal, well, at least not anyone with a functioning brain stem, because there was no way in hell to claim that Apple was denying users choice, because Apple's products all commanded a premium price which users chose to pay. Amazon has crafted a monopoly by pricing its wares under cost in order to drive the competition out of business, no one can make money in the eBook business because Amazon has decided that it's willing to lose money on every book sold.

----------



Steve was most likely referring to the nature of a free market where everyone takes a cut and the prices end up being similar because of supply, demand, and margins. No one could have ever figured on a rogue like Amazon who has a free pass from the market on turning a profit, and can just lose money every quarter in the interest of market share.

Amazon willing to lose money on every book sold? Where you get that from?

Amazon is making an overall profit from selling ebook according to the DOJ.

It loses money on some ebooks that it sell (the best sellers) but it make profits from the none best sellers that it sell. That's how a lot of supermarkets operate. Lose money on loss leaders but make overall profits since you get customers into the store.

Apple could have done the same thing as Amazon and competed on price.

Apple is better suited to adopt Amazon strategy: Sell best sellers as loss leaders. MAKE PROFITS on the 95% of other ebooks.

Apple makes most of it profit from hardware. It could afford to run the iBookstore at breakeven if it wants to. By competing head on with Amazon on price, Apple will gain market share. Consumers will benefit with retail price competition. Instead, we got the opposite: the elimination of retail price competition.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
Steve was most likely referring to the nature of a free market where everyone takes a cut and the prices end up being similar because of supply, demand, and margins. No one could have ever figured on a rogue like Amazon who has a free pass from the market on turning a profit, and can just lose money every quarter in the interest of market share.

Well to be fair - you nor I have no idea what Steve was or was not referring to.
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
This is worth a repost.

This is the top comment on this topic @ r/technology.

[–]competitionroolz 2581 points 1 day ago*x2
Hi, all. Long time lurker, first time poster. I am an antitrust lawyer (among other things) and have followed this case closely, because it is interesting. Lots of the information in this thread is not accurate, probably because the coverage of this case fails in large part to capture its nuances. I am accordingly going to try to explain what is up.

Allow me to set the stage. Back in 2009, eBooks were sold using the traditional retail model, i.e. publishers sold them to resellers (like Amazon) and the resellers sold them at whatever price they chose. Amazon chose to sell them cheaply (at $9.99), even sometimes below cost, because they wanted everyone to buy Kindles and they thought cheap eBooks were the best way to make that happen. Even though the price at which Amazon sold eBooks to consumers did not directly affect the price the publishers received for those eBooks, the publishers still hated the cheap price, primarily because it threatened the paper book industry, i.e. if eBooks were cheap, people would more readily switch to that format instead of buying paper books (I believe publishers made more money off paper books).

Around this time, Apple was looking to introduce this neat new product called an “iPad” which, among other things, could serve as an eBook reader. The then-living Steve Jobs also hated what Amazon was doing, because it led to a perception that $9.99 was the proper price for an eBook and this limited the price at which Apple could sell eBooks through the iBookstore, meaning Apple made less money. As such, both Apple and the publishers had tremendous incentive to prevent Amazon from selling discounted eBooks.

So, what were the poor beleaguered publishers to do? Well, there was this other way of selling eBooks, called the “Agency Model.” As opposed to the traditional method of reselling eBooks described above (publisher sells to reseller, reseller sells to consumer at price it chooses), when a reseller sells an eBook pursuant to the Agency Model, the publisher from which the eBook originated controls the price at which the eBook is sold to the consumer. In other words, the contracts between the publishers and Amazon (for example) would require Amazon to sell that eBook at a price dictated by the publisher, thereby preventing Amazon (or anyone) from discounting eBooks.

There is a problem, though: if only one publisher begins selling books pursuant to the Agency Model, all that happens is that that publisher’s eBooks get more expensive and price-sensitive consumers switch to cheaper eBooks from other publishers. So the agency strategy only works if all publishers implement the strategy at the same time. It is the classic collective action problem: the benefits exist only if all parties move together, while the burdens fall on any party moving independently.

SPOILER ALERT: THIS IS WHERE THINGS GET ILLEGAL. Two things then (allegedly!) happen, one involving Apple and one not. The latter first: the publishers begin discussing among themselves agreeing to implement the Agency Model simultaneously, thereby making sure prices rise across the board. But they could not really make it happen until the second thing happened.

The second thing: Enter Jobs and the iPad. Jobs and Apple wished to switch the entire publishing industry to the Agency Model and, accordingly (also allegedly!) served as a go-between through which the publishers agreed to simultaneously switch to the Agency Model. In other words, Jobs went to publisher #1 and said “will you implement the Agency Model if publishers ##2,3,4, and 5 do?” Publisher #1 says “yes!” Jobs then goes to publisher 2 and says “Publisher #1 has agreed to switch to the Agency Model if you do. That cool?” Publisher #2 says “yes!” And so on. Pretty soon, Jobs has orchestrated an industry-wide agreement to impose the Agency Model.

