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Judge Approves Settlement In eBook Price-Fixing Case

Soulskill posted about 2 years ago | from the but-we-love-paying-more-than-for-dead-tree-books dept.

Books 242

An anonymous reader writes "On Thursday a U.S. District Judge approved a settlement between the Department of Justice and three publishers accused to colluding to inflate ebook prices (order). 'The Justice Department had accused Apple and five publishers in April of illegally colluding on prices as part of an effort to fight internet retailer Amazon.com Inc's dominance of e-books. The publishers who agreed to settle are News Corp's HarperCollins Publishers Inc, CBS Corp's Simon & Schuster Inc and Lagardere SCA's Hachette Book Group. Apple; Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH; and Pearson Plc's Penguin Group have vowed to fight the Justice Department's lawsuit with a trial due to start on June 3 next year.' The decision came after a lengthy period of public comment. According to the AP, 'The ruling released Thursday cast aside the strident objections of Apple, other book publishers, book sellers and authors who argued the settlement will empower Internet retailing giant Amazon.com Inc. to destroy the "literary ecosystem" with rampant discounting that most competitors can't afford to match. Those worries were repeatedly raised in court filings about the settlement. More than 90 percent of the 868 public comments about the settlement opposed the agreement.'"

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below cost? (4, Insightful)

gl4ss (559668) | about 2 years ago | (#41259795)

how do you sell an ebook copy at "below cost"? that implies that amazon paid authors out of their own pocket? is this right?

(because, in the sw world.. amazon actually makes the author accept zero payment for the privilidge of amazon giving the sw away as promotion)

Re:below cost? (2, Informative)

CanHasDIY (1672858) | about 2 years ago | (#41259917)

Heard about this on NPR this morning, according to the report, Amazon buys a license to sell ebooks from the publisher, then proceeds to undercut the publisher by a fair amount.

Of course, the smart publisher would not sell a license to Amazon. Perhaps it's because my knowledge of the matter is admittedly incomplete, but I fail to see what leg these publishers have to stand on, considering.

Re:below cost? (0)

Anonymous Coward | about 2 years ago | (#41260141)

Of course, the smart publisher would not sell a license to Amazon.

Until their smart competitors do sell a license to Amazon who then smartly sell a whole bunch of ebooks to smart customers.

Re:below cost? (2)

NatasRevol (731260) | about 2 years ago | (#41260351)

Selling at a loss isn't smart.

Re:below cost? (2)

mcneely.mike (927221) | about 2 years ago | (#41260601)

Stores sell milk at a HUGE loss (about $2 a bag here in Canada), but then attempt to make up the loss by having you buy bread, eggs, cream, shampoo, Nix, etc.

Walmart used to move into a market and one competitor at a time, steal the market at their loss until the competition died. Sell shovels and dirt until the local hardware store closed, then jack the price. Sell clothing at a loss until the local clothing store closed: then jack the price. Selling at a loss was very smart for them (until they got Sherman's(?) anti competitive law shoved down their throat... but still, a very smart move that got them started to where they are today.

Re:below cost? (4, Insightful)

Beetle B. (516615) | about 2 years ago | (#41260637)

Of course, the smart publisher would not sell a license to Amazon. Perhaps it's because my knowledge of the matter is admittedly incomplete, but I fail to see what leg these publishers have to stand on, considering.

Your so-called smart publisher would not value his brains when he has to shut down as a result.

Amazon has a huge edge on ebook sales - ask any publisher how many of their ebooks are sold on Amazon vs all other venues combined.

People don't go for the best products on the market. Everyone I know other than myself bought a Kindle instead of better alternatives. Their argument always was: "Oh, your device may be better, but Amazon has the largest selection."

"OK, what ebooks do you want that can only be bought at Amazon?"

No answer. Because there aren't any. Sure Amazon really does have a larger selection, but no one I personally know wants any of the exclusively Amazon ebooks anyway.

But would a consumer do that analysis? No. Not even when it's pointed out to them before they buy.

Guess how many of these Kindle owners buy ebooks from anywhere other than Amazon?

0.

So yeah, a publisher can say, "Nah, we won't sell on Amazon" to which Jeff Bezos will throw some change their way saying "Here're some pennies for when you become homeless."

Re:below cost? (1)

DragonWriter (970822) | about 2 years ago | (#41260721)

Heard about this on NPR this morning, according to the report, Amazon buys a license to sell ebooks from the publisher, then proceeds to undercut the publisher by a fair amount.

Of course, the smart publisher would not sell a license to Amazon.

Actual publishers are smart enough that, if they would make more money not selling licenses to Amazon and instead selling through other outlets while shutting out Amazon, they would.

In the real world, what publishers did is sell to Amazon while trying to set up their own (independently and in collaboration) venues to sell e-books that would cut-out Amazon. There were a number of different such efforts that were hyped within the industry as the thing that would displace Amazon and restore full control of e-book retail to the publishing industry.

The failure of all those efforts is why the big publishers were willing to join together and sign on to a deal to try to swap Amazon's practical domination of the retail e-book market for Apple domination on terms slightly more favorable to the publishers.

Re:below cost? (1)

bitingduck (810730) | about 2 years ago | (#41261401)

There were a number of different such efforts that were hyped within the industry as the thing that would displace Amazon and restore full control of e-book retail to the publishing industry.

The failure of all those efforts is why the big publishers were willing to join together and sign on to a deal to try to swap Amazon's practical domination of the retail e-book market for Apple domination on terms slightly more favorable to the publishers.

I recently became a small publisher and my impression of the big publishers is that they have many of the of same problems as the music industry and haven't gotten to the point of being forced to give up on DRM yet.

Any competing effort that shuts out amazon from sales also cuts out access to the most popular ways for people to read ebooks unless you go DRM free. If you want to keep DRM, you can do adobe versions of things that are usable on some readers, but you don't have nearly the market as with kindle, and it's not nearly as convenient for readers. Amazon and B&N like DRM because it gives them device lock-in, so they're less likely to force things open like Apple did with music. Apple doesn't have the market share yet to do it, and you can get Kindle/Nook/kobo readers for iThings, which makes iThings very appealing for readers, and helps reduce Apple's incentive to try to force things open.

Re:below cost? (4, Informative)

hawguy (1600213) | about 2 years ago | (#41259923)

how do you sell an ebook copy at "below cost"? that implies that amazon paid authors out of their own pocket? is this right?

(because, in the sw world.. amazon actually makes the author accept zero payment for the privilidge of amazon giving the sw away as promotion)

The same way a grocery store can sell milk for $2/gallon when it really costs them $2.50/gallon.

They pay the distributor the full $2.50, then eat the extra 50 cents themselves as a cost of getting more people in the door.

http://en.wikipedia.org/wiki/Loss_leader [wikipedia.org]

Amazon can make up the difference on other products that the user may purchase from Amazon when they stop in to buy a book. Other retailers (like B&N and Apple) have a less diverse product catalog so if they take a loss on eBooks it's harder to make up the difference somewhere else.

Re:below cost? (1)

gl4ss (559668) | about 2 years ago | (#41260271)

well I do understand all about loss leader and all.
But if would be like that, then logically the publisher would just purchase mark up the books and make money out of amazon. it's not like they're physical goods anyways.

