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Apple, publishers 'sued for price fixing'

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Re: Apple, publishers 'sued for price fixing'

#11

Post by healsdata »

nirvana wrote: post #5

As as side project I helped a friend publish a small book on Amazon for the Kindle. At the time we looked into doing the iBooks Store, but it was not yet open to self publishing. Apple's requirements for pricing were as follows: 1. You could set whatever price you wanted. (e.g.: Apple doesn't fix the price at anything specific) 2. If you sell the book electronically elsewhere, you cannot sell it on iBooks Store for m…

The allegations stem from the agency model that was forced on Amazon by the big six publishers when the iPad launched. Previous to that model, Amazon treated eBooks like they did everything else -- they'd buy them at a wholesale price and then sell them at whatever price they wanted. That included, to my understanding, selling them at a loss so they could sell more Kindle hardware.

Under the agency model, the publisher sets the retail price instead of the wholesale price. So Amazon now has to sell it at that price. This is probably different than the deal you got with Amazon since you don't have the leverage that the big six have.

The agency model also includes other stipulations to protect the traditional publishing model. One example is that many eBooks don't launch for several weeks after the hard cover books. My understanding from listening to Robb Wolf and Tim Ferris talk about their recent book launches is this helps the NY Times Best Seller rating in some way.

As a consumer, I use Amazon for their discounted prices. Recently when I wanted a book, I could pay $49.99 at the local B&N or $32.95 at Amazon plus $3.99 for one-day shipping. However, had I wanted to get the same book in digital format, my options were $39.99 at Amazon or $39.99 at Barnes & Noble.

Re: Apple, publishers 'sued for price fixing'

#12

Post by capnrefsmmat »

nirvana wrote: post #10
capnrefsmmat wrote: post #8

Earlier quoted context omitted.

The linked article has nothing to do with self-publishing and everything to do with books from large publishers: > The complaint claims that the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices and extinguished competition so that retailers such as Amazon could no longer offer lower prices for e-books. Amazon's discount specials also…

Self publishing is irrelevant to my point. The terms I mentioned are the terms both companies offered to everybody. Apple offered better terms, and specifically included in those terms that publishers couldn't jack up the prices compared to the price elsewhere. The only reason Amazon offered "lower prices" in the past is because they ran discount specials. Amazon also allowed publishers to set the price on the books,…

I don't follow. The price-fixing claim stems from publishers forcing Amazon to raise their prices by threatening to cut off Amazon's access to their books; it doesn't have to do with competition from the iBook Store. However, it alleges that Apple was complicit in forcing Amazon to raise prices, not through competition, but through threats.

Re: Apple, publishers 'sued for price fixing'

#13

Post by healsdata »

nirvana wrote: post #10
capnrefsmmat wrote: post #8

Earlier quoted context omitted.

The linked article has nothing to do with self-publishing and everything to do with books from large publishers: > The complaint claims that the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices and extinguished competition so that retailers such as Amazon could no longer offer lower prices for e-books. Amazon's discount specials also…

Self publishing is irrelevant to my point. The terms I mentioned are the terms both companies offered to everybody. Apple offered better terms, and specifically included in those terms that publishers couldn't jack up the prices compared to the price elsewhere. The only reason Amazon offered "lower prices" in the past is because they ran discount specials. Amazon also allowed publishers to set the price on the books,…

Self publishing isn't irrelevant to your point. I seriously doubt those terms you quoted from Amazon are the same terms the big six negotiated with them.

As wild speculation, I imagine the terms Amazon and Apple have with the big six are identical and that's where the charge of price collusion comes from: there's only six publishers than really count and no one can sell their eBooks at a lower rate now.

Re: Apple, publishers 'sued for price fixing'

#14

Post by acgourley »

capnrefsmmat wrote: post #9
NathanKP wrote: post #3

As much as I like Apple and ebooks, it sickens me that they want to charge more than $10 for best selling ebooks. It is an electronic file. I am willing to pay more than $10 for a physical paper book I can hold in my hand, but I can't see spending more than $2-$3 for an ebook. And so I rarely buy ebooks, even though I want to, because I can't see the economics behind doing so. If ebooks are going to be just expensive…

Printing cost of a paper book is only $3-4, so even eliminating the cost of printing, ebooks would still be expensive. I suspect most of the cost of books goes to marketing and promotion, not printing and binding. http://www.millcitypress.net/book-printing-costs.aspx

also make sure to factor in shipping, which amazon often must bake into the price slightly.