The implementation of the Agency Model occurs essentially simultaneously with the introduction of the iPad. Amazon kicks and screams and fights, but succumbs to the model after some publishers just stop doing business with it until it agrees to do so. Now, the publishers have the ability to dictate the price at which Amazon and other resellers sell eBooks to consumers. They exercise that right to impose an across-the-board price increase on eBooks sold through all outlets. As a practical matter, this means the price for eBooks published by major publishers immediately jumps from $9.99 to $12.99 (in most instances).

Brief digression into antitrust law: What is critical to the wrongdoing here is the fact that there were agreements between the publishers pertaining to price. Because the publishers are competitors, the agreement was horizontal, meaning they occupy the same place in the distribution chain and sell to the same people. Horizontal agreements pertaining to price are the “supreme evil” condemned by the antitrust laws, and are the very most illegal thing competitors can do. This is because there is no possible competitive justification for a price-fixing agreement. What this means is that if Justice and the private plaintiffs can demonstrate the publishers agreed to put this agreement in place, the case is over and the publishers lose. So, the publishers, when caught, are up **** creek, and they all settle.

So, what about Apple? Because Apple does not compete with the publishers, its liability is premised on the fact that it orchestrated the agreements between the publishers. In other words, it is not really liable for any agreements it, itself, made. Rather, its liability (if proven) stems from the fact that it worked behind the scenes to make the horizontal agreements happen. It is a so-called “hub-and-spoke” conspiracy. Think of a wagon wheel. Apple is the hub. The publishers are the spokes. And the rim of the wheel is the illegal agreement. While Apple is not directly in competition with any of the publishers, by inserting itself as the hub through which the illegal conduct was facilitated, it incurred liability. I have not seen their pretrial statement, but I would guess their defense is that there may very well have been an illegal agreement between the publishers, but they did not make it happen.

That is the long and short of it. Couple of folks on here made reference to most favored nations clauses. This case really is not about those – they existed in the agreements, sure, and they were bad (and likely an enforcement mechanism), but the wrongdoing was the agreement on price.
Couple folks also made reference to monopolization. Also not an issue here. Apple is not, and never was, a monopolist in the eBooks market. The case is about horizontal agreement, i.e. good old cartelization & price-fixing.
It is interesting stuff, at least to me. I hope this explanation is helpful to some of you. Now I will go back to editing my brief.

TL/DR: This case is really just about a fancy new way of fixing prices, and everyone is guilty as hell.

Edit: To fix typos (typed Amazon where I meant to type Apple in last sentence of para 3; fixed there/there typo; similar etc.)

Edit: All of the above is based on allegations, not proof. Nothing will be proven until the trial is over, and if the government can't prove what they claim is true, they will lose. They might lose no matter what. Trials are scary, man.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
I disagree. I consider Amazon's strategy to be predatory pricing.

Again, I disagree with respect to Amazon.

Maybe. I've just seen no evidence that Apple participated in any collusion.

What you consider illegal and what is illegal are two difference matters. That you've seen no evidence of Apple participating in collusion is also irrelevant to whether or not Apple is guilty (or not guilty) or collusion.

Seems like you're being quite selective there. But given that you don't like Amazon (in regards to books and what they've done to local retailers) - I can understand you not being 100% objective :)
 

BaldiMac

macrumors G3
Jan 24, 2008
8,745
10,845
from another forum (credit to poster Pendergast)


Price fixing isn't illegal, in and of itself.

The issue is whether the major publishers CONSPIRED TOGETHER to fix their prices (which they likely did, given they settled), and, if so, whether Apple was the instigator of said conspiracy.

For example:

Scenario #1: Apple approaches Publisher A, who has 20% market share, about the agency model. Publisher A agrees, and fixes the selling price at $12.99, and agrees not to allow it to be sold cheaper anywhere else under a Most Favored Nation Clause.

Not illegal.


Scenario #2: Apple approaches Publishers A, B, C, D, and E, who COMBINED have over 70% market share. They all agree to adopt the agency model, and decide TOGETHER to fix the selling price at $12.99, yadda yadda yadda.

Illegal for everyone.

Notice the difference? The key is if the publishers conspired together, thus abusing their combined market positioning; price fixing is thus illegal. Apple, by "running point" on this is also guilty.


Scenario #3: Apple approaches Publishers A-E, but does so separately. Without Apples knowledge, the Publishers all talk amongst themselves, and agree to ALL follow the agency model and agree to Apple's terms, yadda yadda yadda.

Illegal for the publishers, not for Apple.

