I actually just bought season 1 - 4 of a TV series because it was cheaper than buying, or renting, via Amazon.com or iTunes (and it wasn't available on Netflix instant streaming; didn't think to check Hulu). Heck, I actually own quite a few DVD series because it was cheaper to buy the physical media than it was to rent/buy on iTunes, but I blame the studios more for that than I do Amazon or Apple.
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Settlement over e-Book Pricing to Undo Apple's Agency Model for Pricing?
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I actually just bought season 1 - 4 of a TV series because it was cheaper than buying, or renting, via Amazon.com or iTunes (and it wasn't available on Netflix instant streaming; didn't think to check Hulu). Heck, I actually own quite a few DVD series because it was cheaper to buy the physical media than it was to rent/buy on iTunes, but I blame the studios more for that than I do Amazon or Apple.
Proof of the fact that the value of e-books has been devalued, exactly the publishers' claims. By selling books as a loss-leader, Amazon has been trashing the book industry for its own gains. These kind of strategies are what lead to industry/market collapses. Good thing the Federal Amazon Justice Department came in to make sure of this.
When books are selling for $2 a pop (and combined with the general decline in reading interest), you'll all be complaining that all the books that are coming out are pulp trash, and you'll have nobody but yourself to blame as the sustainability of good authorship will have bottomed out.
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It's very similar with the recording industry, too. You self publish, you get to keep most of the royalties from your work (less whatever your outlet's cut is - very simplistic example: you sell something for $10, Amazon/Apple gets $3, you get the remaining $7). You go through a "big house" publisher, then your distributer gets their cut, your publisher gets their cut, and you get even less (using example above: Amazon/Apple would get their $3, BigHouse would get ~$5, you get a whole $2). Sure, you have the potential to reach a wider audience, but potential doens't put food on the table or gas in your car (and you have to sell more to make up the difference)).
This doesn't really make any sense. Neither the agency model nor the wholesale model affect what the author gets paid.
Publishers provide advertising and awareness to the author and filtering of content to the consumer. Without publishers, many consumers (myself included) would not be willing to wade through the sea of crap (look at the app store, there are a lot of great apps with no recognition) that would be the book market to find the few gems (which is what publishers do now). Someone surely might come along to fill this void (and make some nice cash off of it), but they do not exist currently.
And yet grocery stores have been doing this for 70 years. Odd that food prices haven't collapsed.
Or maybe your crackpot theory is just wrong. Amazon selling ~40 books slightly below cost (that's all it is) is not going to lead to the collapse of the book industry. It's amazing to me that so many people have no problem with clearly illegal collusion between publishers that almost immediately led to price increases of $2-$5 on bestsellers...but believe it's the end of the world if Amazon sells a bestseller for $1 below cost.
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When books are selling for $2 a pop (and combined with the general decline in reading interest), you'll all be complaining that all the books that are coming out at pulp trash, and you'll have nobody but yourself to blame as the sustainability of the author job will have bottomed out.[/QUOTE]
The is complete nonsense. You can already buy books at $2 a pop...90% of which are pulp trash. But this hasn't stopped the vast majority of people from happily paying much more for professionally edited books from major publishers.
The effect of the proposed settlement will be to *increase* the attractiveness of the professionally edited books because it will decrease the price differential between the self published book and the professionally published book.
I.e., in situation A, the consumer can buy an indie book for $2 or a publisher book for $15. In situation B, the consumer can buy an indie book for $2 or a publisher book for $10. Obviously, more consumers are going to buy publisher books for $10, which is better for the authors, since they are paid the same amount regardless of whether the book retails at $10 or at $15.
Likewise, the publishers get the same wholesale price from the retailer, regardless of whether the retailer sells above his cost or below it.
Sometimes. Lots of authors get little advertising support, at least nothing like the kind the million-sellers get. Publishers provide editorial guidance and distribution. The latter was far more important when access to the book markets meant being hooked into the distribution networks, and also when we had many more physical bookstores than exist today. I wonder what the role of publishers will be in the future, and I bet they are wondering too.
In any event, I'd say that Sturgeon's Law applies whether the publishers are the gates-keepers or not. With the opening of the independent self-publishing world to just about anyone, the universe of crap just got larger. I suspect the proportions of worthy material to crap within that universe probably hasn't changed a great deal.
