U.S. Department of Justice Sues Apple and Publishers over E-Book Pricing

[KPOM]

They should be taking care of the lock ins on the ebook market as well.

If I want something from amazon I need a kindle.

False

Actually, technically this is true. Amazon makes Kindle available for Mac, Windows, Android, and iOS. Right now it's free, but who's to say that won't change?

That said, I don't think there is anything inherently wrong with selling content in a proprietary format.

 

[Leaping Tortois]

They should be taking care of the lock ins on the ebook market as well.

If I want something from amazon I need a kindle.

If I want something from apple I need a iOS device.

If I want something from barnes & noble I need a nook.

I don't need special glasses from different companies to read the print versions why should the ebooks be any different?

Now Im not totally against special formats for certain devices to take advantage of some special feature a certain ebook device provides but I think there should be a generic universal format. . . Like txt files are to microsoft word files.

For the moment the "Kindle" reader is available on just about everything. iOS, kindle, android, OSX, Windows, Linux. The issue would be if they start withdrawing availability.

 

[kbsbeme]

A publisher's perspective

I agree that eBook prices are too high. But consider this: before Apple's agency model, Amazon was paying publishers royalties as low as 30% of retail. Now they are a uniform 70%.

What i don't understand is why publishers don't cut out the distributor and sell their digital publications directly to the reader.

 

[lilo777]

There is something majorly wrong with this. The government should not be involved in controlling the business world like this. The constitution provides no instructions to do so.
RP 2012!

It's not the purpose of the constitution to provide instructions for everything that we do. Constitution does provide for a system of government that we have and in this case thes government is doing exactly what we elected it to do - to watch for our (the majority) interests and not for the interests of a few greedy bastards.

 

[KPOM]

Apples model is NOT better for content creators. It's better for the publishers, and what's good for them is generally not good for the authours. With the old model I could have published my ebook on amazon, they'd sell it for $10, take $2, and I'd keep $8. With this model, I'd be pressured into putting my book through a publisher, surrendering my rights to the content and then from the $10, Apple get's $3, Publisher get's $6.50, authour gets $0.50. Which sounds better for content creators?

In this day and age we'll see a dying out of "Publishers" in favour of "Editors" with more authours publishing solo.

Not necessarily. Amazon wouldn't necessarily pressure you to sell the book through a publisher. For instance, with textbooks, Apple lets authors submit them directly to the iBookstore. They even provide free software for writing the books.

 

[Small White Car]

In the iOS App Store, the publishers of software are setting the prices. They have cut out the middle man. OTOH, this seems to be great for consumers: there is tremendous competition in virtually all software categories, and prices are low.

Why does the App Store -- with its agency model -- work so well? What exactly is different about e-books?

You have the first part right: Apple's book store works just like their app store.

What the DOJ is concerned about is the 2nd part: Since books (unlike apps) can be sold anywhere, Apple apparently said "you set the price, but it can't be lower on some other site."

THAT's the difference and it's the real issue here. Whether it's true is apparently the first part, and then how much it matters is the 2nd part. I kind of think Apple should just ditch that if it alone is the problem. So what if the book is cheaper on xyz.com? A ton of people will still buy it from Apple because, come on, people are lazy and it's easier.

It's how iTunes succeeded over piracy despite piracy being free.

 

[Oletros]

vrDrew's post above mine explains it best. I believe that if Apple is blocked here we will soon see a world where Amazon sets the prices on all successful books.

No, he doesn't explain nothing about that, they're all fears but no facts

 

[Small White Car]

Apples model is NOT better for content creators. It's better for the publishers, and what's good for them is generally not good for the authours. With the old model I could have published my ebook on amazon, they'd sell it for $10, take $2, and I'd keep $8. With this model, I'd be pressured into putting my book through a publisher, surrendering my rights to the content and then from the $10, Apple get's $3, Publisher get's $6.50, authour gets $0.50. Which sounds better for content creators?

In this day and age we'll see a dying out of "Publishers" in favour of "Editors" with more authours publishing solo.

The publishers will die and Apple's store will welcome the authors with open arms.

Whenever you read "Apple's deal with the publishers" simply substitute "deal with the authors" and you're looking at the future. Talking about the publishers is irrelevant here.

No, he doesn't explain nothing about that, they're all fears but no facts

Well it's a fact that Amazon has spent a decade selling books at a loss and putting competitors out of business. You expect them to suddenly change? What will cause that? They've based their entire business around using books as a loss-leader. That's my point and I don't see why that would change for no reason.

 

[roasted]

It's amazing the hypocrisy Apple fanboys have.

If this were Amazon being investigated by the Dept of Justice, all the fanboys would be saying
GOOD, ebook prices too high, Amazon taking advantage of customers.

But because it's APPLE, the fanboys say
Terrible, Apple is the best with ebooks, this is WRONG!

Quoted. For. Truth.

 

[Drunken Master]

This whole issue is like the laptop debate: What's better...a bigger or a smaller screen? - A smaller screen is easier to carry, a bigger screen gives you more pixels. There's no 'right' answer there.

