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Steve Jobs emails that show how to win a negotiation

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Re: Steve Jobs emails that show how to win a negotiation

#101

Post by comrade_ogilvy »

rkudeshi wrote: post #55
seldo wrote: post #7

My two big takeaways from this are: 1. Amazon sells every Kindle ebook at a loss of $3 -- they pay $13 wholesale and sell it for $9.99. I thought this was a typo, but then Jobs repeated the figure (though he said $12.50). It was my impression that Amazon also sells the Kindle itself at near-cost, so does that mean that Amazon's entire ebook business has been running at a loss the whole time? 2. Jobs certainly did win…

A little backstory to explain the $13 wholesale -> $9.99 retail thing: Books have traditionally been sold to wholesale at $14, then sold at retail for $28 MSRP. When Amazon started selling ebooks, they stuck with the same model - they were buying ebooks wholesale from the publishers at $14 each. However, they proceeded to sell them to consumers at $9.99. Yes, they were losing money on every sale. Why? Because they kn…

Thanks! That is helpful.

The bottom line is that Jobs knew that he was offering HC a fair deal. For HC to argue that they needed a bigger cut was based on smoke and mirrors. "Gee, if you want to make only the same amount of money you could just give the authors, um, more money, right?" That is an elegant way of calling a bluff.

Re: Steve Jobs emails that show how to win a negotiation

#103

Post by Tloewald »

jonknee wrote: post #42

> Analysts estimate that Amazon has sold more than one million Kindles in 18+ months (Amazon has never said). We will sell more of our new devices than all of the Kindles ever sold during the first few weeks they are on sale. If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution. Hindsight is a funny thing. Amazon's eBook/Kindle business is continuin…

Amazon had to match Apple's price model (or at least maintain a facade of doing so — in fact amazon's royalties only come close to matching Apple's for books under $10). It's hard to compete with someone who sells at a loss to grow market share with no apparent sustainable business model in mind. What's really odd is that Amazon's investors are perfectly happy with this.

Re: Steve Jobs emails that show how to win a negotiation

#104

Post by GalacticDomin8r »

jonknee wrote: post #68
fragsworth wrote: post #46

Earlier quoted context omitted.

So was Steve just making shit up? i.e., he won the negotiation because he was so full of shit that they didn't see any way to talk sense into him?

I guess you're right if by "winning" you mean signing a deal and then having a criminal investigation into his behavior. I'd wager that no one won (customers lost, the publishers didn't make any more money and now Apple is stuck in a legal battle that all the counter parties have paid their way out of).

Careful, Jobs-hero worship is still quite high.

Re: Steve Jobs emails that show how to win a negotiation

#105

Post by jplmelanson »

jonny_eh wrote: post #82
austenallred wrote: post #45

Earlier quoted context omitted.

Jobs could have set the price at whatever he wanted and they probably would have given in; Amazon was selling them for $9.99 and had already set the low bar, Jobs just had to pick his price and hold it. Classic negotiation says the other party will give in if he or she can so long as you hold your points as not for debate. Jobs did just that. Brilliant.

It all depends on either party's willingness to walk away. For Apple, books was just one small avenue for potential revenue, for the publishers it's their whole business. If Apple was missing a publisher on iBooks, they'd hardly care. If a book publisher can't get their authors' books on an iPad, those authors might go elsewhere.

> If Apple was missing a publisher on iBooks, they'd hardly care With 4 out of 6 major publisher in, maybe, but that would have been another game with only 1 or 2 in.

Re: Steve Jobs emails that show how to win a negotiation

#106

Post by mitchty »

meepmorp wrote: post #72
OrsenPike wrote: post #59

Earlier quoted context omitted.

I think a better way to phrase it would be "Kindles are clearly a superior device for reading [novels and similar material] than iPads." An iPad obviously is better for things like glossy magazines, graphic heavy books/PDFs, etc. However as a replacement to my "books" then the Kindle wins over the iPad. Also the Kindle Paperwhite (and Kobo Glo, etc) are pretty great for low light reading. I agree the old lights were…

> Kindles are clearly a superior device for reading [novels and similar material] than iPads. For you perhaps; I prefer reading on an iPad. It doesn't bother my eyes, and it doesn't make it difficult to sleep. Maybe the fact that I don't typically read outside makes some difference here.