Re: Apple, publishers 'sued for price fixing'

#15

Post by healsdata »

nirvana wrote: post #7
NathanKP wrote: post #3

As much as I like Apple and ebooks, it sickens me that they want to charge more than $10 for best selling ebooks. It is an electronic file. I am willing to pay more than $10 for a physical paper book I can hold in my hand, but I can't see spending more than $2-$3 for an ebook. And so I rarely buy ebooks, even though I want to, because I can't see the economics behind doing so. If ebooks are going to be just expensive…

Apple would rather charge you $0.99 for every ebook. Just like they'd rather charge only $0.99 for a single, and $0.99 per TV show and $0.99 for a movie rental. Where they have enough pricing power, they are able to achieve this (they held the line on the $0.99 single for a long time.) Where they aren't they aren't. Unlike Amazon, Apple is not in the business of selling books. Apple is in the business of selling iPad…

Alternatively, publishers could just sell their ebooks to everyone at a wholesale cost and then not concern themselves with what the retailer sells it for. In this situation, if Amazon wanted to do deep discounts, that's on them. Isn't this how Amazon works in other areas?

According to this infographic (http://p.printingchoice.com/e-books-vs-real-books/) that wholesale price would be about $10 on average for both paper and ebooks and then the retailers could make decisions after that point.

Re: Apple, publishers 'sued for price fixing'

#16

Post by WoundedMarlin »

Edited - My comment earlier was worded poorly and did not come across as I was hoping.

The price fixing talk did not start with Amazon. It started because when Apple joined the market the publishers where not going to give them the same deal that Amazon had forced on them. So I think Apple wanting to get a piece of the market worked with the publishers and they all set the same pricing. Now it happened so quickly that people think they fixed the price which I agree they did. Instead of each one working with apple to come up with there own pricing.

This whole price fixing thing came about when Amazon had 95% of the market share and was able to dictate the prices, since they where the only ones selling e-books in large amounts. Now that apple is in the market along with other people Amazon share is at about 55% so they have lost that ability to control the market.

I do think Apple and the book companies came together to set a hire price and force Amazon to follow suit or risk not having all the books that Apple would have.

I do not understand why the books have to cost that much. I agree with NathanKP in that they are just files and the cost to the publisher is almost nothing at all. I know they are wanting to make a profit but I think when you charge more then a paper book something is wrong.

Go all e-books with a lot less paper books and call yourself the greenest in the business. I find that a lot of companies are scared of change and I am not sure why. I see change as a great thing that can propel the world in to new and better technology.

Re: Apple, publishers 'sued for price fixing'

#17

Post by StavrosK »

capnrefsmmat wrote: post #9
NathanKP wrote: post #3

As much as I like Apple and ebooks, it sickens me that they want to charge more than $10 for best selling ebooks. It is an electronic file. I am willing to pay more than $10 for a physical paper book I can hold in my hand, but I can't see spending more than $2-$3 for an ebook. And so I rarely buy ebooks, even though I want to, because I can't see the economics behind doing so. If ebooks are going to be just expensive…

Printing cost of a paper book is only $3-4, so even eliminating the cost of printing, ebooks would still be expensive. I suspect most of the cost of books goes to marketing and promotion, not printing and binding. http://www.millcitypress.net/book-printing-costs.aspx

Shipping, handling, etc isn't free, though.

Re: Apple, publishers 'sued for price fixing'

#18

Post by nirvana »

healsdata wrote: post #11
nirvana wrote: post #5

As as side project I helped a friend publish a small book on Amazon for the Kindle. At the time we looked into doing the iBooks Store, but it was not yet open to self publishing. Apple's requirements for pricing were as follows: 1. You could set whatever price you wanted. (e.g.: Apple doesn't fix the price at anything specific) 2. If you sell the book electronically elsewhere, you cannot sell it on iBooks Store for m…

The allegations stem from the agency model that was forced on Amazon by the big six publishers when the iPad launched. Previous to that model, Amazon treated eBooks like they did everything else -- they'd buy them at a wholesale price and then sell them at whatever price they wanted. That included, to my understanding, selling them at a loss so they could sell more Kindle hardware. Under the agency model, the publish…

How was the agency model forced on Amazon? Apple offered a better deal, and if I recall correctly, even before the iBooks Store had launched, Amazon changed their terms to offer the same deal. Amazon offered this same deal to everyone, including us. I'm not under a misunderstanding of what the deals are... I think you believed what you read in this press release and took it at face value.