Re:below cost? (1)

AwesomeMcgee (2437070) | about 2 years ago | (#41260423)

Their marked up version is still competing with amazon, what- are they going to buy amazon's entire supply? I think amazon might decide not to sell them any of said product, moreover you have to assume this behavior is disallowed by way of the purchasing contract amazon holds with the publisher.

Re:below cost? (0)

Anonymous Coward | about 2 years ago | (#41260495)

It's not the same Loss leader than Dumping [wikipedia.org] that seems to be the case here.

Re:below cost? (1)

bitingduck (810730) | about 2 years ago | (#41261435)

And they typically only did it on a small part of the catalog- popular books to attract people, and then books further down the sales list would sell for a profit to make up for it.

Re:below cost? (0)

Anonymous Coward | about 2 years ago | (#41259935)

"that implies that amazon paid authors out of their own pocket? is this right?"

Yes.

Re:below cost? (1)

Githaron (2462596) | about 2 years ago | (#41260797)

Does Amazon buy "inventory", a unlimited license (within a time frame), a maximum number of copies license, or metered license? If they buy "inventory" or even metered license why would book publishers care if Amazon sell books at below market value in order to get customers to buy other products.

Re:below cost? (2)

MozeeToby (1163751) | about 2 years ago | (#41259949)

"Makes" is an interesting choice of words. SW creators are offered the chance to be the app of the day, sometimes they get a portion of their regular price, sometimes they don't. But they are never "made" to do anything. If they don't want to be the app of the day, all they have to do is say 'no thanks'.

Re:below cost? (3, Interesting)

sanosuke001 (640243) | about 2 years ago | (#41259955)

If Amazon is paying up-front to the author and/or publisher, why do the publishers even care? Set a price that you're happy with and let Amazon give them away. If they're allowing Amazon to give away without paying it's their own damn fault.

Now, I understand why Apple cares because if Amazon is willing to under-cut the wholesale book prices, Apple will end up with less business (though, they could just not allow a Kindle app on iOS and their herd of "customers" would have no choice). But the publishers are big enough to not let Amazon push them around; wtf?

Re:below cost? (4, Informative)

crmarvin42 (652893) | about 2 years ago | (#41260063)

They don't want to be beholden to a single distributor. If that happens, then Amazon can start more aggressively pushing the wholesale price down. The publishers will have no other retailer to go through, and will be forced to make those concessions to keep their wares listed in the largest (and in the minds of many e-shoppers, only) book seller.

To them, its' not about what they are getting paid today, but about what they are going to be getting paid 5, 10 or 15 years from now. They are resisting being pulled into an endless loop of lower retail prices leads to lower wholesale prices, which leads to lower retail prices and again to further reductions in wholesale prices, et infinitum. In that scenario they end up subsidizing Amazon's success in the long run in exchange for Amazon subsidizing their revenues in the short term.

But the publishers are big enough to not let Amazon push them around

Only if their is a relatively diverse pool of resellers to whom they can sell. The Agency model allowed them to stop Amazon's price spiral precisely because Amazon couldn't force everyone else out via agressive loss-leading. If they are forced to give up the agency model, then they will have little recourse to prevent the eventual bankruptcy of their business (from their perspective at least).

Re:below cost? (1)

sanosuke001 (640243) | about 2 years ago | (#41261353)

Still, the publishers NEVER have to lower their prices to Amazon. Amazon needs them as much as they need Amazon and if the publishers keep their wholesale prices constant, what can Amazon do to get them to lower them? It's not like someone else has the rights to sell specific books...

Re:below cost? (1)

bdam (1774922) | about 2 years ago | (#41260099)

Why do publishers care about this? I work for a publisher and Amazon has rapidly become our largest customer and is essentially a monopoly in online sales of physical books as well as e-books via the Kindle. Amazon is able to price their products below cost because they have other revenue streams to make up for it; our other customers do not. We would like to see our other customers survive and maintain some diversity in our customer base. If Amazon is allowed to dump their products that will certainly lead to furthering their monopoly. Are there laws and protections regarding dumping? Sure ... but I doubt they would be timely enough to help our already struggling retailers. You can certainly ridicule this as an outdated business model but the publisher's perspective is clear: if you allow Amazon to price their competition out of business via dumping they will, it will work, and the publishing ecosystem will suffer.

Re:below cost? (1)

Nocturnal Deviant (974688) | about 2 years ago | (#41260825)

so that makes it ok to price fix? Just because they are doing a better job at selling than your smaller customers(no offense to them, but fun fact, this is capitalism at work here), means your company wants to do something illegal and immoral to change that? you should either fix your moral compass...or leave your job at said publisher. Or become a lawyer, because if you can argue that price fixing is ok, then im sure apple's lawyers would love to have you.

Re:below cost? (1)

bdam (1774922) | about 2 years ago | (#41260931)

Quite right, price fixing is bad, although I'm not entirely convince that's what was going on here. At the very least, I work for a small publisher and if there was collusion going no one called us to get in on the deal. You are also correct, this is capitalism at work. In this case it will enable Amazon to dump product and kill competition. If you want to make the case that this is as it should be then so be it. As both a publisher and a consumer I would prefer to have choice in where I purchase my books.

Re:below cost? (4, Insightful)

jandrese (485) | about 2 years ago | (#41260005)

As I understand it, the books aren't actually "below cost", they're just below what the Publisher charges for their own version of the same ebooks. Amazon can't really afford to sell the books below cost because books are their primary business, especially on the Kindle. You can't make your biggest income source a loss leader for long. This sounds a lot like publishers going "mah profits!!!" because they thought they finally had a way to destroy the secondary market with ebooks and get everybody to pay retail again but then Amazon came along and wrecked their plans by selling below MSRP.

Re:below cost? (2)

bdam (1774922) | about 2 years ago | (#41260293)

I work for a publisher and I can attest that Amazon has indeed sold our books below what they pay us. Amazon can most certainly afford it and they only need to do so long as competitors exist. Book retailers are already struggling so it wouldn't take too long to knock out all but those that have other sources of revenue.

Re:below cost? (3, Insightful)

jkflying (2190798) | about 2 years ago | (#41260669)

Then why don't you just buy a whole bunch of your books from them? It would be like a direct cash transfer from Amazon's bank account into yours...

Re:below cost? (1)

demonlapin (527802) | about 2 years ago | (#41261043)

As if Amazon would allow the sale...

Re:below cost? (0)

Anonymous Coward | about 2 years ago | (#41260693)

They don't sell every book below cost. They staregicly sell certain popular books below cost, then sell other books at a profit.

The concept is that they get you to by "Fifty Shades of Grey" from them instead of anywhere else, which gets you seeing the "other people who bought this also bought" and "reconciliations for you" strips during checkout which gives them a chance to sell you other books at prices comparable to other re-sellers.

Re:below cost? (3, Insightful)

RenderSeven (938535) | about 2 years ago | (#41260009)

how do you sell an ebook copy at "below cost"

The problem is they are selling it below Apple's cost. According to Apple no one should be allowed to undercut Apple, and they have lawyers to prove it.

