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Justice Department Presents Opening Arguments Against Apple in E-Book Price Fixing Trial
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I'm not arguing with your assertion which was literal. What was said on the video. I was debating the interpretation by the poster I was quoting.
Yep. Which is why I made the distinction.
Yep. Which is I haven't made any conclusions as to whether or not Apple is guilty.
Only because you are assuming things.
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
Who is? I was clear on my position and my bias. Would you like to discuss the issues? Or are you just interested in questioning my integrity, as usual?
IMHO, Amazons lowest price system WILL KILL exactly what they hope to exploit. Publishers could just as well stop making eBooks if the profit margins are less then paper books.
Apples plan with its higher book prices, and its only a few dollars more (easily affordable by almost all Americans), make it attractive to do eBooks and will encourage faster adaptation and eventually greater selection.
DoJ time better spent monitoring then suing.
Apples plan with its higher book prices, and its only a few dollars more (easily affordable by almost all Americans), make it attractive to do eBooks and will encourage faster adaptation and eventually greater selection.
DoJ time better spent monitoring then suing.
I'm not sure what your argument is here. The agency agreement and MFN clause resulted in the same book being the same price at different retailers. It's not really a mystery.
Hello pot.
I think you're one of the last people to tell me (or someone else) that they should discuss the issue vs commenting on someone's post. I (and others) have commented before that it seems to be your operendi. As is questioning other people's integrity. But you know what - enough. No point in discussing issues you and I may or may not have with each other.But I haven't assumed anything. Since you state you have a bias and since I stated that it SEEMS like you are being selective - you've validated my point. Thanks for that
Amazon e-commerce model for ebooks:
Loss leaders on best sellers ebooks to get people into Amazon.com where hopefully, they will buy profitable none best selling ebooks.
Overall, Amazon will make a profit from selling ebook. According to DOJ evidence, Amazon has been profitable from selling ebooks.
Apple e-commerce model for ebook: 30% margin
The two models can co-exists. Apple doesn't need to compete with Amazon on prices. Apple can use agency and Amazon can use wholesale.
What is illegal though is that Apple can't collude with 5 Major Publishers to force Amazon to abandon its prefer model so that Apple doesn't have to compete on price with Amazon.
DOJ is arguing that is what happened. Amazon was forced to abandoned its prefer method of selling. As a result, Apple no longer have to compete on price with Amazon since "the prices will be the same."
Loss leaders on best sellers ebooks to get people into Amazon.com where hopefully, they will buy profitable none best selling ebooks.
Overall, Amazon will make a profit from selling ebook. According to DOJ evidence, Amazon has been profitable from selling ebooks.
Apple e-commerce model for ebook: 30% margin
The two models can co-exists. Apple doesn't need to compete with Amazon on prices. Apple can use agency and Amazon can use wholesale.
What is illegal though is that Apple can't collude with 5 Major Publishers to force Amazon to abandon its prefer model so that Apple doesn't have to compete on price with Amazon.
DOJ is arguing that is what happened. Amazon was forced to abandoned its prefer method of selling. As a result, Apple no longer have to compete on price with Amazon since "the prices will be the same."
Agreed. But obviously since Apple was late to the game in the eBook market - the most logical (not legal though) way was to rig the game. Since they didn't want to cut into profits - the only way to be on even footing with competition was to "force" pricing which would make the consumer not care where they bought from since it was all the same. And since Apple has iTunes - arguably the strongest online media distribution stores - and millions of devices tapped into it - iBooks would be successful.
However - they (in my opinion) still have a missing piece of the puzzle aside from pricing. And that is that you can ONLY read an iBook on an iDevice. Whereas with Amazon - you can buy a book there - and read it on almost any device.
Even with all prices being the same - the versatility (which does matter to some) is not there.
And the collusion would only work if at least 4 Major Book Publishers agree to it. Penguin indicated that it won't go along unless 3 other Major Publishers also sign up.
Imagine only 1 major publisher goes agency ($12.99/$14.99) and 5 major publishers do not ($9.99), that 1 major publisher would lose a lot of market share.....Before long, it would switch back to wholesale.
That's why it is crucial that at least 4 of the 6 major publishers are on board.
From DOJ opening statement/slides
http://www.scribd.com/doc/145486131/U-S-v-Apple-Et-Al-Opening-Slides
"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 CEO 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
Penguin CEO 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."
![double-delete-doj-640x473.png]()
Imagine only 1 major publisher goes agency ($12.99/$14.99) and 5 major publishers do not ($9.99), that 1 major publisher would lose a lot of market share.....Before long, it would switch back to wholesale.
That's why it is crucial that at least 4 of the 6 major publishers are on board.
From DOJ opening statement/slides
http://www.scribd.com/doc/145486131/U-S-v-Apple-Et-Al-Opening-Slides
"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 CEO 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
Penguin CEO 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."
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The DOJ Charts the eBook Market Before & After Agency
http://www.the-digital-reader.com/2...gitalReader+(The+Digital+Reader)#.UZRZVbW-YZC
![agencyprices-1024x555-500x270.jpeg]()
Notice the stable graph from Random House.....the 1 major publisher that was not sued by the DOJ/EU because it didn't sign up to the agency pricing/MFN.
http://www.digitalbookworld.com/201...-as-big-publishers-continue-to-dominate-list/
DOJ Has Huge Impact on Best-Seller Pricing
It’s hard to say what the overall affect has been on the larger ebook market but on the top best-sellers, the effect has been obvious and significant:
– The average price of an ebook best-seller this week is $6.95 (virtually unchanged from last week when it was $6.94), just over half of what it was last summer before the discounting began (though discounting is only one of the factors that has led to this phenomena).
