I'm sure if Apple and other publishers had deep enough pockets and were very generous to certain individuals this ordeal would have never come to see the light of day.
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U.S. Department of Justice Sues Apple and Publishers over E-Book Pricing
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I'm sure if Apple and other publishers had deep enough pockets and were very generous to certain individuals this ordeal would have never come to see the light of day.
http://www.pcmag.com/article2/0,2817,2402886,00.asp
If you bought ebook, you could see some of that $51 million back (from Hachette and HarperCollins).
This amount will rise when the other publishers also settle.
Assume $25 mil from each publishers. 5 publishers = $250 million in restitution.
If you bought ebook, you could see some of that $51 million back (from Hachette and HarperCollins).
This amount will rise when the other publishers also settle.
Assume $25 mil from each publishers. 5 publishers = $250 million in restitution.
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And ebooks prices for some titles (most likely the new releases) will come down, at least at Amazon, now that they can offer discount.
“Reaction from Amazon was also swift. Drew Herdener, a spokesperson for the e-tailer, called the DoJ’s decisions “a big win for Kindle owners,” adding “and we look forward to being allowed to lower prices on more Kindle books.””
Which mean, Google Play will follow suit.
And Barnes and Nobles.
“Reaction from Amazon was also swift. Drew Herdener, a spokesperson for the e-tailer, called the DoJ’s decisions “a big win for Kindle owners,” adding “and we look forward to being allowed to lower prices on more Kindle books.””
Which mean, Google Play will follow suit.
And Barnes and Nobles.
Holder is Grandstanding again
Eric Holder is looking for TV time, and he has achieved that.
The agency model is one that has worked many times in the past and has a history competitiveness for the agencies.
The MFN status is relatively new, within the past 20 years, and is being used by many corporations. On the surface this seems to offer best prices to the consumer, but not completely sure.
If others like Amazon want to do business with another model, that is entirely up to them.
In the end, it will be the consumer choices that determine what works best, and I don't think E Holder will make the difference.
Eric Holder is looking for TV time, and he has achieved that.
The agency model is one that has worked many times in the past and has a history competitiveness for the agencies.
The MFN status is relatively new, within the past 20 years, and is being used by many corporations. On the surface this seems to offer best prices to the consumer, but not completely sure.
If others like Amazon want to do business with another model, that is entirely up to them.
In the end, it will be the consumer choices that determine what works best, and I don't think E Holder will make the difference.
Make sure you at least blame the correct part of the chain. Many gas stations are franchised, and the margins at the pump aren't actually that high.
The article mentions that Apple's contracts say they can't sell it for less elsewhere. That seems to be the crux of their price fixing argument, although I'm just reading the article like you, not the entire case.
The article suggests Apple made this essentially impossible. I don't blame the publishers for not wanting to see their product devalued by being sold as loss leaders, although I don't know how often that was the case. I'd expect ebook pricing to be lower, but not really nothing. Obviously printing and page layout cost money, but putting something together that definitively works as an ebook takes effort too. The layout may have to be modified, and any artwork has to be managed a little differently. I can't think of all the logistics here. It's just that having both versions still in production does affect costs to a degree.
Yes they can, it is a business choice. Each business needs to determine what makes sense to them in the long run........
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I agree that eBook distribution should have a lower cost than "hardback".
At the end of the day it is what the consumer's have they say and what they will pay for content and convenience. And the choices the author/publisher has to maximize their payback.
Yes, but this is not what have you said before. Tehy're not accused for offering an agency model
5 of the 6 biggest publishers told Amazon in a space of a few days.
1) Switch to agency or
2) We won't give you any books to sell
If 1 publisher do that, that's fine. But all 5 and at the same time? There must be some coordination going on.
And the DOJ has the emails and communications to prove that was exactly what happened. When the major players in an industry got together and decide to raise prices, it's called price-fixing.
Here's an email that the DOJ gotten:
http://blogs.wsj.com/law/2012/04/11...awsuit-against-apple-publishers/?mod=yahoo_hs
As one Publisher Defendant executive acknowledged Amazon’s bargaining strength, “we’ve always known that unless other publishers follow us, there’s no chance ofsuccess in getting Amazon to change its pricing practices.” In the same email, the executive wrote, “without a critical mass behind us Amazon won’t ‘negotiate,’ so we need to be more confident of how our fellow publishers will react….”