Re:below cost? (1)

Anonymous Coward | about 2 years ago | (#41260181)

how do you sell an ebook copy at "below cost"

The problem is they are selling it below Apple's cost. According to Apple no one should be allowed to undercut Apple, and they have lawyers to prove it.

It works the same the other way too. According to Amazon, no one should be allowed to undercut Amazon, and they have lawyers and contracts to prove it. You can't even have a sale on another site without offering Amazon the same sale pricing.

Re:below cost? (1)

CapuchinSeven (2266542) | about 2 years ago | (#41260661)

Only on Slashdot does this got modded up. Keep on living in your bubble while Amazon gets away with it.

Re:below cost? (1)

RenderSeven (938535) | about 2 years ago | (#41261059)

Im not sure it deserves to get modded to 5, it was admittedly a cheesy cheap shot. But I dont understand what you think Amazon is getting away with? They sold eBooks cheaper than regular books, and they bloody well should be cheaper. It worked out well for Amazon, worked out well for the consumers, worked out for the authors, and even for the publishers. Apple didnt like it because it undercut their business model but not being able to compete isnt a crime. What they did, effectively blackmailing publishers to enter into a price-fixing agreement, is very illegal and does not benefit consumers, not even Apple consumers. What 'bubble' is that living in?

Re:below cost? (0)

tlhIngan (30335) | about 2 years ago | (#41261325)

Im not sure it deserves to get modded to 5, it was admittedly a cheesy cheap shot. But I dont understand what you think Amazon is getting away with? They sold eBooks cheaper than regular books, and they bloody well should be cheaper. It worked out well for Amazon, worked out well for the consumers, worked out for the authors, and even for the publishers. Apple didnt like it because it undercut their business model but not being able to compete isnt a crime. What they did, effectively blackmailing publishers to enter into a price-fixing agreement, is very illegal and does not benefit consumers, not even Apple consumers. What 'bubble' is that living in?

It's called "competition".

Would you buy EVERY EBOOK from Amazon?

Because that's the way the world was headed - Amazon's discounting ebooks in an attempt to devalue them and lock people into the Kindle, basically being the only way to sell your ebook.

It's not a new business tactic - it's often used when a big guy wants to crush competition by selling products at a loss just long enough for competitors to close shop and not even try. And in the end, you get a monopoly.

It worked for Amazon - they have a lot of cash, a lot of books (the only competition at the time was Sony's store). So they have 90% of the ebook market.

It worked for consumers - yes, in the time Amazon was dumping product, consumers were paying low prices. But once all the competition leaves and everyone's stuck using Kindle store, why would Amazon continue offering low low low prices?

It worked for authors and publishers - yes, because they got paid full price. But once Amazon was the only game in town, Amazon can squeeze both ends of the spectrum - consumers get higher prices, authors and publishers get less (you think Apple's 30% cut is huge? Books routinely wholesale for 50% or less - it's how Amazon can sell books 30% off and still make money with free shipping).

All Apple did was see this, and offer a "better deal" like any new competitor. Except well, Apple's hard to drive out of business (though their iBookstore is laughable). Publishers rushed on in because they hated what Amazon was doing and ended up pressuring Amazon to stop dumping. About the only controversial part may be MFN clauses in the agreements, but those apparently are pretty standard throughout many agreements.

And hey, Amazon's still trying to lock everyone in - you think all those Amazon Prime benefits are purely because Amazon loves its customers?

And if you want to see what would've happened, I can say RIAA and MPAA.

In short, Amazon was heading towards ebook monopoly, and a competitor simply offered content producers a better deal because that's how you compete. (It's also a revenge move by Apple - Amazon did the same thing to Apple and its iTunes Music Store, too. Which resulted in DRM-free music across the board, at the expense of higher music prices on iTunes).

Re:below cost? (1)

Anonymous Coward | about 2 years ago | (#41260863)

In this instance, Apple's cost is the same as the publishers' cost. Under their contract, the publishers set the price on the iBookstore, not Apple. So, sorry to burst your anti-Apple bubble, but this is clearly a case where Apple isn't directly gouging anyone.

And if you think the iBookstore prices are expensive, wait until Amazon has crushed all other online book outlets under its heel and has a total monopoly. It'll stop selling books at a loss and Amazon won't be any cheaper than its previous competitors were. And you'll have no choice but to pay whatever price Amazon settles on.

Re:below cost? (1)

fredprado (2569351) | about 2 years ago | (#41261281)

It will never happen. They is piracy to control this and any other attempt to electronic monopoly. Amazon is not stupid. It is not wasting billions in sells in the hope of gaining an uncertain monopoly in the future which it will be unable to exploit.

Re:below cost? (0)

Anonymous Coward | about 2 years ago | (#41260657)

I know something on this topic since I work for one of those Publishers. The answer is, Yes, Amazon is selling at a loss in order to put the competition out of business. Then they will dominate the market as a monopoly. Very surprised that the DOJ thinks this is fine. The final ruling basically states that a retailer i.e. Amazon must sell at a net profit across a publishers entire catalog over a fiscal year. Therefore, they are certainly allowed to continue to sell any specific book at a loss and are allowed to continue their tactics to a degree. The price fixing that was done was put in place to protect retailer such as B&N from Amazons tactics.
Retailers do not pay authors, publishers do. Retailers pay the Publishers. Therefore, this ruling is forcing the Publishers to increase ebook prices, not decrease. Reason: it becomes that much more painful for Amazon to sell at a loss if the price of the book is higher.

Ultimately, the DOJ ruling may be motivated by the consumers interest to pay a lower price for ebooks. However, if Amazon were to establish a monopoly, I doubt it will not cost the consumers more in the long run.

Low margin high volume (2)

ZombieBraintrust (1685608) | about 2 years ago | (#41261391)

Yes, Amazon paid some authors out of thier own pocket. It also pays publishers directly as well. They purchased a book for $20 wholesale and sell it for $9.99 as a promotion. This is selling below cost. No evidence they were losing money on all their ebook sales. Amazons strategy is low low low margins. They lose money on best sellers and make up the loss with other books. They can do this because of the huge volume of sales that is possible when you have low low low margins. Their strategy is the exact opposite of Apples.

Lets face it.... (-1, Flamebait)

Anonymous Coward | about 2 years ago | (#41259933)

Apple is anti-competitive.. They want to be the leader in everything, and will do everything illegal to get there.

Re:Lets face it.... (4, Interesting)

DeathToBill (601486) | about 2 years ago | (#41259971)

I have mod points. Now, if only there was a '+1 Flamebait', because, as right as you are, you are going to get a thrashing.

Will this result in lower prices? (5, Insightful)

hawguy (1600213) | about 2 years ago | (#41260001)

I, for one, hope this results in lower eBook prices.

I have a Kindle (and Nook tablet) that are underutilized because I refuse to pay more for an eBook than I do to have a paper book delivered to my house. About the only eBooks I read are from Smashwords [smashwords.com] or Baen [baen.com] . Almost every book I've bought from Amazon has been a used paper book because they are typically about half the price of an eBook.

