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Amazon: Publishers Strong-Armed Us On E-Books

timothy posted about a year ago | from the fruit-vendor-is-just-a-front dept.

The Courts 171

Nerval's Lobster writes "Strengthened by an agreement with Apple that set the prices for their respective e-books higher, publishers strong-armed Amazon into giving them similar terms, an executive for the online retailer has testified in Manhattan federal court. The U.S. Department of Justice has taken Apple to court over the alleged price-fixing, after reaching out-of-court settlements with five publishers (HarperCollins Publishers LLC, Simon & Schuster, Hachette Book Group, Penguin Group, and MacMillian). Apple, which competes with Amazon in the e-book space, refused a similar settlement. "Certainly if someone offered reseller, we would have taken them up on that offer," Russell Grandinetti, Amazon's vice president for Kindle content, testified before the court, according to Reuters. "Reseller" means a company sells goods to a retailer for a particular price (usually wholesale), allowing the retailer to set the actual sales price. Under the terms of that model, Amazon could sell e-books for super-cheap, even if it meant going beneath the publisher's wholesale price. Macmillan and Amazon ended up in conflict over the issue, with Amazon temporarily yanking the publisher's e-books from its digital shelves. "We will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon wrote in a statement at the time. "Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book." But Amazon eventually relented to Macmillan's demands, along with those of other publishers, and submitted to the agency model, in which publishers have a heavier hand in setting retail pricing."

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What is wrong with these folks? (5, Insightful)

h4rr4r (612664) | about a year ago | (#43930069)

Why do they want even more than for a the paperback?
I am getting less in that I cannot resell it and no physical copy, yet they want even more. On top of that their costs are reduced, since they need not print, ship or deal with any of that.

I just end up not buying those books. It seems though all media folks are just too greedy for their own good, books the same as movies.

Re:What is wrong with these folks? (5, Insightful)

Anonymous Coward | about a year ago | (#43930119)

Because it works. Most people buy into it. Why should I pay $20+ for a BluRay? Oh, because it comes with the DVD and a Media file. But I don't want the DVD and Media file!!!! Too bad. You can't buy it any other way (than used.) So consumers buy anyway. And the sellers sit back rub their hands together with a MUAHAHAHA!

As soon the majority just buys into it, it doesn't matter that the price level is higher.

Re:What is wrong with these folks? (0)

crutchy (1949900) | about a year ago | (#43930197)

why was parent downmodded? it might be ugly but it's still the truth

Re:What is wrong with these folks? (1)

Anonymous Coward | about a year ago | (#43930453)

People are willing to pay it because of the "impulse buy" mentality.

They *could* get the product for cheaper elsewhere, but that would mean them hopping the the car and driving to the book store, hoping that they have it, and then heading home... Or they could buy it online and get it in a week... Or they could press a button and be able to start reading it right now.

Re:What is wrong with these folks? (1)

Anonymous Coward | about a year ago | (#43930471)

ehm... TPB has it cheaper.

Re:What is wrong with these folks? (5, Insightful)

Nyder (754090) | about a year ago | (#43930547)

Because it works. Most people buy into it. Why should I pay $20+ for a BluRay? ....

I'm going to point out that when DVD's were newish, they were $20 new. And you are getting a much higher quality video in Bluray format then you are in DVD format. Give it 10 more years or 4k movies becoming popular to see the price of Bluray movies going down. VHS movies used to cost alot when new also, way back when.

And oddly enough, what you could do is buy a cheaper DVD version of a movie, then download a bluray version to watch. Sure, it's not legal, but you are paying what you feel the movie is worth, just not as much as they want.

Re:What is wrong with these folks? (4, Informative)

CodeBuster (516420) | about a year ago | (#43932491)

VHS movies used to cost alot when new also, way back when.

Indeed they did. In fact, it was this high cost that spawned the rental market for movies in the first place. At that time, most people weren't going to watch a film enough times to justify paying more than $20, and VHS tapes had no "extras", so it made sense to rent the film for 1 to 5 dollars instead (early 1980s dollars). As a teenager I worked in a video rental store and I can remember the store owner telling me that he paid $100+ for each of those tapes. One of the first VHS releases to break this trend was Top Gun which was priced at around $20-$30 when it was released. At the time that was an incredible bargain since most other films cost well over $50.00 if they could even be found offered for retail sale (remember that this was the early to mid 1980s so there were no downloads or even digital copies of films).