When books are selling for $2 a pop (and combined with the general decline in reading interest), you'll all be complaining that all the books that are coming out at pulp trash, and you'll have nobody but yourself to blame as the sustainability of the author job will have bottomed out.[/QUOTE]
The is complete nonsense. You can already buy books at $2 a pop...90% of which are pulp trash. But this hasn't stopped the vast majority of people from happily paying much more for professionally edited books from major publishers.
The effect of the proposed settlement will be to *increase* the attractiveness of the professionally edited books because it will decrease the price differential between the self published book and the professionally published book.
I.e., in situation A, the consumer can buy an indie book for $2 or a publisher book for $15. In situation B, the consumer can buy an indie book for $2 or a publisher book for $10. Obviously, more consumers are going to buy publisher books for $10, which is better for the authors, since they are paid the same amount regardless of whether the book retails at $10 or at $15.
Likewise, the publishers get the same wholesale price from the retailer, regardless of whether the retailer sells above his cost or below it.[/QUOTE]
The grocery industry is not a great comparison mostly because no single chain has a great majority of the market force, nor do they consistently use a single industry to benefit the rest of the goods. For instance, were Giant to always use oranges as their loss leader, do you not think the perception of orange pricing would be devalued? If oranges are always at $0.05 each at Giant, people will eventually come to expect oranges to cost that much and blame other chains for jacking up prices. This could very well lead to other chains either stopping the sale of oranges or of the grocery industry as a whole demanding cheaper oranges from producers, which leads to crappier oranges for the consumers.
Additionally, perhaps you haven't heard, but a lot of people complain about the quality of cheap, devalued grocery foods, saying they aren't as tasty or healthy as they used to be. This decrease in quality eventually lead to a new market niche developing, and now people spend more money on supposedly better "organic" etc type foods. None of these are as good as direct from farmer goods, but that's also a necessary evil of a nationwide (or even global) distribution of fresh foods. Now we pay more for the same quality we used to have before competition drove down the prices in the name of homogenization (see the apple industry, and how a few high demand varieties like golden delicious have almost crushed other types and put the entire industry at risk should some form of disease develop). It is certainly arguable that we aren't better off paying less for less and paying more for the same, but as I stated, it's not a great comparison.
Back to Amazon, they are selling all books at a loss because they make more money on A) Kindle sales and B)locking in customers to their sales ecosystem. Consistently riding a single industry to your own benefit will inevitably detriment that industry in the long run. Now whether Amazon is doing this only looking for short term cash gains or more nefariously doing this also looking at long term taking-over-the-publishing-industry gains, it's not debatable that Amazon is using its market power for gain at someone else's expense.
People can talk all they want about how authors should self-publish, but that strategy is currently only articulated in an environment that co-exists with the publishers. In a world without publishers, all books get equal exposure and the ability to sift through crap is required. Someone will undoubtedly come in to fill that void, but it will not be for free. The inability of great authors to be selected from the multitudes by publishers (say what you want about publishers' selection process, but they do pick gems like David Foster Wallace) will certainly make it harder for these great authors to find an audience and thus continue writing, whereas there will be tons of idiot authors who will waste no time churning out crappy books, happy to sell it cheap. And that's where my worry comes from: not the inevitability, but what I see as the strong possibility of tons of cheap, crappy books.
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I'd argue that the proportion of crappy material produced might not change, the proportion of crappy material that the general populace is exposed to is vastly increased. It used to be that crappy books would die at a publishing house desk, passed on by some A&R (or whatever this is called in the publishing industry) who realized that it truly stunk. Now, crappy authors can turn to self-publishing to extol the virtues of their book, exposing it's crappiness to the masses.
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I'll also add that I'm not in favor of much of what the publishers do as well, but they aren't necessarily a bigger evil than Amazon. If only the publishers wouldn't skim so much profit from the sales channels and gave more to the authors, they'd definitely be the best option, but that's all hearts and rainbows thinking.