After 2 years with the Kindle, I've bought exactly 3 Amazon eBooks - all purchased before traveling since I didn't want to carry around heavy paper books. I've never gotten around to reselling my used books (which would net me another dollar or two of savings), so my local thrift shop has been getting them.

Re:Will this result in lower prices? (1)

geek (5680) | about 2 years ago | (#41260131)

What are you willing to pay? I personally buy books from Amazon all the time for Kindle, even though I have a Nexus 7 now. Amazon offers the best prices out of everyone I've checked. I won't pay more than 9.99$ for a book and thusfar haven't needed too as all the books I want are that price or lower. Not true of Google Play however where I'd prefer to be buying books. Many of the same books on Google Play are 3-5$ more than Amazon.

I think on average I spend about 4-6$ on a book and I do that about once or twice a week. What's reasonable to you? I hear a lot of people complain about the pricing but as far as I can tell it's only the really big name titles being priced in the 12-15$ range. If people would stop paying that they'd reduce the prices.

Re:Will this result in lower prices? (2)

MozeeToby (1163751) | about 2 years ago | (#41260217)

Snow Crash [amazon.com] - $10 from Amazon in paperback or kindle format, less than that from other sellers, and less than 1/5th that used. That's just one I know to be ridiculous from memory. How is it the same price to pulp a tree, print it, package it, and ship it to my house as it is to copy a digital file and send it over the internet (not even over wireless networks since most of the new Kindle's are WiFi only)?

Re:Will this result in lower prices? (1)

geek (5680) | about 2 years ago | (#41260407)

I'm not going to justify the higher price per se but just toss out some examples. I'm not too sure of situations in which technology ever made anything cheaper. In this case you get to download that copy over and over again for life (or at least as long as Amazon is alive). You get to store it in the cloud or on a small device instead of storing it on massive shelves through out a room of your house. You also get updates to that title if corrections are made in the future.

Did HD make TV cheaper? It didn't for me. Did increaed fuel efficiancy in cars make the car or the gasoline cheaper? Nope. The fact is, whenever something like this develops the people who develop it see dollar signs. That's just the way of the world. I'd like for technology to make things cheaper but at least in the short run that's not the case.

Re:Will this result in lower prices? (0)

Anonymous Coward | about 2 years ago | (#41260955)

Did HD make TV cheaper? It didn't for me.

Why would it have?

Did increaed fuel efficiancy in cars make the car or the gasoline cheaper? Nope.

Again, why would you expect it to? It does decrease the amount of gas you have to purchase, which reduces the amount you pay per mile however.

In your examples, the technology is not related to something that would drop the price. In fact, I would argue HD televisions and more fuel efficient cars probably have increased development and production costs. What we are talking about is an instance when technology has meant that the cost of producing or delivering something has decreased, and our expectation as consumers is that some of those savings will be passed on to us. If we look to history, sometimes this does occur. For example, computing power and digital storage space has steadily dropped in price with the advance of technology (of course, the devices themselves don't get cheaper, their capabilities just improve). Technology in the form of more efficient transportation, storage and manufacturing certainly resulted in cheaper food and clothing being available as well. On the other hand, we never did see the drop in price for music that was predicted by the arrival of the cheaper to produce CD. Nor did we see a significant drop when the world turned to mp3/aac. One could argue (as the content providers do), that it is the content that is important, not the medium. The problem is one of perspective. If the price of production was part of the cost of the book/cd/etc that we paid, it looks like the content providers are now pocketing the difference, which seems uncool. If you argue that you have only ever paid for the content, then the content providers are now relieved that they no longer have to eat the cost of production and delivery.

Of course, content providers are quick to switch back to the "you bought the medium, not the content" perspective as soon as you want to play the movie you bought on dvd on your tablet device...

Re:Will this result in lower prices? (1)

MyNameIsJohn (2637265) | about 2 years ago | (#41260973)

Your analogies do not really work and though I do agree with your last point of "the people who develop it see dollar signs", but that type of over pricing or 'premium' pricing for a new service/type of product should only last until competitors get moving and the so-called 'free market' brings the price down to a balance of cost vs desired profit, where the profit takes the most hit the more competition there is. The problem here is that digital books are not new and the cost to produce them has (mostly) totally different dependencies than a paper book. This means the cost factor of 'cost + profit' is not comparable to a paper book and instead what we see here is there is no real reflection of what the real cost is on an ebook because the people setting the prices no longer have too much of a cost. Sure there is still all the work that needs to be done to prepare a book and get it in its final format, but after that -> Replication, Advertising, Distribution, when in reference to ebooks is very low cost, advertising taking up the most if its done aggressively, but even then, when only considering electronic advertising over the internet, its not too much. The middle man that used to take care of the physical replication, distribution, and advertisement surrounding a polished product are finding their business models continually eroded by the continually increasing ability of information to get to anyone anywhere for very little to no cost at all. This leads to new electronic media not being subject to the 'free market' because the first and largest players are usually these old companies that want to maintain price points that not only help to justify their existence, but allow them to stay so large of a company... otherwise they would have to cut profits and realize they need 1/10th the staff to satisfy electronic products and the barrier to entry for distributing those products is also significantly lower than what it was for the physical versions of the equivalent product. Bottom line is emedia prices do not reflect real cost and competition, whether you attribute this to monopolies, price fixing, corporations buying out government, you get the same result and its all for the same reasons... They want to get their $$ and get out before the fall, so they will hold up the walls of their money making houses as long as possible.

Re:Will this result in lower prices? (1)

scot4875 (542869) | about 2 years ago | (#41261105)

Gasoline is limited in supply; ebooks are not.

HD really has no bearing on what method you have it delivered to your home. Likely, you had a choice of one cable monopoly, over-the-air, and DirectTV or Dish. They have their prices partially dictated by what the content providers strong-arm them into paying, and then get away with charging a lot more on top of that because of the relatively low amount of competition.

Digital books really have no excuse for being very expensive; same with digital music. It's based entirely on supporting an industry that's used to getting $10 per CD or $25 per hardcover.

--Jeremy

Re:Will this result in lower prices? (1)

NatasRevol (731260) | about 2 years ago | (#41260443)

How is it the same price to pulp a tree, print it, package it, and ship it to my house as it is to copy a digital file and send it over the internet

It isn't, but that's not up to Amazon.

The publishers are charging more, to make more profit. Just like any business would like to do.

That doesn't mean it makes good business sense though. I think ~$1 less would be a good price point, cheaper for customers and more profit for publishers.

Re:Will this result in lower prices? (3)

Beetle B. (516615) | about 2 years ago | (#41260677)

$10 from Amazon in paperback or kindle format, less than that from other sellers, and less than 1/5th that used. That's just one I know to be ridiculous from memory. How is it the same price to pulp a tree, print it, package it, and ship it to my house as it is to copy a digital file and send it over the internet (not even over wireless networks since most of the new Kindle's are WiFi only)?

I'm getting tired of this argument.

You're living in a fantasy world where the price of commodities is always dictated by production costs.

It may be true for expensive physical products, but when the price is low (as $10 is compared to a $500 tablet), the price is dominated by other factors.