More importantly... (5, Insightful)

raehl (609729) | about a year ago | (#43930625)

You don't set your price based on what it costs you to make/provide something. You set your price to maximize profits.

So it doesn't matter that eBooks are cheaper to make/distribute than hard copies. What matters is whether people are willing to pay the same price for an eBook as they are for a hard copy. eBooks are arguably better than hard copy books, so it stands to reason people will pay at least as much, if not more, for them.

Now, in a free market, you would expect a competitor to enter the market at lower pricing - but books are copywritten, so it's not exactly a free market. Even then, the justice department is examining whether competitors in the market illegally colluded to force the agency model on eBook retailers.

Re:More importantly... (2, Insightful)

Anonymous Coward | about a year ago | (#43930677)

cheaper to make/distribute than hard copies.

They are cheaper to "copy and distribute." They are not any cheaper to "write and edit."

I'll give you two guesses which pair above drives the vast majority of the book's price. Hint: it's not "copy and distribute."

Re:More importantly... (3, Insightful)

NatasRevol (731260) | about a year ago | (#43930809)

You haven't operated a printing press & delivery system then.

Re:More importantly... (3, Insightful)

BronsCon (927697) | about a year ago | (#43930847)

I'll grant you that, but you have to admit that they're not more expensive to write and edit either, since that work was done already for the paper edition. In fact, no, I won't grant you that, because that work was done already for the paper edition. If there was, at a minimum, price parity between the paperback and e-book editions, nobody would be complaining that the product that costs less to produce and distribute, while providing fewer benefits to the end user, costs more. Yes, they'd be complaining that the prices were the same, but they'd still be right.

Re:More importantly... (1)

similar_name (1164087) | about a year ago | (#43931041)

Explain why The Grapes of Wrath is $9.99 for the Kindle.

Re:More importantly... (1, Troll)

Austerity Empowers (669817) | about a year ago | (#43932525)

Because students, particularly in california, are required to read it for school, and thus the price of an otherwise uninteresting book by an overrated author is inflated to hold some kids hostage.

Re:More importantly... (2)

spire3661 (1038968) | about a year ago | (#43930821)

And this is the ammunition needed to greatly change copyright. Americans firmly believe that there should be a relationship between cost and price. The longer digital media attempts to completely ignore cost when pricing, the stronger the argument to change copyright becomes.

Re:More importantly... (2)

swillden (191260) | about a year ago | (#43930943)

but books are copywritten

FYI, you mean "copyrighted".

Re:More importantly... (1)

Anonymous Coward | about a year ago | (#43930993)

Yeah, it surprises me how hard it is for Americans to get run-of-the-mill Capitalism. And what's Amazon whining about? You negotiate and you strike a deal.

The publishers may or may not be shooting themselves in the foot, but that's perfectly within their legal rights.

(I'm for abolishing the copyright altogether, but that's a whole other story.)

Copyright isn't capitalism. (1)

Anonymous Coward | about a year ago | (#43931165)

Copyright is the opposite of the free market of "run-of-the-mill Capitalism". And what are you whining about? Someone complaining about the one-sided contract being unfair?

THAT'S WHAT YOU'RE SUPPOSED TO DO.

If you can't negotiate a contract, it isn't a contract. "take it or leave it" is not a "meeting of minds".

Re:More importantly... (0)

Anonymous Coward | about a year ago | (#43931007)

It would appear that being granted copyrights and patents requires some regulation. As long as there are copyrights and patents there can't be a free market. Therefore, the normal effects of the free market are skewed and regulation becomes essential. Since government sponsored monopolies skew the market it makes sense that other monopolies would as well.

Without copyrights and patents, monopolies could still form over control of resources. If that's the case then it would appear that property rights skew the free market too. Hmmm, free markets depend on property rights. It would seem that free markets are an abstract idea that logically can't exist.

Ebook's main advantage is price (0)

Anonymous Coward | about a year ago | (#43931331)

eBooks are arguably better than hard copy books

There are 3 advantages for Ebooks over paperback
1. Size (no extra weight 2 carry), so can carry a whole library.
2. Searchable (not very useful for novels, somewhat useful for textbook, very useful for reference)
3. PRICE. ---- The main advantage.