Likewise, Amazon's method gives lower prices but is worse for writers and Apple's method is better for content creators but leads to higher prices. *

What's the 'right' answer there? Much like with the laptop they both have equal pros and cons.

Exactly; people say they can get the same book on Amazon for $5 but I'll bet they're talking about a used copy of that book. Now, we've all bought a used book, movie or CD at some point, but if that's all we did then the original content creators would get less pay for their work. Somebody has to buy the original copy at the full price.

 

[EbookReader]

Digital Music: wholesale (Amazon selling a lot of best selling MP3 at $0.99 compare to $1.29 on Itunes....under agency pricing, this is forbidden because price has to be the same everywhere).

Digital Movie: wholesale (GooglePlay recently discounted movie rental to $0.25 for a limited time...Amazon price matched).

Digital Book: wholesale, then forced to go agency pricing, maybe back to wholesale now????



Wholesale is good for the customers because there will be competition.

For example, Apple, Amazon, Google buy ebooks wholesale at $8. They can price it at whatever they want.

$10 (for $2 profit)
$8 (break even)
$7 (for $1 loss .....loss leader strategy...selling best sellers at loss/break-even and make profit from other books/other items).


Apple has the money to compete. It just doesn't like low margin.

 

[guzhogi]

For the moment the "Kindle" reader is available on just about everything. iOS, kindle, android, OSX, Windows, Linux. The issue would be if they start withdrawing availability.

While that's true and it makes it easy to read things from Amazon, Amazon does not have an exhaustive list of books. In that case, you'd need another app for the book you go from another store. As some people have said, it would be nice to have a generic book format. Just something where you can read any book from any store in the same app. Maybe not have all the bells and whistles due to app specific features, but something for text and some pictures.

AS for the lawsuit, I'm kinda in the middle. I want the writers & publishers, but allow a good price for consumers. Also, I feel books shouldn't have different prices at different stores. Just my 2¢

 

[Mattie Num Nums]

Exactly; people say they can get the same book on Amazon for $5 but I'll bet they're talking about a used copy of that book. Now, we've all bought a used book, movie or CD at some point, but if that's all we did then the original content creators would get less pay for their work. Somebody has to buy the original copy at the full price.

Who cares! Its not the consumers responsibility to make sure content creators are making money. As long as its legal to buy and sell used items at a discount people will do that. Thats like saying buying used homes will kill construction because nobody will buy new ones. A market will always exist for new and used buyers.

 

[FloatingBones]

I can't believe how much ******** is in this post. Learn to use lose/loose proper PLEASE.

Collussion is better than struggling to stay in business? Collusion just like conspiracy is ILLEGAL. Price fixing is ILLEGAL.

But the Agency Model itself is not illegal (AFAICT). The onus would be on the government to prove collusion.

Did you have this same argument when the music industry was bitching about digital music? Were you willing to pay $16 for a digital album, the same price of a physical CD? The industry is CHANGING. The publishers need to ADAPT to the changing technology or they will die. It's the evolution of business! You're precious Apple and iTunes removed MANY MANY music businesses from the market. But that was OK right?

Apple made it far easier for customers to get music; the retail industry never responded. They did NOT do that through predatory pricing. And Apple actually provided a viable method for customers to get legal electronic downloads; one could make a strong argument that they actually saved the music industry. We now not only have iTunes, but we have several viable and competing e-music stores (including Amazon). Where would we be now unless Jobs had negotiated with the music publisher for the iTunes Store?

BTW: usage errors are fine in forum discussions. See the FAQ. Did you notice you said, "You're precious" rather than, "Your precious"?

To jusitfy collusion and price fixing is ridiculous.

But you agree that the Agency Model is OK, right?

 

[KPOM]

I think the larger issue for Apple isn't so much eBooks, but DOJ scrutiny in general. Let's face it. eBooks themselves aren't a big part of Apple's business. The stock price is seemingly unaffected by today's filing.

That said, is the DOJ going to start scrutinizing every one of Apple's contracts and deals, and if so, how is the company going to respond? The situation is arguably different from Microsoft's, as the latter actually did have 90% of a major market. Apple's largest share is about 75% of the shrinking music player market, and the next biggest is the tablet market at between 50-60%. However, Microsoft did a terrible job of dealing with their DOJ lawsuit, and had to deal with an independent monitor for several years afterward, which arguably hurt their competitiveness.

Potential concerns are their deals with iTunes, and how they handle approvals on the App Store. With the Mac at 5% market share, and iPhone at about 20% worldwide, I don't see them as immediate targets of the DOJ, but if the iPad stays above 50%, then who knows.

 

[dukebound85]

Thank you big brother.

I'm glad they don't waste time with time wasting issues such as collusion of gas prices at the pumps, and they deal with important things like book prices.

Evidence of collusion concerning gas prices?

 

[Oletros]

Well it's a fact that Amazon has spent a decade selling books at a loss and putting competitors out of business. You expect them to suddenly change? What will cause that? They've based their entire business around using books as a loss-leader. That's my point and I don't see why that would change for no reason.

And that has nothing to do with the claim that his mother won't set the price she wants.