Re:Will this result in lower prices? (1)

nedlohs (1335013) | about 2 years ago | (#41261289)

Because the price of something has little to do with the cost to make it. Other than providing a floor on the price in the long term for producers who want to stay in business and aren't loss leading something else.

For an interchangeable commodity with no barriers to market entry, sure the price will approach the cost of production (plus profit required to make whatever capital investment/risks worthwhile). But book are not such a product.

Re:Will this result in lower prices? (5, Informative)

hawguy (1600213) | about 2 years ago | (#41260439)

What are you willing to pay? I personally buy books from Amazon all the time for Kindle, even though I have a Nexus 7 now. Amazon offers the best prices out of everyone I've checked.

Ideally, I'd pay around $6 or so, which is what I typically pay for a used book to be delivered to my door. (and I usually pay $4 - $6 on Smashwords or Baen)

Here's an example of pricing that makes no sense (assuming free Amazon Prime shipping)

        The Amateur - $16.99 hardcover, $9.99 eBook, $6.99 paperback, $6.88 used

Even moving off the bestseller list and going to an older book doesn't help

      Fahrenheit 451 - $13.78 hardcover, $9.99 eBook, $7.19 paperback, $6.88 used

Why is the paperback priced lower than the Kindle? I paid $100 for an eReader and publishers want me to pay more for the privilege of reducing their distribution costs?

It does go the other way sometimes too -- usually (but not always), the eBook is cheaper than the hardcover, but more often than not, the eBook seems to be priced more than the paperback, and is almost always more than a used book.

Re:Will this result in lower prices? (1)

Githaron (2462596) | about 2 years ago | (#41261379)

Since we cannot currently sell and buy "used" ebooks, publishers really need to set the ebook price to what used paper books are selling for.

Re:Will this result in lower prices? (0)

Anonymous Coward | about 2 years ago | (#41261473)

Why is the paperback priced lower than the Kindle?

Because the ebook is delivered instantly (less than a minute) whereas the paperback shipping maxes out at next day.

Re:Will this result in lower prices? (0)

Anonymous Coward | about 2 years ago | (#41260427)

*posting AC to save the mod points*

I'm with you. I'm currently looking at purchasing 'A Million Miles In A Thousand Years' [indigo.ca] by Donald Miller and I can get new paperbacks for the same price (or darn near) as the epub and I go 'why?' Seriously, a server cannot cost as much as warehousing plus delivery.

Re:Will this result in lower prices? (0)

Anonymous Coward | about 2 years ago | (#41260633)

So you're not only saying ebooks shouldn't cost more than paperback editions, but that they shouldn't cost more than used paperbacks? That's a bit extreme, no?

Re:Will this result in lower prices? (1)

Githaron (2462596) | about 2 years ago | (#41261417)

You can't resell ebooks. Makes sense to me.

Re:Will this result in lower prices? (0)

Anonymous Coward | about 2 years ago | (#41260903)

I'm sure it will result in lower prices temporarily. But once Amazon has run all of the other e-book retailers out of business and has a total monopoly, it'll have zero motivation to keep selling books at a loss. Then Jeff Bezos will raise prices and Amazon prices won't be cheaper than they were when Amazon had competition. The difference is that you won't have any alternatives but to buy from Amazon.

Think about the long game here, people. Amazon had a near-monopoly and the DoJ is busy trying to help them establish a total monopoly. Since when has a total monopoly every been good for consumers in the long run?

Re:Will this result in lower prices? (1)

hsqueak (1068014) | about 2 years ago | (#41261227)

I hear you about Baen - they're one of the few places I've gotten non-free ebooks. I've "bought" more than 800 Amazon ebooks, most of which were free (promotional) or exceptionally cheap (I think I bought a couple for $1.29). I think that's a pretty good deal. Couple that with library e-lending and I really have no need to buy anything (unless I want to own it badly enough and want it *right now*).

Re:Will this result in lower prices? (0)

Anonymous Coward | about 2 years ago | (#41261299)

I, for one, hope this results in lower eBook prices.

I have a Kindle (and Nook tablet) that are underutilized because I refuse to pay more for an eBook than I do to have a paper book delivered to my house. About the only eBooks I read are from Smashwords [smashwords.com] or Baen [baen.com] . Almost every book I've bought from Amazon has been a used paper book because they are typically about half the price of an eBook.

After 2 years with the Kindle, I've bought exactly 3 Amazon eBooks - all purchased before traveling since I didn't want to carry around heavy paper books. I've never gotten around to reselling my used books (which would net me another dollar or two of savings), so my local thrift shop has been getting them.

I agree I also refuse to pay higher prices for a download. To date I have only purchased one ebook for our kindle which is two years old.

Re:Will this result in lower prices? (1)

fredprado (2569351) | about 2 years ago | (#41261333)

Any price is too high if the ebook has DRM. I would happily pay for non-DRM ebooks, though, up to something around half the price of the paperback.

Ecosystem (0)

Anonymous Coward | about 2 years ago | (#41261427)

The author-editor team didn't make anything from your used books.

It's a sticky topic. I don't want to go off the rails from your post, just point out that used books have that crucial payment to the creators stripped out -- it's an unsustainable comparison. Matching that price means no books produced.

Napkin time:

FWIW I make about the price of an okay coffee per book sold. Figure with technical books that 30k copies is an amazing success. (Not as crazy as it sounds. UK + US + CAN = ~ 400 million people; a small 100,000 person city would have 8 copies of a technical book sold to make 30k overall. That's all the people who /could/ be interested. Going to ebook format does not change this limit.)

Tech books often, but not always, have multiple authors. Figure that, plus don't forget a chunk to cover the time of the editor and tech proofers.

It's not big money on the receiving end. The old joke about burger-flipping making more per hour isn't really a joke.

But now you've got a cost of several dollars over the 'raw log delivery' of getting a used paperback from Amazon. Ebooks have to have that cost included or there just won't be books made.

So while I totally appreciate wanting to have eBook prices lower, there's a core-cost problem you should be aware of that prevents it from going anywhere near as low as most people think at first.

[AC post; my publishing contracts require me to say nothing at all about my publisher etc, unless it's rainbows and unicorns.]

Of course (2)

DanTheStone (1212500) | about 2 years ago | (#41260003)

Yeah, lots of the comments were opposed. The judge looked through them, and saw that all the reasons people/groups/corporations were opposed weren't illegal or anticompetitive. So, no reason to reject the settlement.

ban hammer these companies (4, Insightful)

medelliadegray (705137) | about 2 years ago | (#41260015)

I am getting pretty annoyed how so many companies are being settled with for legal issues, at cost of a mere pittance to these companies.

I want to see the ban hammer come down and come down hard on these guys. If i break the law with something as simple as a parking ticket, that is a substantial cost to me. if I were to break the law in something major it screws me for life. Why is this not being applied to corporations?

Price fixing? confiscate ALL past profits gained from of the fixing, and fine future profits as an exponential multiplier of the fixing revenue. not to mention jail time for the crooks who okay the fixing. make companies leave yellow piddle marks when people even suggest they could be price fixing, colluding, bribery.