The downsides?
1. Usually lower res
2. Requires power to run
3. Book reader easier to damage
4. Can't resell
5. DRM restrictions limit where you can read
6. Arguably harder to read in bed falling asleep

You also compete with "free" Ebooks which cost nothing more than a tiny chunk of bandwidth and usually a small amount of room on your device. There is almost no such thing as a free paperback. Very cheap yes, but free physical books are much rarer than free Ebooks.

So like the rest of the media "industry" these middle men are greedy jokers.

Re:What is wrong with these folks? (5, Insightful)

Anonymous Coward | about a year ago | (#43930743)

Even worse, if you do what I did and stop buying movies on discs (I'll wait til they show up Netflix), you are part of the "decline of sales that proves billions of dollars lost to piracy" ... even if you never pirate a goddamn thing. :/

Re:What is wrong with these folks? (1)

interval1066 (668936) | about a year ago | (#43930941)

So consumers buy anyway.

Not me.

Re:What is wrong with these folks? (4, Informative)

jader3rd (2222716) | about a year ago | (#43930995)

Because it works. Most people buy into it. Why should I pay $20+ for a BluRay? Oh, because it comes with the DVD and a Media file. But I don't want the DVD and Media file!!!! Too bad. You can't buy it any other way (than used.) So consumers buy anyway. And the sellers sit back rub their hands together with a MUAHAHAHA!

My parents don't have a BluRay player. My mom went to buy some DVD, and had to ask the store if they had it just as a DVD (instead of the combo pack) and the teenage store worker said that they did have just the DVD, but the combo pack is a better deal. My mom asked if the combo pack was cheaper than just the DVD, and they said 'No', but still insisted that it didn't make sense for my mom to buy the DVD because the combo pack was a better deal. My mom couldn't convince the teenager that a combo pack isn't a better deal if you can't use the other disks. So now she kind of holds it as a badge of honor that she's able to confuse the store clerks by getting just the DVD.

Because they have a monopoly. (0)

Anonymous Coward | about a year ago | (#43931011)

No, sales are down, "piracy" up and the reason? Because it doesn't work. Because most people DO NOT buy into it.

But they have a monopoly and you will not get their titles except through them at the price they set.
Or you don't buy.
Or you avoid the legal route and just take it.

These are the only choices they have given you.

Re:What is wrong with these folks? (1)

sixsixtysix (1110135) | about a year ago | (#43931559)

Why should I pay $20+ for a BluRay?

Who is paying $20 for blu-rays? Of my 99, over 75% were $10 or less, the rest were all under $20*. Maybe a handful were used. Plenty contain additional dvd versions that I can either sell, barter or give away**. Then again, I suppose someone has to be buying those $22.99 [and not even newly released] discs at Barnes & Noble.



* Box sets are broken down into individual price points. For example, Indiana Jones @ $75 on release day, is, with the fourth movie's negative culture value aside, $18.75 per film.

** While it does seem that selling the digital copy codes has been squashed, doing the same with the dvds only might be legit?
Find out next week on...
Slashdot Poster!!!
*cut to credits*

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43930265)

Its another form of Microsoft tax, because the ebook publishers know that the lacklustre programming of Windows means that an errant DLL could crash and upload a user's ebooks to the internet, and also because if someone accidentally loads a long ebook in Microsoft Word it will crash the word count function.

Re:What is wrong with these folks? (5, Insightful)

PhrostyMcByte (589271) | about a year ago | (#43930309)

Take your pick:
  1. Ebooks open the floor to self-publishers wanting to reach a mass audience, which cuts out the established publishers entirely. This is already quite prolific on Amazon. Making the popular ebooks expensive is an effective way to kill off a platform before it starts -- why would anyone buy a Kindle when the books they know are significantly more expensive on it?
  2. Ebooks are certainly more profitable, but they've already invested a lot in physical manufacturing and distribution. Becoming popular too quickly might force them to scale down operations at too fast a pace, and pricing is a way to artificially dampen it.
  3. They're money-grubbing whores and trying to pass the ebook experience off as a premium one because you can carry around hundreds of them, highlight passages, and dozens of other features that 90% of people won't use, while ignoring the core reading experience which is still sub-par even when comparing to cheap mass-market paperbacks.