Two of these big publishers agreed to pay restitution.
someone wrote this in another forum:
The accusation is based on this allegation (in a nutshell): No individual publisher had the nerve to approach Amazon and demand a different pricing system. Without some form of cooperation by those publishers to impose an agreement on Amazon, Apple had no chance of getting the MFN clause. Thus, the accusation is that Apple became the mediator or hub in a conspiracy to have five of the world's six largest publishers collude to threaten Amazon with terms that would be crippling to Amazon's business if Amazon refused to accept agency pricing.
If someone want to read the whole DOJ lawsuit, go here
http://assets.sbnation.com/assets/1053857/e-books_complaint.pdf
The Verge has summarized the key parts here
http://www.theverge.com/2012/4/11/2...k-price-fixing-case-against-apple-an-analysis
Basically, Apple doesn't like low margin (especially in the competitive ebook market). Amazon Kindle Store according to the DOJ has always been profitable. A book or two (out of hundreds) were sold at a loss, but customers also bought other profitable books. Loss $1 on a book but gain $3 on other books = profits. That's how a loss leader works for retail store. Put a popular DVD on sale (at a loss), get customers into the store, while there, many might buy "profitable" DVDs too. Retail stores have done this for decades.
The accusation is based on this allegation (in a nutshell): No individual publisher had the nerve to approach Amazon and demand a different pricing system. Without some form of cooperation by those publishers to impose an agreement on Amazon, Apple had no chance of getting the MFN clause. Thus, the accusation is that Apple became the mediator or hub in a conspiracy to have five of the world's six largest publishers collude to threaten Amazon with terms that would be crippling to Amazon's business if Amazon refused to accept agency pricing.
If someone want to read the whole DOJ lawsuit, go here
http://assets.sbnation.com/assets/1053857/e-books_complaint.pdf
The Verge has summarized the key parts here
http://www.theverge.com/2012/4/11/2...k-price-fixing-case-against-apple-an-analysis
Basically, Apple doesn't like low margin (especially in the competitive ebook market). Amazon Kindle Store according to the DOJ has always been profitable. A book or two (out of hundreds) were sold at a loss, but customers also bought other profitable books. Loss $1 on a book but gain $3 on other books = profits. That's how a loss leader works for retail store. Put a popular DVD on sale (at a loss), get customers into the store, while there, many might buy "profitable" DVDs too. Retail stores have done this for decades.
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here's why 5 of the 6 big publishers team up and colluded:
http://assets.sbnation.com/assets/1053857/e-books_complaint.pdf
36. Each Publisher Defendant also recognized that it would lose sales if retail prices increased for only its e-books while the other Publisher Defendants' e-books remained competitively priced. In addition, higher prices for just one publisher's e-books would not change consumer perceptions enough to slow the erosion of consumer-perceived value of books that all the Publisher Defendants feared would result from Amazon's $9.99 pricing policy.
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If 1 publisher selling popular books at $14.99 (through agency) while the other 5 is selling popular books at $9.99 (wholesale).....
but if all of them are now selling at $14.99 (through agency), problem solve. Customers will have to deal with the new reality of more expensive ebooks.
http://assets.sbnation.com/assets/1053857/e-books_complaint.pdf
36. Each Publisher Defendant also recognized that it would lose sales if retail prices increased for only its e-books while the other Publisher Defendants' e-books remained competitively priced. In addition, higher prices for just one publisher's e-books would not change consumer perceptions enough to slow the erosion of consumer-perceived value of books that all the Publisher Defendants feared would result from Amazon's $9.99 pricing policy.
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If 1 publisher selling popular books at $14.99 (through agency) while the other 5 is selling popular books at $9.99 (wholesale).....
but if all of them are now selling at $14.99 (through agency), problem solve. Customers will have to deal with the new reality of more expensive ebooks.
http://assets.sbnation.com/assets/1053857/e-books_complaint.pdf
DOJ:
His words were prophetic. A few months later, ebook price for popular titles increased to $14.99
DOJ:
His words were prophetic. A few months later, ebook price for popular titles increased to $14.99
buy who?