Re:ban hammer these companies (2)

TheGratefulNet (143330) | about 2 years ago | (#41260245)

watching the 2 conventions (repub and democ), it was so very clear that the repubs are wholly onboard the 'corporations are people!' bandwagon and the dems are not. they even said so in non-mincing words.

now, do they believe that? I doubt it. but it was refreshing to at least HEAR them say that corps have gotton out of control in the modern world and need to be reeled back quite a bit.

my hope is that the dems mean what they said. the reality is that they are owned by 'just different' corps and so business will be, ahem, as-usual for the forseeable future.

we gave corps too much trust and power and its going to be nearly impossible to pull it back to center again. much of the world has been convinced that the trickle down concept works. ;( ;(

Re:ban hammer these companies (1)

fustakrakich (1673220) | about 2 years ago | (#41260325)

Take their money and property, but jail time? Please.. Prison is supposed to be for people that are actually dangerous. Jail time for this is petty vengeance... more power tripping.. Now, if you are operating a private prison, or looking for free sweatshop labor, then I can understand your point

Re:ban hammer these companies (2)

CanHasDIY (1672858) | about 2 years ago | (#41260551)

Take their money and property, but jail time? Please.. Prison is supposed to be for people that are actually dangerous.

Like potheads? Prisons are full of those...

Re:ban hammer these companies (1)

demonlapin (527802) | about 2 years ago | (#41261077)

I'm going to go out on a limb and suggest that fustakrakich doesn't want them there, either.

Re:ban hammer these companies (1)

CanHasDIY (1672858) | about 2 years ago | (#41261455)

I'm going to go out on a limb and suggest that fustakrakich doesn't want them there, either.

I won't assume to know their intent, I was merely pointing out the simple fact that yes, while prisons are supposed to be filled with dangerous criminals like murderers, rapists, and Wall Street Bankers, they are instead filled with what amounts to people who engaged in morally harmless activities such as recreational drug use, which the government decided, arbitrarily, ist verboten.

This is not meant to disparage fustakrakich's statement in the least.

Re:ban hammer these companies (1)

jkflying (2190798) | about 2 years ago | (#41260763)

Surely they should at least be banned from taking position as a CEO/CTO/whatever at any company in the future? If they OK'd price fixing, then they haven't demonstrated the moral/legal qualities required to hold such a position.

Boohoo your old buisness model is obsolete. (0)

Anonymous Coward | about 2 years ago | (#41260043)

It's amazing how ferociously the old giants fight when they're faced with obsolesce. I'm sure at one time the big publishing houses served a purpose. (Editing, promotion, collective use of expensive book printing/manufacture facilities).. But now the internet has turned them in to largely redundant middle men that still believe they can leech the system forever.

I hope Amazon kills every last one of them. I hope so because consumers can then realize the better prices that digital distribution should bring. Not to mention authors, who should see a bigger cut of sales without a literally 100 year old obsolete institution soaking up their profit.

Re:Boohoo your old buisness model is obsolete. (5, Informative)

bdam (1774922) | about 2 years ago | (#41260179)

I work for a publishing company and ... this is going to blow your mind ... a significant majority of our authors wouldn't want to have to be responsible for editing, promoting, designing, and selling their product. They also tend to really like that we give them money in advance before they even have a finished manuscript. Their book could sell zero copies but they at least got several grand out of the deal; it's a comforting thought when putting in months of effort. Are there examples of authors out there who do like to take the hands on approach and can it work out for them? Sure. I seriously doubt however that our 60+ year old Amish fiction author wants to try and figure out why InDesign hyphenates across a page break despite being told not to when you add a hyperlink text destination for the table of content.

Re:Boohoo your old buisness model is obsolete. (0)

Anonymous Coward | about 2 years ago | (#41260687)

this is going to blow your mind

Not really. If publishing companies go out of business, too bad for them.

Re:Boohoo your old buisness model is obsolete. (1)

bdam (1774922) | about 2 years ago | (#41260747)

And too bad for the authors and customers as well. You will lose out on the voice of authors who wish to write but can't be arsed with the details or risk of bringing their manuscript to market.

Re:Boohoo your old buisness model is obsolete. (0)

Anonymous Coward | about 2 years ago | (#41261181)

So, you'll be replaced with lighter, more flexible, more competitive entities that do "editing, promoting, designing, and selling" and focus on competitive digital distribution.

You're missing the point here. Dinosaur publishing companies live in the physical print business model where they can leverage their control of the production and distribution of physical books. They are responsible for the fucking asinine digital book prices (Often higher than print) and the few cent pittance that authors see for each copy sold (of either medium).

I'd start updating your resume.

Re:Boohoo your old buisness model is obsolete. (3, Insightful)

bdam (1774922) | about 2 years ago | (#41261339)

So, you'll be replaced with lighter, more flexible, more competitive entities that do "editing, promoting, designing, and selling" and focus on competitive digital distribution.

The OP suggests that publishing model is obsolete and good riddance with publishers. So what he is suggesting is to get rid of publishers who take manuscripts, process them, and deliver them to market. You then suggest they be replaced with entities that do the same thing. The entities you describe already exist and they have a name: publishers. Will they have to adapt to the market? Yes,and those that hope to survive must. Would the market be better off if there were no publishers willing to risk author advances, process manuscripts, and deliver them to the market? I believe so, yes.

Re:Boohoo your old buisness model is obsolete. (0)

Anonymous Coward | about 2 years ago | (#41261167)

The existence of publishers doesn't stop people from self-editing and self-publishing if they want to. But not every author wants to, or is even capable of doing a good job at editing, formatting, and publishing their writing. Ideally there should be a nice selection of options for authors to get the services they want. Otherwise, if they go out of business or are forced in to expensive niches, many authors will not be able to self-publish, or end up doing a crappy editing job, resulting in a poorer selection for consumers.

They can compete with Amazon (2)

eclectro (227083) | about 2 years ago | (#41260047)

They need to make it easier to download their ebooks, in more formats, without DRM (which Amazon has)so third party applications can organize the downloads better. In other words, provide more value than Amazon currently offers.

Re:They can compete with Amazon (0)

Anonymous Coward | about 2 years ago | (#41260171)

Great, bend me over with more drm and rand() the contents of the book so next year students cant use it and we can charge another $120 per ebook since they are so expensive to write and all that. Do away with this shit already!

Go ebooks! (1)

GeekWithAKnife (2717871) | about 2 years ago | (#41260113)

Every once in a while we need a maverick. Amazon will undersell and bring back fierce competition to the benefit of the customer. Eventually, it will grow and become another apple, but until then, rejoice.

Re:Go ebooks! (1)

tnk1 (899206) | about 2 years ago | (#41260663)

You know, I usually have no problem with seeing old model businesses make room for better distribution methods, but that doesn't appear to be the case here. It's not a maverick who is showing the way to a better model, it's someone using the good old method of turning a whole industry into a loss leader for their other products.

It would be one thing if it was a publishing company who was lowering prices by becoming more efficient, because then any publishing company could do the same things and compete. That's healthy and keeps prices low, while at the same time sustainably improving the industry and pushing the state of the art forward.