Probably, I tried the other weekend to read a kindle book on my ipad outside.

Yeah not happening with sunlight at all. Not sure how the kindle works out there, but the glossy ipad might as well have been a mirror.

Re: Steve Jobs emails that show how to win a negotiation

#107

Post by ojiikun »

seldo wrote: post #7

My two big takeaways from this are: 1. Amazon sells every Kindle ebook at a loss of $3 -- they pay $13 wholesale and sell it for $9.99. I thought this was a typo, but then Jobs repeated the figure (though he said $12.50). It was my impression that Amazon also sells the Kindle itself at near-cost, so does that mean that Amazon's entire ebook business has been running at a loss the whole time? 2. Jobs certainly did win…

All I took away from this was that AAPL wanted to make about $0, AMZN wanted to make about -$3, and in both cases the author makes about $3, meaning that of the $13 wholesale, the publisher is getting a 75% cut of the sale.

I cannot fathom that the publisher performs any function possibly worth this much money. How, since we no longer have to ship dead trees, have we not evolved a system that gives authors 75% of the sale price?

Re: Steve Jobs emails that show how to win a negotiation

#108

Post by ScottBurson »

larrys wrote: post #88
ScottBurson wrote: post #75

Earlier quoted context omitted.

Very interesting post. For most of us, I'm sure writing such an email would take the kind of effort and consideration you describe. (It would probably take me a week.) But I wouldn't be surprised if Jobs spent so much of his time negotiating and was so talented at it that he could pretty much just dash something like that off -- with every detail right.

Side suggestion for you. You are using bountyoss.com for what you do, I strongly suggest you lock up both bountyboss.com and bountyos.com as well. (bountybos.com and bontyos.com might also be a good idea but the other two definitely.)

Thanks for the suggestion, but I don't think I understand. You really think those are likelier typos than, say, "buontyoss.com"? Where does one stop? (I do have "bounteoss.com".)

In any case, the site has had $0.00 in revenue to date. I don't think protecting variations on the domain name is my biggest problem :-)

Re: Steve Jobs emails that show how to win a negotiation

#109

Post by skeletonjelly »

meepmorp wrote: post #72
OrsenPike wrote: post #59

Earlier quoted context omitted.

I think a better way to phrase it would be "Kindles are clearly a superior device for reading [novels and similar material] than iPads." An iPad obviously is better for things like glossy magazines, graphic heavy books/PDFs, etc. However as a replacement to my "books" then the Kindle wins over the iPad. Also the Kindle Paperwhite (and Kobo Glo, etc) are pretty great for low light reading. I agree the old lights were…

> Kindles are clearly a superior device for reading [novels and similar material] than iPads. For you perhaps; I prefer reading on an iPad. It doesn't bother my eyes, and it doesn't make it difficult to sleep. Maybe the fact that I don't typically read outside makes some difference here.

Still, the difference is staggeringly: staring at a lightbulb vs a surface.

Re: Steve Jobs emails that show how to win a negotiation

#110

Post by Guvante »

ojiikun wrote: post #107
seldo wrote: post #7

My two big takeaways from this are: 1. Amazon sells every Kindle ebook at a loss of $3 -- they pay $13 wholesale and sell it for $9.99. I thought this was a typo, but then Jobs repeated the figure (though he said $12.50). It was my impression that Amazon also sells the Kindle itself at near-cost, so does that mean that Amazon's entire ebook business has been running at a loss the whole time? 2. Jobs certainly did win…

All I took away from this was that AAPL wanted to make about $0, AMZN wanted to make about -$3, and in both cases the author makes about $3, meaning that of the $13 wholesale, the publisher is getting a 75% cut of the sale. I cannot fathom that the publisher performs any function possibly worth this much money. How, since we no longer have to ship dead trees, have we not evolved a system that gives authors 75% of the…

Apple has always made 30%. They were the ones to start that model.

Publishers are actually about relationships, not dead trees. They can get your book to the customer, which is where the value is. From the consumer point, you only care about the producer, but the producer cares about the publisher a lot more than the customer.

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