A "model" cannot include "other stipulations". It is simply a broad description of an arrangement. There are many books that are not available for the Kindle or on iBooks, and it has been many years since they were published.

In short, the linked to article is FUD, Amazon chose to meet Apple's terms because they rightly recognized they were more competitive.

I agree, it is stupid that you can buy the physical book for less than the ebook. However, no matter how stupid it is, it isn't price fixing.

Re: Apple, publishers 'sued for price fixing'

#19

Post by nirvana »

healsdata wrote: post #13
nirvana wrote: post #10

Earlier quoted context omitted.

Self publishing is irrelevant to my point. The terms I mentioned are the terms both companies offered to everybody. Apple offered better terms, and specifically included in those terms that publishers couldn't jack up the prices compared to the price elsewhere. The only reason Amazon offered "lower prices" in the past is because they ran discount specials. Amazon also allowed publishers to set the price on the books,…

Self publishing isn't irrelevant to your point. I seriously doubt those terms you quoted from Amazon are the same terms the big six negotiated with them. As wild speculation, I imagine the terms Amazon and Apple have with the big six are identical and that's where the charge of price collusion comes from: there's only six publishers than really count and no one can sell their eBooks at a lower rate now.

Let me put your "doubt" to rest: https://kdp.amazon.com/self-publishing/help?topicId=A2MLJ06E...

The "%30 royalty" is Amazon's old model, the "%70 Royalty" is the Apple "Agency model".

When Apple announced the model, Amazon moved to offer the same model, and they offered it to everybody.

That we're self publishing is relevant only in the fact that we've actually published a book on Amazon and are relating the current situation, rather than making an argument based on "doubts". The purpose of this press release, by the way, is to sow such fear, uncertainty and doubt, and as you'll notice it has many assertions and little in the way of facts.

Re: Apple, publishers 'sued for price fixing'

#20

Post by nirvana »

capnrefsmmat wrote: post #12
nirvana wrote: post #10

Earlier quoted context omitted.

Self publishing is irrelevant to my point. The terms I mentioned are the terms both companies offered to everybody. Apple offered better terms, and specifically included in those terms that publishers couldn't jack up the prices compared to the price elsewhere. The only reason Amazon offered "lower prices" in the past is because they ran discount specials. Amazon also allowed publishers to set the price on the books,…

I don't follow. The price-fixing claim stems from publishers forcing Amazon to raise their prices by threatening to cut off Amazon's access to their books; it doesn't have to do with competition from the iBook Store. However, it alleges that Apple was complicit in forcing Amazon to raise prices, not through competition, but through threats.

Apple offered a better deal. That may be a competitive threat, but that is competition, not a threat of... violence? criminality? What are you implying?

Amazon was not forced to do anything, they chose to offer the same deal Apple does because they wanted to keep the business.

If Amazon only capitulated to this deal in order to keep the big six on board, why do they offer it to everybody, including small publishers?

https://kdp.amazon.com/self-publishing/help?topicId=A2MLJ06E...

That "%70 royalty" option is comparable to Apple's deal.

Also, why am I arguing with people who are not in a better grasp of the facts than I am, but who are instead repeating un-substantiated speculation and assertion?

I think you owe me some factual citations- namely, how Amazon was "forced" to do anything. Remember, choosing not to do business with someone is simply an expression of freedom of association. This is a recognized right in the USA. My ford dealership might want to sell toyotas, but toyota has the right not to sell me cars, "forcing" me to get them on the secondary market. So, when you say "force" you must mean a legal, or physical, rather than competitive threat, right? Because if it was simply the pressure from a competing deal that was better, well, Amazon voluntarily took that deal, they were not "forced" into it.

Please also show how apple did anything other than offer a better deal.

If you're going to make the allegation, shouldn't you have some evidence to cite?

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