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Amazon Flexes Its Muscles in Fight Against Publishers

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Re: Amazon Flexes Its Muscles in Fight Against Publishers

#71

Earlier quoted context omitted.

There are markets with no real viable alternative to Walmart, because Walmart used their scale to crush competition, and no has made it uneconomical to start a rival business, since they'll temporarily lower prices below sustainable (using their scale), then raise them again when the other store dies. If Walmart has enough local monopolies, this is a self-reinforcing strategy, since it's unlikely all of the monopolie…

So the thing about a monopoly is it's totally squishy. There isn't a clear line you cross to become one because there is no clean way to define a market. Every customer places a different value on the product itself, the search and transportation cost of buying from alternative retailers, etc. So take Walmart. Do they have a local monopoly? First, question, on what? If you want to buy a television then they almost ce…

I think there's a second element to why a gallon of milk isn't $20: Walmart relies on not upsetting too many people, who collectively wield enough local political power to harm Walmart locally.

It would only take a local wage initiative, for instance, to likely bother the closest Walmart. So there's an inherent incentive not to let prices rise so much that people are angry enough to get the government involved because they can no longer buy milk (or food).

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#72

Earlier quoted context omitted.

> Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price No, the claim is that they are doing that selectively , along with other things like directing people searching for a book to other publishers books, and extending the shipping time for the targeted publisher's physical books -- as means of discouraging purchases of the targeted publisher's physical…

Right. Is there something specifically wrong with that sort of leveraging? Businesses in the online and physical world negotiate all sorts of things selectively for their own benefit. Amazon doesn't give every publisher the same deal just like I'm sure publishers don't give every author the same deal. There are multiple ways to get books published and multiple ways to sell them. Amazon is big, and as one of the linke…

Exactly. Look at big box retailers -- Target and Walmart all give preferential treatment to manufacturers willing to sell at a discount or give special benefits to the retailer.

Better shelf placement, positioning near the front of the store, checkout placement ... All assets that retailers can exploit to woo vendors. Amazon is doing the same thing. Their assets are less tangible but offer just the same incentive to cooperate and play by their rules.

If you don't, you get pushed to the back of the store, placement out of eye level, etc.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#73

Earlier quoted context omitted.

> Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price No, the claim is that they are doing that selectively , along with other things like directing people searching for a book to other publishers books, and extending the shipping time for the targeted publisher's physical books -- as means of discouraging purchases of the targeted publisher's physical…

Right. Is there something specifically wrong with that sort of leveraging? Businesses in the online and physical world negotiate all sorts of things selectively for their own benefit. Amazon doesn't give every publisher the same deal just like I'm sure publishers don't give every author the same deal. There are multiple ways to get books published and multiple ways to sell them. Amazon is big, and as one of the linke…

> I'm not seeing is how Amazon becomes the villain here.

The articles don't go into detail, but from what I've seen of the relationship between Amazon and the publishers, I'm inclined to think that Amazon is probably trying to push for very unreasonable terms. Which is to say, Amazon is used to pretty much dictating whatever terms they want to the publishers, because they are in such a dominant position, and I expect that this is just more of the same.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#74

Earlier quoted context omitted.

> Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price No, the claim is that they are doing that selectively , along with other things like directing people searching for a book to other publishers books, and extending the shipping time for the targeted publisher's physical books -- as means of discouraging purchases of the targeted publisher's physical…

Right. Is there something specifically wrong with that sort of leveraging? Businesses in the online and physical world negotiate all sorts of things selectively for their own benefit. Amazon doesn't give every publisher the same deal just like I'm sure publishers don't give every author the same deal. There are multiple ways to get books published and multiple ways to sell them. Amazon is big, and as one of the linke…

What about Book-Seller-Neutrality? Shouldn't bookshops just be conduits for dead tree and electronic bits?

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#75

Earlier quoted context omitted.

Can we stop with the mindless idea that the point of capitalism is only to drive down the price for consumers. The point is to provide an equilibrium between suppliers and customers. The difference between 12.99 and 9.99 doesn't hurt consumers and provides significant difference in paying authors. Amazon is unfairly trying to kill the suppliers for short term gains at the expense of the industry.