However, in this case, Amazon is a company that makes a lot of money with other products and uses that extra money to get a leg up on pure publishing companies. That sort of downward price trend does not make publishing companies better, it puts them out of business because they don't have the external source of revenue to support a money losing model. While Amazon can pay for its staff and other costs using the other income they have, the publishing company has only publishing receipts to keep the bills paid, which means Amazon will always be able to lower prices beyond the point where publishers become unable to sustain themselves.

I'm not sure I will be rejoicing when my few cheap e-books now turn into 10 years of Amazon dictating prices AND e-book standards, as well as doing other nasty things that monopolists do. And don't bet on an anti-trust/dumping suit to fix the issue, they are that's why I factored in the 10 years. It will take that long for the case to even get through the courts and even if the decision is positive at that point, the damage has already been done. Of course, looking at Microsoft, we can see that even a convicted monopolist is not really even slowed down by legal proceedings.

Now, I am not saying that I agree necessarily that the Agency model was the way to fight this battle, because it does feel like a cartel which would artificially inflate prices instead of artificially deflating prices. Still, I'm not sure that it's good that Amazon has nothing else to contend with.

Do you guys support Amazon as a monopoly? Really? (3, Insightful)

aristotle-dude (626586) | about 2 years ago | (#41260115)

Do you realize that the agency model was designed to allow for publishers to set the prices thereby removing the power from the distributor/seller and to disrupt Amazon's monopoly?

Amazon could, at first, offer lower prices to the consumer until they wiped out the competition but once they were supreme, they could jack up the prices or try to gouge the publishers/authors for lower wholesale prices with threats to not carry their books in the future.

You seriously should not be happy with a monopoly of the justice department enforcing a return to a monopoly. The market should be allowed to decide. If a book does not sell well, the market forces should cause the publisher to lower the sale price until it does sell.

Amazon, in the digital space, and Wal-mart in the brick and mortar space, were actively using predatory pricing to squeeze out all of the other competition. That situation is not good for the consumer in the long run.

Re:Do you guys support Amazon as a monopoly? Reall (3, Insightful)

geek (5680) | about 2 years ago | (#41260165)

Do you realize that the agency model was designed to allow for publishers to set the prices thereby removing the power from the distributor/seller and to disrupt Amazon's monopoly?

So instead of Amazon having a monopoly the publishers get one. Your logic fails. Having a monopoly isn't illegal either. Abusing that monopoly is. Amazon never attempted to stop others from selling anything.

Re:Do you guys support Amazon as a monopoly? Reall (4, Insightful)

bdam (1774922) | about 2 years ago | (#41260393)

Monopoly ... mono ... kind of indicates the singular so I don't see how multiple publishers can have a singular monopoly. Certainly, the big 5 can be dickish but there are hundreds if not thousands of smaller publishers out there; I work for one. I would consider dumping product as an abuse of a monopoly and Amazon had done just that with our books in the past and there's no reason they won't do so in the future to further cement their monopoly in online physical book sales and e-books via the Kindle.

Re:Do you guys support Amazon as a monopoly? Reall (1)

rsmith-mac (639075) | about 2 years ago | (#41261515)

I concur. With the digital distribution of written works, so long as you have a decent selection of distributors (particularly ones that accept self-publication) then the barrier to entry to the market is almost nil. A cartel on the publishing side means that major publishers can try charging $100 for Harry Potter if they'd like, but that's really all they can do since they can't compel other publishers/authors to stick to their high prices.

On the other hand a cartel or monopoly on the distribution side creates a chokepoint that rivals the world of physical print today. Getting your book listed would put you at the mercy of at most a couple of powerful distributors. Since all of this is virtual they'll probably list your work, but they get to dictate the prices and the share of the proceeds.

Ultimately with eBooks distributors become the new publishers, and publishers become a new type of middle-man. This means it's the distributors you need to be worried about, as the publishers are no longer capable of making themselves the chokepoint.

Re:Do you guys support Amazon as a monopoly? Reall (1)

TubeSteak (669689) | about 2 years ago | (#41261525)

Monopoly ... mono ... kind of indicates the singular so I don't see how multiple publishers can have a singular monopoly.

https://en.wikipedia.org/wiki/Oligopoly [wikipedia.org]
https://en.wikipedia.org/wiki/Cartel [wikipedia.org]

The main difference is that Cartels involve purposeful collusion, while Oligopolies usually end up with the same behavior without active collusion.

I would consider dumping product as an abuse of a monopoly and Amazon had done just that with our books in the past and there's no reason they won't do so in the future to further cement their monopoly in online physical book sales and e-books via the Kindle.

Which is probably why Amazon thinks the settlement is such a great deal:
Speaking at an event in California to unveil new Kindle Fire tablet computers, Amazon executive Jay Marine said the settlement was "great for customers."
(by customers he means Amazon can start again in 2 years and doesn't have to pay any fines)

Re:Do you guys support Amazon as a monopoly? Reall (2)

CanHasDIY (1672858) | about 2 years ago | (#41260589)

So instead of Amazon having a monopoly the publishers [i.e., more than one] get one. Your logic fails.

Speaking of logic fails...

Re:Do you guys support Amazon as a monopoly? Reall (1)

geek (5680) | about 2 years ago | (#41260647)

So instead of Amazon having a monopoly the publishers [i.e., more than one] get one. Your logic fails.

Speaking of logic fails...

No, not if they are acting in collusion. Then they are essentially operating as a single entity to fix prices. My logic is quite reasonable.

Re:Do you guys support Amazon as a monopoly? Reall (2)

bdam (1774922) | about 2 years ago | (#41260703)

I believe the term your looking for is oligopoly. You have the choice of a monopoly of the retailer or a oligopoly of the big 5 publishers. I would argue the oligopoly is preferable to the monopoly due to barrier of entry. There are hundreds if not thousands of smaller publishers that might not rival the oligopoly in terms of size but we can remain profitable and every once and a while hit it big with a best seller. Amazon is already entrenched as a practical monopoly and I just don't see how any sort of small upstart is going to overcome that. Small publishers can and do exist in the existing oligopoly but small retail outlets will not with Amazon's ability to dump product.

Re:Do you guys support Amazon as a monopoly? Reall (1)

jkflying (2190798) | about 2 years ago | (#41260807)

It is a monopoly if they are colluding on prices.

Re:Do you guys support Amazon as a monopoly? Reall (0)

Anonymous Coward | about 2 years ago | (#41261425)

Ah. This.

Exposed to the facts of Amazon's actions, yeah, they're a horrible, terrible, no-good, very bad corporation. BUT...

The publishers want, it appears, to kill ebooks. It seems they'd rather not bother with the whole thing, because the prices they set are fucking insane. It costs approximately $0.0001/copy to produce and deliver my copy of, say, "Godzilla vs. Harry Potter", which is considerably cheaper than their cost to print, warehouse, distribute and track sales on an actual dead-tree copy. Yet the price for the ebook is many thousands of times the cost of production, whereas the margin on the dead-tree version is some double digit percentage points. (yes, I understand there will be profit+royalties added to that cost)

Now, I don't wonder that the publishers like this. Oh, they like it a lot, I can tell. But this conflict, wherein an evile corporate entity wants to overcharge for a new distribution method is battling against another evile corporate entity that wants to charge a more reasonable price initially to establish a monopoly, has no good guys, no heroes and no one to root for.