 

[Boston007]

While that's true and it makes it easy to read things from Amazon, Amazon does not have an exhaustive list of books. In that case, you'd need another app for the book you go from another store. As some people have said, it would be nice to have a generic book format. Just something where you can read any book from any store in the same app. Maybe not have all the bells and whistles due to app specific features, but something for text and some pictures.

AS for the lawsuit, I'm kinda in the middle. I want the writers & publishers, but allow a good price for consumers. Also, I feel books shouldn't have different prices at different stores. Just my 2¢

You have obviously NEVER used Calibre. It will take a book in any digital format and convert it so you can read it on the Kindle for FREE

 

[i.mac]

Thank you big brother.

I'm glad they don't waste time with time wasting issues such as collusion of gas prices at the pumps, and they deal with important things like book prices.

Exactly so.

As the example given above, Gas prices go up because of 'speculation' of what may happen. When the speculation proves false or is gone altogether, gas prices remain the same or close to it. Meanwhile, oil companies get tax exemptions. This is not worth doing any thing about according to our oligarch friends in congress and wh ( looking at you buch old pal).

But hey, book prices is a menace to society, not like those soon to be $5 dollars a gallon in the us. no sir.

 

[EbookReader]

Before Apple became involved, Amazon was "dumping" ebooks at prices below cost to gain market share.

This is what "dumping" looks like in the steel market...

http://www.mcclatchydc.com/2009/12/30/81483/china-loses-steel-dumping-case.html

"In a unanimous decision, the three Democrats and three Republicans on the ITC determined that subsidized steel from China has damaged U.S. steelmakers. The Chinese steel, the panel determined, had been dumped — sold at artificially low prices to undercut fair competition."

What part of Amazon's action doesn't look like "dumping", i.e., subsidizing to undercut fair competition, e.g., Apple, Wal Mart, et al.

Selling 1-2 books out of 100 books at a loss isn't "dumping." It's a loss leader strategy.

Stores do it all the time in order to get customers inside the store.

discount milk, eggs, even movies (selling at a loss).

Look at MP3. Amazon sells it at $0.99 and Itunes sell it at $1.29 for the best sellers. Is it price dumping?

 

[benpatient]

That would be an Apples-to-Amazons comparison. Just FYI: e-book sales is a minuscule part of Apple's business. Apple's iTunes Store sales is only 4% of their gross revenue. iTunes Store sales includes music, iOS App Store sales, Mac App Store sales, and e-Books. It's safe to say that e-Book sales is far less than 1% of Apple's total sales. Compare to Amazon: retail sales is essentially 100% of their business and e-book sales is a healthy chunk of that.

I would be extremely surprised if ebooks made up more than 5% of amazon's gross revenue. I don't think you completely grasp the vastness of their business ventures. These days, it seems like half the world's popular websites are run on their web services platform. Most of their money comes from being the storefront for 3rd party products.

 

[Boston007]

I can't believe how much ******** is in this post. Learn to use lose/loose proper PLEASE.



But the Agency Model itself is not illegal (AFAICT). The onus would be on the government to prove collusion.



Apple made it far easier for customers to get music; the retail industry never responded. They did NOT do that through predatory pricing. And Apple actually provided a viable method for customers to get legal electronic downloads; one could make a strong argument that they actually saved the music industry. We now not only have iTunes, but we have several viable and competing e-music stores (including Amazon). Where would we be now unless Jobs had negotiated with the music publisher for the iTunes Store?

BTW: usage errors are fine in forum discussions. See the FAQ. Did you notice you said, "You're precious" rather than, "Your precious"?


But you agree that the Agency Model is OK, right?

I noticed it after I hit send, I rushed that post LOL! Sorry!

 

[Mattie Num Nums]

Exactly so.

As the example given above, Gas prices go up because of 'speculation' of what may happen. When the speculation proves false or is gone altogether, gas prices remain the same or close to it. Meanwhile, oil companies get tax exemptions. This is not worth doing any thing about according to our oligarch friends in congress and wh ( looking at you buch old pal).

But hey, book prices is a menace to society, not like those soon to be $5 dollars a gallon in the us. no sir.

Oil won't last forever and the entire infrastructure and health of our citizens and economy rely on it. Thats why speculation drives prices.

 

[i.mac]

Evidence of collusion concerning gas prices?

Big oil tax exemption, and gas prices never go back down when 'oil threat' is gone? Not an example?

 

[EbookReader]

Oh please, independents will do better without publishers. Publishers screw authors. Authors have put up with it until now because authors can't afford their own printing presses. Now that authors are free to sell their material directly to readers via Amazon or Apple, they're making vastly more money.

Source? My mother has been an author for over twenty years. Up until two or three years ago, she was bringing in ~$10K/year. It was nice, but obviously not enough to support the family alone. My dad was bringing in ~100K/year; he was the one supporting the family. Then my mom started selling on Amazon. Now she makes ~$100K/year, as well. And then my dad got laid off. Were it not for Amazon's support for independent authors, our family would have been screwed. As it is, we can make it through with a little less while dad searches for a new job.

Is she one of these 120 authors who sold more than 50,000 self-published ebooks?

http://selfpublishingsuccessstories.blogspot.com/