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How about letting the author set the prices. This is again just another old school business model that is unwilling to change with the times. This should work just like the App Store. Let the author, using iBooks Author create there own electronic version, or hire someone to transfer the document to that format. Put it in the Apple bookstore and the author gets to decide how much they want to make on each book and price it accordingly. Now I suspect there will be many who ask about marketing the book. Yes the system is setup to have the publisher do the marketing, but then again how many wonderful unpublished books are sitting on the rejected authors desk?
Whether it's apple, the publishers or amazon they ALL have their own interest at hand. No one is clean! My main concern is to be able to purchase affordable e-textbooks for my children in college. I'm pretty sure none of the players are worrying about MY kids education when they are pricing e-books, paperbacks or hard covers. I like amazon because it was the least expensive option when I did purchase textbooks and gave me the option to sell it back after I was done with it. Believe me i spent a good week searching for the best deals. Barnes & Nobles was just too expensive for ME. People who like to read trash will continue to read trash because that's their preference so I don't see how that's a problem. I personally can't stand to read a bad book so i will pay what I deem is an acceptable price for a good book but you can be sure that I'm going to shop around for the best price before I purchase said book.
You make some excellent points, but I have a few counter points.
Newspapers do not use an agency model nor do magazines. It is a wholesale model, and retailers are free to discount these items as they see fit, or run promotions with them. A retailer makes no money off these items. They are merely there as a convenience to their customers. Printed books are stamped with a retail price just as newspapers and magazines are.
Newspapers and the majority of magazines are ad based revenue streams. 7-11 is making a nickel on that newspaper. Periodicals' ad revenues are based upon circulation rate, and newspapers generally encourage newspaper promos to boost circulation rates because they can charge more for advertisements. (Like buy a coffee and get a paper for a quarter type stuff). You won't find a newspaper that makes money or even breaks even on the news stand price, and the same is true of most magazines. (And unlike books, the left overs are trash and a total loss.)
Anti-trust laws and contract laws walk a fine line... but, if one would sign a contract that is not legal, that contract is not binding.
If say Randome House alone chose to change their pricing structure, we most likely would not be seeing the legal action taking course. This is when a company could actually push back and threaten to pull their product and have some leverage. But when all the major publisher come together in unision...
...What we have is a charge of collusion. http://en.wikipedia.org/wiki/Collusion
In this situation, even with Amazon's buying power, they really didn't have a choice. They could either a. have the right to sell ebooks or b. have publishers pull all their titles from their store. They'd be left with a few small presses and indie books. If you look back to when this occurred, Amazon did attempt to fight back. They just had no real re-course. They even tried to test the waters with pricing and got spanked for it. (And they're probably the company most responsible for pushing to have the DOJ step in and examine the legality of this, not just consumer complaints.)
This same thing happened a few years back with LCD panel manufactures.
I will agree the waters can be murky when it comes to the free market and contract laws and anti-trust laws. This is where the DOJ is needed. The thing with contract law is that if a contract itself is circumventing a law, that contract is not legally binding. One couldn't have a clause that says, "your first born is collateral and will be my slave if you fail to pay your balance in full by the first of April." Yeah, that's a crazy statement for emphasis, but in this case if this is found to be collusion, all those agreements are non-binding and void.
In true communism, the government is setting rations and pricing and wages. These are just some of the foundational principles of communism, but it's also why in our country they are illegal. It goes against everything we stand for. If a store decided to charge $10 for a $1 loaf of bread, that's free enterprise. Consumers have the choice to shop elsewhere. If all the major break bakeries decide to inflate the cost of the bread and force every retailer to sell it for $10, that's black mail and collusion when the bakeries go that one step further and tell the retailers they can't even put that bread on sale or have coupons for it.
Where I think the publishers thought the legal risk was worth it, is that this isn't a traditional situation because we've never had a case like this with "virtual merchandise" before. That puts enough of a gray area out them to make the risk worth it because there is no precedent out there. Note they didn't even begin to attempt this with physical books... because they'd be fined so fast their heads would spin. They have great legal teams behind them. I'm sure they looked at all angles and found the risk worth while (more than doubling your profit on every item sold is a worthwhile risk), but not how at the first mention of legal intervention they instantly agreed to settle. Something they probably had a plan for from the day they rolled this model out.