I don't agree with this. I think that a 30% price difference is significant. In the current market, I think that publishers get far too large a fraction of the revenue and authors far too small. If the author creates the content and promotes the content (with the help of Amazon) what value is the publisher adding? Copyediting? Legitimacy stamp?

A better deal from Amazon than individual authors could get on their own.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#76

Earlier quoted context omitted.

> Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price No, the claim is that they are doing that selectively , along with other things like directing people searching for a book to other publishers books, and extending the shipping time for the targeted publisher's physical books -- as means of discouraging purchases of the targeted publisher's physical…

Right. Is there something specifically wrong with that sort of leveraging? Businesses in the online and physical world negotiate all sorts of things selectively for their own benefit. Amazon doesn't give every publisher the same deal just like I'm sure publishers don't give every author the same deal. There are multiple ways to get books published and multiple ways to sell them. Amazon is big, and as one of the linke…

It's only a problem if you have a market controlling position. The bigger Amazon's market share, the more responsibility they have to behave neutrally as the primary conduit between their suppliers and their customers. If there were a dozen other viable options for buying books online who all had similar market power and thus similar price-setting power, then Amazon could behave as bone-headedly as they wanted to.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#77
I have started two publishing companies over the last two years. What I can say on the economics of print is that the margins are not good compared to ebooks. What this article misses is the fight is not really between publishers and Amazon, but between printers and Amazon. Printers and their distribution system are getting squeezed.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#78
post #74

Earlier quoted context omitted.

Right. Is there something specifically wrong with that sort of leveraging? Businesses in the online and physical world negotiate all sorts of things selectively for their own benefit. Amazon doesn't give every publisher the same deal just like I'm sure publishers don't give every author the same deal. There are multiple ways to get books published and multiple ways to sell them. Amazon is big, and as one of the linke…

What about Book-Seller-Neutrality? Shouldn't bookshops just be conduits for dead tree and electronic bits?

Why? If I ran a hometown bookstore and was required to carry crap I knew wouldn't sell and that ate up valuable shelf space that would be bad for business. I'm not sure why amazon should be required to do something like this either. They are free to carry / not carry whatever they like, per the contracts they sign etc. There is no "everyone is equal" treatment, nor should there be.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#79

Honest questions here... What is supposed to happen here? This article and each of the others linked don't offer much beyond jabs at Amazon. As far as I can tell, publishers are unhappy with Amazon - period. Two years ago the hot news was about Amazon pricing books too low [1]. Now at least part of the complaint is that Amazon isn't discounting enough and allowing prices to approach list price - which I assume is set…

to be clear, the lawsuit was against apple and the publishers, who were accused of price fixing by refusing to participate in under-pricing books, but also refusing to price ebooks as high as ~$25.

it was a really odd application of antitrust law at the time, since Amazon is the one with monopoly power, and price fixing typically means competitors agreeing to price things higher than the market would otherwise bear.

antitrust has never been reasonably applied to tech, going as far back as DOJ going after microsoft for bundling IE, not for leveraging the Office team's relationship with the Windows team to push out competitors like Corel.

now you're seeing amazon flex that monopoly power - hey buddy, you had to pay a fine to the DOJ for refusing to participate in our monopoly, and we were able to hurt apple's book-selling business, and now we're shutting you off entirely unless you agree to our terms.

Re: Amazon Flexes Its Muscles in Fight Against Publishers

#80
post #57

Earlier quoted context omitted.

You don't need a monopoly to have enough power to push around your suppliers.

You have to have monopoly power to do so by the tactics at issue (limiting consumer availability and manipulating retail prices) since in a market with effective competition that does more to direct sales of the product to competing retailers than to hurt the total volume sold by the publisher.

You just need more loyal customers. My first stop is Amazon. But I would not say I am loyal to Amazon above all else. If I really wanted something and they didn't have it, then I'd move on the next stop. In this case (that book about Amazon) I'd head on over to Barnes & Noble and pay just $0.31 more to order it there. No big deal.
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