Apple is being accused of being intimately involved in the alleged conspiracy; Apple is arguing that it in good faith just negotiated this agreement with the various publishers, and was not party to any conspiracy; from Apple's point of view, is this any different than when they negotiated the $0.99 and $1.29 iTunes songs?

Exactly. Great explanation of the real issue.

How can any company drove out competitions selling DIGITAL GOODS?

Entry level is very low. A guy in his garage can undercut Amazon at anytime that Amazon raises its price to reap the "monopoly profits."

Let's imagine Amazon is an ebook monopoly with 100% market share because it buy ebook at $9.99 and sell it at $9.99. No one can compete so they all went out of business.

Now Amazon with its 100% market share monopoly and it want to abuse it in order to make money, Amazon buy ebook at $9.99 and sell it $13.99 (a $4 profit).

What's to stop a guy in his garage to buy ebook at $9.99 and sell it at $11.99? (undercutting Amazon by $2).

If a guy in his garage can do that, what to stop Google, Microsoft, Sony, Kobo, Nook, Apple from doing the same?

The threat that Amazon will resume its predatory pricing. You act like there's not a significant investment in starting an eBook store.

I don't see the hypothetical that competition can resume after Amazon ends its pricing strategy as a good argument.

So, Apple is stating they were always against the agency model and fought against it. Who's going to abruptly change their opinion of it and who's going to keep defending it? Should be interesting.

You just made that up.

someone wrote this comment over at cnet

http://news.cnet.com/8301-13579_3-57586559-37/apple-ceo-we-rejected-doj-settlement-in-e-book-suit/


If we follow the supermarket analogy, here's how it would work under apple's/the agence model: if a can of beans is $1 at Superduperfresh, that same can must be $1 at Megafresh, at Stop-n-shop, Hog-n-slop, etc--same price everywhere. No sales allowed, unless the bean-maker says so, and then it must be the sale price the bean-maker dictates, again at all grocers. If the consumer wants those beans, he cannot shop around--he must pay bean-makers price, wherever he goes.

That's the arrangement the big 5 and Apple had--the price of a given book is the same at all retailers, and the retailers have no control over it.


Returning to how grocery stores actually work. if Superduper wants to sell the beans for a penny, to get us in the door to buy other goods, they can do so. Sure, they bought the beans from the distributer for $.50, so they're selling at a big loss, but they figure they can make it up on the other items we buy.

(that's one point that often gets lots in this conversation: Amazon was paying the publishers their asking price for their books, and selling them at a loss--the loss was Amazon's.)

And sure, under the agency model, the publisher ostensibly set the price, but it's curious how they all fell in line with the $12.99-14.99-16.99 price points, the same at all publishers, and--here's the kicker--it's a very familiar set of numbers (see itunes prices for new albums).

RE: The Amazon monopoly. Before Amazon, there was no real ebook market--they created it through their marketing strategy and their willingness to sell at a loss. Was it a monopoly? What is it when you create a market for something?

IN any case, if was a monopoly, fine, but Apple and the big 5 don't get to decide that. As with any legal issue, it goes to the courts. But Apple is casting itself as judge, jury, and e-executioner of Amazon to justify its appalling arrangement with the big 5. The arrogance astounds.

After your wonderful explanation earlier, I'm not sure why you are back to arguing that the agency model is the problem.
 

EbookReader

macrumors 65816
Apr 3, 2012
1,190
1
Well to be fair - you nor I have no idea what Steve was or was not referring to.

We can make a damn good guess at what Steve meant by looking at what happened to the ebook market after he made that "the price will be the same" comment.


1)

did Amazon continue to sell their best sellers at $9.99? (NO, this didn't happen)
did Apple start to sell their best sellers at $9.99? (NO, this didn't happen)

2)

did Apple started to sell best sellers at $12.99/$14.99? (YES, this happened)
did Amazon raise its best sellers to the same $12.99/$14.99? (YES, this happened)

The prices were indeed the same.


Here's what Steve meant. I added the part at $12.99/$14.99 because that exactly what happened.


Mossberg: “[first part is inaudible] why should she buy a book for $14.99 on your device [iPad] when she can buy one for $9.99 at Amazon [inaudible]?”
Steve Jobs: “Well, that won’t be the case.”
Mossberg: “You mean you [iBooks] won’t be $14.99 or they [Amazon] won’t be $9.99?”
Steve Jobs: “The prices will be the same.”
(at $12.99/$14.99)

starting at 0:10

what if Mossberg asked: "The prices will be the same at $9.99 or $14.99?"

What would Steve honest answer be if he was to tell the truth since he orchestrated the move to $12.99/$14.99.


I imagine that it would be something like this if Steve Jobs had to answer instead of avoiding it:

Mossberg: The prices will be the same at $9.99 or $14.99?
Steve Jobs: It would be $14.99
 
Last edited:
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