It's probably way too late to worry about that. Even before publishing was "democratized" by the net, some publishing houses were always perfectly happy to satisfy the public's taste for trash by specializing in pulp novels and other materials of no particular artistic merit. Idealizing the past doesn't cut it either. It was far from ideal.
Speaking as a self-published print author, I would say that the most difficult part of going this route is editorial. Good editors are hard to find, and by this I mean people who read critically and carefully but without imposing their own style or voice on the author. The old-line publishing houses stocked these people like cordwood. Finding one on the outside of the system is not so easy.
This is blatant price fixing. I was sure it would not last long.
The price of an e-book naturally should be lower then a paper back ed. of the same title.
Also there needs to be a way to re-sell and loan e-books. Without that the value of an e-book is even lower.
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Your idea is already possible. Many authors self-publish. Apple allows this for music too. For a modest fee ANYONE can place their music into the iTunes music store. The trouble is attracting buyers to self published work. For example how would you know to search out my book or music.
The price of an e-book naturally should be lower then a paper back ed. of the same title.
Also there needs to be a way to re-sell and loan e-books. Without that the value of an e-book is even lower.
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Your idea is already possible. Many authors self-publish. Apple allows this for music too. For a modest fee ANYONE can place their music into the iTunes music store. The trouble is attracting buyers to self published work. For example how would you know to search out my book or music.
Big difference in content wanting to be free, and simply nobody wanting to pay for anything anymore.
Why do you say that? Whenever i search for anything MOST of the time amazon has it cheaper. They sell lots of stuff and I have never went to amazon and said to myself " That's too much for that particular item ".
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Of course it does. The author gets a percentage of that retail price. Numerous sources explain this. If competition forces Apple to match Amazon's prices (which they subsidize with Add revenue) then Apple's unsubsidized lower price (to match Amazon) will result in the publisher or author getting 70% of a lower retail value. If e-book prices are competitively driven down over time, the authors simply get less income as a result of a fixed percent of a lower retail price.
http://www.huffingtonpost.com/mark-coker/agency-ebook-prices_b_1387815.html
Let's think more of authors here, and less of publishers.
E-Books will make most publishers obsolete within ten years (except for the really high end ones who can bring high end skills to a project).
Authors can finance the production of an e-Book. They can only do this if they can sell it for more than a couple of dollars. Don't forget that while printing is no longer a cost factor, readers expect high production values from an e-Book like photos, videos, multi-media. This is expensive to produce.
"Cheap as Cheap Can" is a race to the bottom. A good earnings perspective will enable tens of thousands of authors to live off their books - not possible under the current publisher/print model, where authors basically are only getting crumbs of the proceedings, and many books get dumbed down by inept publishers.
Apple is right with its model and, like it does with the App store, will provide great income opportunities with its iBook store. A fruitful climate to produce great quality products that will bring great joy into the lives of the iBook store customers.
E-Books will make most publishers obsolete within ten years (except for the really high end ones who can bring high end skills to a project).
Authors can finance the production of an e-Book. They can only do this if they can sell it for more than a couple of dollars. Don't forget that while printing is no longer a cost factor, readers expect high production values from an e-Book like photos, videos, multi-media. This is expensive to produce.
"Cheap as Cheap Can" is a race to the bottom. A good earnings perspective will enable tens of thousands of authors to live off their books - not possible under the current publisher/print model, where authors basically are only getting crumbs of the proceedings, and many books get dumbed down by inept publishers.
Apple is right with its model and, like it does with the App store, will provide great income opportunities with its iBook store. A fruitful climate to produce great quality products that will bring great joy into the lives of the iBook store customers.
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The best advertisment are customer reviews, potentially amplified by the social networks. Good old word-of-mouth is always the best advertisment and with social networks it can become a huge drive for the sale of the book/song/movie of the moment.
That's why some authors actively encourage reviews for their work and Amazon had to take steps against fake or paid reviews.
Sometimes the price difference between Amazon Kindle and iBooks is pretty substansial. I only read on my iPad so it doesn't matter if I can put it on an actual Kindle. However, the actual iBooks app is definitely a lot better looking than the Kindle app. Sometimes, if the price difference is low or book isn't available at Amazon, I default to iBooks.