So I'm not buying ANY ebooks, as the technology is being held hostage. I'll just have to read or re-read the thousands of hard copies of books I've wisely stocked up (against my wife's regular suggestion that they be tossed or donated). That said, the Nook is a fine streaming media device, with a lot larger screen than a smart phone, and a decent mobile internet access device. And it was cheap!

Screw Amazon and especially screw the publishers. (if they weren't a cartel, they wouldn't be able to so effectively prevent reasonable pricing of ebooks from competitors. If this were to happen, I'd buy from them, but gee...somehow nobody can manage to charge $3-4 for ebooks. Maybe a coincidence, eh?)

Re:Do you guys support Amazon as a monopoly? Reall (1)

sangreal66 (740295) | about 2 years ago | (#41260977)

So your preferred solution is one where you can choose between multiple retailers but those retailers don't actually bother to compete with each other on price or content. That's not much better than an Amazon monopoly. By the way, the DOJ complaint details why your claims of predatory pricing by Amazon are largely unfounded

What monopoly? (2)

sirwired (27582) | about 2 years ago | (#41261029)

An e-book monopoly? What on earth are you talking about? I'm sure Apple, the most valuable company in history, has more than enough cash to match whatever price Amazon feels like charging. And don't forget B&N, whose Nook is selling pretty well, if not as well as the Kindle.

In addition, a Kindle will easily read books from other online stores; about 2/3rds of the books on my Kindle didn't come from Amazon, and few of those books are available in electronic format through Amazon.

In addition, it's silly to talk about theoretical future harms from a currently non-existent Amazon monopoly, when we have Agency Pricing, which results in artificially inflated consumer pricing right now.

And how is Wal-Mart's pricing power bad for consumers? There has been little evidence to date that Wal-Mart raises their prices after the local competition shutters. Their consistently low prices (and forcing low prices at their competitors) has been really good for consumers, if not so hot for jobs.

collusion? from news corp? (1)

joocemann (1273720) | about 2 years ago | (#41260211)

But news corp is owned by Murdoch! And murdoch is a major proponent of 'free markets'.

Boy, those free market libertarian fantasies always seem to fail. Even the champions of these ideologies exemplify the failures of deregulation.

Collusion. ~a market situation that arises when the people naively trust business so much that they have no rules, and the business is still prioritizing capital gain as usual.

I feel bad for authors getting it from both sides (1)

Zerth (26112) | about 2 years ago | (#41260253)

Since publishers switched to the agency model, whenever I found an ebook priced higher than the print price, I added it to a "stupid publisher" wishlist. Some have dropped off when prices changed or I decided to buy them anyway, but last I checked, buying ebook version of all 342 of them, it would be about $1400 more.

Some of the prices were clearly higher because the publisher was too lazy to lower the ebook from hardback pricing when the paperback came out.

Most, though, were 9.99 and, more recently, 12.99, which is just a blatant "we're screwing you and we want you to know it". I look forward to authors getting the higher ebook royalty rate when those books drop down to paperback price and I subsequently purchase them.

which ecosystem gets wrecked? (2)

apcullen (2504324) | about 2 years ago | (#41260315)

This will certainly wreck Apple's 30% profit margin ecosystem. The whole publishing ecosystem I'm less certain about.

Re:which ecosystem gets wrecked? (1)

bdam (1774922) | about 2 years ago | (#41260641)

I work for a publisher; it's not Apple's profit margin that we're worried about. It's the hundreds of other smaller retail customers that provide diversity to our customer base. Amazon has, can, and will dump products and that is detrimental to our smaller customers who do not have other revenue streams. If you think retailers are doing just fine I would point you to Borders who, nearly right up to the point they failed, were one of our largest customers. You can make an argument that this is simply how it should be and that's fine but as a publisher we would like to see a diverse range of sellers rather than just Amazon and a bit of Apple on the side.

Re:which ecosystem gets wrecked? (0)

Anonymous Coward | about 2 years ago | (#41261027)

So you publisher's weren't making shady, illegal deals with each other and a very disreputable company just to be greedy? You were just protecting others when you broke the law. The fact that doing so just happened to have the meritorious side-affect of putting more money in your and Apple's coffers while restricting the options for the consumer was a pure coincidence. You're the price fixing equivalent of Robin Hood!

You can't see it but I am actually rolling my eyes in exaggerated and sarcastic manner.

Re:which ecosystem gets wrecked? (1)

bdam (1774922) | about 2 years ago | (#41261443)

No, we were not. There are hundreds if not thousands of publishers and if there was collusion going on no one gave us a call to get in on the deal. When we deal with Amazon and Apple the terms our dictated to us, not the other way around. I'm not defending what the big 5 publishers did; I'm just explaining the likely outcome of allowing Amazon to dump their products.

Re:which ecosystem gets wrecked? (0)

Anonymous Coward | about 2 years ago | (#41261097)

As an author, I'm with bdam.

Fewer revenue streams for booksellers means there eventually will be fewer booksellers. Fewer booksellers eventually will mean there are fewer publishers. And when there are fewer publishers, there will be fewer outlets through which talented new authors will be found and the authors who do break through will be paid less--a serious problem given that most writers can't make a full-time living at their craft now.

All of this will inevitably result in fewer books to choose from and less competition driving their prices down - - less consumer choice all around.

Amazon's answer is it's self-publishing service, but Amazon isn't providing any editorial, proof-reading, graphic design or other support to authors. The result will be that not only will the total universe of new books available to consumer will shrink, a larger proportion of it will be unedited crap posted by hacks.

I fail to see how any of this is good for consumers.

Ebook more than print?! (2)

notdotcom.com (1021409) | about 2 years ago | (#41260787)

I have owned a kindle for about a year and a half. I own over 110 ebooks (most are tech, but also some fiction, classics, etc).

I have *never* seen a printed book cost less than the kindle ebook of the same title. I essentially always buy the ebook over the dead tree version, and aside from instant access, the reason that I do so is because the kindle version is frequently 30% (or more) less cost than the physical version (before thinking about shipping costs). Where are all of these books that are more expensive for kindle than for the paper versions? (Hint: they don't seem to be O'reily, Cisco Press, Apress, SAMS, Sybex, or Microsoft Press.)

Re:Ebook more than print?! (1)

SuiteSisterMary (123932) | about 2 years ago | (#41261481)

It's not that hard, buddy.

1: Open amazon.com
2: Type in name of book. Say, 'fifty shades of grey'.
3: Boggle at the fact that the Kindle version is $12.51 while the paperback is $9.57.

More examples? Stephen King's recent book 11/22/63 is $13.59 paperback, $16.41 kindle.

One of my favourite Star Trek TOS books, Rules of Engagement, is $11.61 kindle. Two cents used. This is a book that I read in 1990. The cost to make it a kindle version was, at most, two hours for somebody to sit down and type it in from a paperback copy.

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