I highly recommend everyone to take 10 minutes and read the lawsuit. At the very least, it would give details of Apple executives internal emails.
http://assets.sbnation.com/assets/1053857/e-books_complaint.pdf
92.
Prior to the Defendants' conspiracy, consumers benefited from price competition that led to $9.99 prices for newly released and bestselling e-books. Almost immediately after Apple launched its iBookstore in April 2010 and the Publisher Defendants imposed agency model pricing on all retailers, the Publisher 30Defendants' e-book prices for most newly released and bestselling e-books rose to either $12.99 or $14.99.
93. Now that the Publisher Defendants control the retail prices of e-books but Amazon maintains control ofits print book retail prices - Publisher Defendants' e-book prices sometimes are higher than Amazon's prices for print ve r s ions ofthe s ame t i t l e s .
Yeah and now all the states are jumping on board and getting ready to sue Apple as well. Must be nice to have tons of money and don't know what to do with it except exploit the consumer. great business model if you ask me.
And taking one quote, out of context, tells you all you need to know, right?
Whatever profits Apple made on its iBookstore were, in the big scheme of things, a rounding error for them.
But more importantly in total the amount that e-book buyers paid because of this alleged collusion was piddling. And lets be totally honest and say that 90% of the people commenting in this thread probably haven't bought an e-book from either Apple or Amazon in the last year.
For most book readers, the difference between paying $9.99 and $12 or $14 is all but irrelevant. Because, when it comes to one's consumption of books, price is rarely the limiting factor. Time is: you've only got so many hours in your week to devote to reading.
Look at this way: Even when the marginal price of reading material goes to zero, consumption doesn't go up that much. There is a whole catalog of public-domain material available for instant download for free. Then there are public libraries in every town and city. You can read Crime and Punishment and The Adventures of Huckleberry Finn for free, gratis, and for nothing. And people are whining about paying an extra couple of bucks for A Million Little Pieces?
The DoJ has made a (IMHO) overly simplistic case regarding collusion here. They seem to have overlooked the far larger economic and technological issues brought about by devices such as the iPad and the Kindle.
Steve Jobs was no saint. But he had an almost unique ability to recognize not just the technological forces that would shape the world - but the business and social ones too. He recognized that digital music files would inevitably alter the way music was acquired, and through his creation of the iTunes store gave the music industry a lifeline. People were going to get their music over the internet, and Jobs figured it was better to sell them it at a price that made stealing it more trouble than it was worth.
So too with the book business. Jobs recognized that e-books would essentially cannibalize the hardcover book business - essentially the "cash cow" that lets publishers do all the expensive stuff (like editing, proofreading, curation, marketing, book tours, etc.) that gives us the rich reading options we currently enjoy. And that, once Amazon established itself as a monopoly in the e-book business, that they would inexorably use that power in ways consumers would come to regret.
So far we've seen only the Government's side of the case. No doubt Apple's lawyers, as wells as those of Penguin and MacMillan, have a different take on things.
But to all those people celebrating this case: Be careful what you wish for, you just might get it.
yeah a company that can play by the rules instead of forcing prices on us like the music industry. Fair enough.
The thing you need to keep in mind is this: When the game changes, the old rules don't necessarily make sense any more.
And e-books represent a fundamental "game change" in the publishing industry. In the old business of printed paper, the "wholesale" model makes sense. Wal-Mart or Barnes & Noble commit to buying hardcover bestsellers by the pallet-load. They bear the costs of warehousing them, and shipping them, and making shelf space for them. The publisher knows, when it gets the purchase order, how much money its going to make. And if a retailer decides to sell its inventory below cost as a loss leader, or simply to make extra space, the effects are limited.
But its fundamentally different with e-books. A price-cut at one retailer is instantly available everywhere. And so book retailing becomes a virtual "race to the bottom" - where everyone is forced to accept the margins of the craziest guy in the room. (Sort of the reverse of the mania thats presently ruining baseball - where every team has to pay salaries established by the Yankees and Red Sox, regardless of their own economic realities.)