![ebook-best-seller-avg-price-21.png]()
http://www.the-digital-reader.com/2...gitalReader+(The+Digital+Reader)#.UZRZVbW-YZC
Notice the stable graph from Random House.....the 1 major publisher that was not sued by the DOJ/EU because it didn't sign up to the agency pricing/MFN.
http://www.digitalbookworld.com/201...-as-big-publishers-continue-to-dominate-list/
DOJ Has Huge Impact on Best-Seller Pricing
It’s hard to say what the overall affect has been on the larger ebook market but on the top best-sellers, the effect has been obvious and significant:
– The average price of an ebook best-seller this week is $6.95 (virtually unchanged from last week when it was $6.94), just over half of what it was last summer before the discounting began (though discounting is only one of the factors that has led to this phenomena).
I can only speculate at the motivation for spreading misinformation about the effect of a 'most favored nation' clause in a contract, but it doesn't have the effect you describe.
A 'most favored nation' clause says absolutely *nothing* about what prices can be offered to other customers. It only says that *if* another customer receives a lower price, then you *also* get to take advantage of that price.
Your claim is: If A offers B a price of $10 with an MFN clause, then A cannot offer C a price of $9, and nobody can pay less than $10.
A 'Most Favored Nation' clause says: If A offers B a price of $10 with an MFN clause, then when A negotiates with C for a price of $9, then B *also* gets that price of $9.
If C *doesn't* have an MFN clause in their contract, then A could go back and offer B $8 instead of $10 or $9. Without the MFN clause, C would still be paying $9.
A most favored nation clause does not set a price floor. It simply ensures that your supplier won't undercut you with the competition.
I don't just believe it, it is. That's a fact, whether you believe it or not. I'm not saying it should be, but it is. And because it is a fact, "DRM that can be easily removed" is just as bad as "DRM that is hard to remove". Why would I buy stuff that I can only use the way I want by becoming legally a criminal? That would be stupid. Since Amazon sells books that way, I avoid them.
What you don't seem to get: This isn't about what I am doing, this is about what Amazon forces me to do. It's insulting.
It's the Major Publishers who insist on DRM, not Amazon.
TOR, a flagship publisher of MacMillian, recent went DRM free.
A lot of indie books on Amazon are DRM free. The publishers have the option to opt in or opt out of DRM.
http://www.theverge.com/2013/5/4/43...fter-one-year-of-selling-drm-free-ebooks-says
Piracy not an issue after one year of selling DRM-free ebooks, says Tor Books
It's the publisher that want DRM, not the retailer.
It's also another publisher at another major Publisher that want TOR to abandoned its DRM-free approach and go back to DRM.
p.s. Did the music labels insisted on DRM on Itunes back in the day?
or was it Apple that insisted on DRM?
with ebook, it's the major publishers who want DRM, not retailers like Amazon, Apple, GooglePlay, Nook, Kobo and Sony.
http://www.forbes.com/sites/suwchar...or-abandons-drm-other-publishers-must-follow/
Macmillan's Tor Abandons DRM, Other Publishers Must Follow
I guess no other Major Publishers have followed. Not even Macmillan, the owner of TOR.
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on what planet can you make up selling for a loss...in volume!? you cant. it's mathematically impossible.
what amazon is doing -- selling at a loss today, to push for-profit competitors out of business, and then raise the prices tomorrow once the competition has been destroyed.
And what Amazon forces you?
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Amazon is not selling at a loss, Amazon is selling SOME boojs at a loss but the overall division is profitable.
Apple went crying to the DOJ because Amazon were selling at a loss being a monopoly and that's just bad mkay...
Well turns out the DOJ investigated Amazon, overall the ebook business has turned a profit almost from the start, so nothing wrong at all, what they did find was the change to the rules brought by the iPad and iBooks, so they turned to investigating Apple...
Funny how that turned out.
As someone else posted, what's stopping google from selling cheaper than Amazon when the competition has been destroyed and Amazon begins increasing prices.
Exactly! I've bought more eBooks in the last year than ever before now that they are reasonably priced but if the prices went up I'd just stop buying... until someone else entered the market and sold them for reasonable prices again.
This is the point that seems to confuse most people. The publishers were making money off ebooks even when Amazon were selling them at razor thin margins. The old system worked something like this...
Publisher sells single license of an ebook to Amazon at $7.99 per copy.
Amazon turns around and sales books anywhere from, say, $6.99 to $12.99 depending on the title.
The publishers were already paid for their books. They've been making money off ebooks since the very beginning. The problem they had with Amazon's pricing is that they'd sell ebook editions for a good deal less than what the paper books were selling for in stores. It was cutting into their profits there.
But the thing is, ebooks should cost less than paper books, since no physical materials are used, and hosting a server costs far less than the materials and shipping costs required to getting a paper book into someones hand.
The publishers wanted to have their cake and eat it too. Unfortunately for them, the convenience of digital goods made it hard for them to do so. They complained, Amazon didn't listen (and why should they), and eventually colluded to drive the price of ebooks up to roughly the same price as paper books.
Doing something illegal does not equate to being a criminal. Not even close. There are many many instances of freedoms we enjoy today being illegal in the past. This is an issue our justice system will have to face. Up until now, it hasn't, because no one has ever attempted to prosecute an individual for removing a DRM of an eBook. If laws we so black and white, we wouldn't need a justice system to interpret the laws and how they relate to individual actions - we would just have our police force enforcing and automatically administering punishment.
But, DRM arguments aside, I still don't know why you think Amazon-purchased eBooks are proprietary whereas iTunes eBooks are not. Amazon is not really forcing you to do anything. Pick a platform, pick any device (save the Nook), and you can read your eBooks. Not only are Apple's ePubs not cross-platform compatible, Apple even restricts which Apple devices you can read your book on. Want to read your ePub on your new MBA? Forget it.