If e-books were an economically vital good (like bread, milk, or electric power) it would be one thing for the Government to get involved. But they aren't. They are a luxury impulse purchase for affluent consumers. Quite literally the most privileged people in the world. And by filing this silly lawsuit, the DoJ is looking out for their interests, over those of the majority of consumers who still get their books the old fashioned way - at a bookstore or off the shelf at a discount store.
Got that sports fans? My question was "pointless," so he can ignore it. Translation: it does not comport with my radical, ideological views, therefore I can deal with the issue raised only by dismissing it. I had a feeling I knew where this was going, then he turned over the Henry Hazlitt card and was all in. For those who don't know, he was an Ayn Rand darling.
Anyhow, those who aren't wedded to extreme ideological positions and live in the world that actually exists, will know that Apple has walked into the proverbial hornet's nest. If we want to see the company succeed we'd better hope they will extract themselves from it without getting too badly stung. This is a battle that Apple cannot win; they best they can hope for is a draw. I'm guessing they are angling for a more favorable settlement than the other publishers got, because going to trial would be a disaster.
FWIW, the American Antitrust Institute has issued the following statement:
"The collusion of competitors to impose a business model on a retailer would be an unacceptable form of price-fixing," said Bert Foer, president of the American Antitrust Institute, commenting on the Department of Justice's filing today of an antitrust lawsuit against Apple and five of the nation's largest publishers who allegedly conspired to limit competition for the pricing of e-books.
"The practical result of a failure to prosecute this case would be to acquiesce in this sceme to increase the price of e-books. Even though the agency model sought by Apple and the publishers may not in itself be illegal or unethical, to allow manufacturers to collude in the manner alleged would be to undermine the consumer's best protection against the evils of monopolies and cartels," said Foer.
About American Antitrust Institute
The American Antitrust Institute is an independent Washington-based non-profit education, research, and advocacy organization. Our mission is to increase the role of competition, assure that competition works in the interests of consumers, and challenge abuses of concentrated economic power in the American and world economy. Our list of contributors is available upon request to aai@antitrustinstitute.org.
MEDIA CONTACT:
AAI Director Robert H. Lande
rlande@antitrustinstitute.org
"The collusion of competitors to impose a business model on a retailer would be an unacceptable form of price-fixing," said Bert Foer, president of the American Antitrust Institute, commenting on the Department of Justice's filing today of an antitrust lawsuit against Apple and five of the nation's largest publishers who allegedly conspired to limit competition for the pricing of e-books.
"The practical result of a failure to prosecute this case would be to acquiesce in this sceme to increase the price of e-books. Even though the agency model sought by Apple and the publishers may not in itself be illegal or unethical, to allow manufacturers to collude in the manner alleged would be to undermine the consumer's best protection against the evils of monopolies and cartels," said Foer.
About American Antitrust Institute
The American Antitrust Institute is an independent Washington-based non-profit education, research, and advocacy organization. Our mission is to increase the role of competition, assure that competition works in the interests of consumers, and challenge abuses of concentrated economic power in the American and world economy. Our list of contributors is available upon request to aai@antitrustinstitute.org.
MEDIA CONTACT:
AAI Director Robert H. Lande
rlande@antitrustinstitute.org
Agreed. I don't know if the solution though is to allow Apple and publishers to collude though rather than find a way to keep Amazon from using Walmart like tactics to get a monopoly and either raise prices once they have no competition or honestly, worse, have it so that publishers don't bother with an author unless they write to a proven blockbuster formula, basically making it so the only books offered follow a set formula (or whatever fad is of the time to write about, kinda like how we see with movies today. You already see a little of it in books, but you still can find other stuff other than the blockbusters if you want something different). Because if they can't make much on the books, they'll have to sell more. To sell more, they have to keep to a formula they know will appeal to the masses... anyone who can't write a book to that formula is too much of a risk to spend the money to not get enough return back on the book.
Honestly, I'd rather pay higher prices honestly for my book (and I'm poor) rather than end up with a book industry that's in the same situation as the movie industry, where creativity is stifled cause it won't get enough "viewers" to make enough profit or to break even.
I think the problem with Amazon isn't just undercutting prices but also how they want to treat small time authors. It's not so cut and dry. And I don't think either company (Apple or Amazon) are saints here. It just seems Apple's thing is only affecting one thing, price, where what Amazon wants to do eventually will affect our choice of new books we have to choose from.