Re:What is wrong with these folks? (1)

Doug Otto (2821601) | about a year ago | (#43930361)

Part of the problem is that licensing models haven't kept up with the media, especially in textbooks, where Macmillan has a big play. Licensing of stock photography in those books is based on unit sold. While production costs go down because there's no paper, they're still paying for the content. It's really not much different than the pain the music industry went through.

Re:What is wrong with these folks? (3, Interesting)

BronsCon (927697) | about a year ago | (#43930879)

So let's assume, for a moment, that producing a digital copy and sending ig across the interned costs as much as producing a paper copy and shipping it to a store. This ignores the costs involved in writing the book, editing it, licensing included content, and all of that, as we're already in agreement that those costs are equal regardless of format, so let's just remove the remaining variables and say the productions and distribution costs are equal as well. Why the fuck does the e-book edition that I can't resell, can't copy pages from for reference, and can't put on the shelf for decorative purposes when I'm done reading it cost more than the paperback that allows me to do all of these things?

Now let's snap back to reality, where creating a digital copy once the initial works has been done costs nothing and sending it cross the internet costs less than a penny. Still admitting that writing, editing, and licensing costs are the same, why the fuck does the cheaper-overall-to-produce-and-distribute e-book edition cost more?

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43931579)

Because Servers (and don't compare your home computer to a proper server farm) cost money, lots of it, to set up, to run, to maintain.
This is also why Racing cars cost a lot more than the car you drive to work. In principle they are sort the same thing, in practice they are built to a much higher standard. Printing and shipping are a small part of the book price.

Now compare the price of a book to a live concert, you can't resell it, you can't reread it, its a one off event that may or may not be any good and it generally costs a hell of a lot more than buying a CD, and if you have to travel and pay accommodation then the costs add up massively to the point where you could probably buy that performers entire CD/DVD collection cheaper, and yet people still pay and go yet it represents appalling value for money.

So, the next question you should ask is if someone in China is doing the same job as you for a MUCH lower wage, why is your employer paying you so much more ?

Re:What is wrong with these folks? (3, Insightful)

tibman (623933) | about a year ago | (#43932209)

servers are more expensive than a physical supply chain? you're crazy

Re:What is wrong with these folks? (2)

sjames (1099) | about a year ago | (#43931291)

That doesn't explain why ebooks cost MORE than printed books. At most it could explain ebooks costing nearly as much as printed books.

Re:What is wrong with these folks? (2, Funny)

Lodlaiden (2767969) | about a year ago | (#43931977)

The ebook costs more because they are likely to sell more copies, meaning more royalty fees. The have to raise the price on the e-book version to cover these increased costs.

Re:What is wrong with these folks? (1)

tibman (623933) | about a year ago | (#43932217)

The costs increase right along with revenue and profit. There's no need to raise the price.

Re:What is wrong with these folks? (3, Insightful)

Anonymous Coward | about a year ago | (#43930639)

ignoring the core reading experience which is still sub-par even when comparing to cheap mass-market paperbacks.

This is, of course, subjective. I have a Nook, and in a lot of ways I prefer the "core reading experience" on the Nook to my mass-market paperbacks.

For one, I get to choose the font size (and font face, although this isn't so important since most paperbacks have a fine font). Font size is great, because I have some books with tiny type that is annoying to read.

Now, if the argument is that the editing on some ebooks is really, really awful, I will definitely grant that. There are some clear OCR-and-sell books out there.

Next, I don't ever have the problem of the print being too close to the margins, which can be a real problem with fat paperbacks.

I'm not sure how exactly you're defining "core reading experience", so I won't go into more detail. Suffice it to say, the act of reading itself on my Nook is at least as nice as reading a paper book. I never stop and think about the fact that I'm reading on a device; I just read.

Re:What is wrong with these folks? (5, Interesting)

ducomputergeek (595742) | about a year ago | (#43930981)

This is what a friend of mine is doing. He's released 3 books and a collection of short stories ranging in price from $.99 - $2.99. He's sold about 8K copies thus far this year. When I asked him about it he said if he had accepted an advance from a publisher, about $3,500 since he was a new author, he'd still have to do all the marketing and promotion work himself. He figured if that was the case he'd rather do it all himself and cut out the publisher entirely. As he said the 70% Amazon gives him is a better deal.

An an extra $16k in his pocket really helps his family as that's about half what his wife earns per year. He enjoys writing and is hoping in a couple years that his wife will be able to afford to stay home with the kids. Which is rather important because one has special needs.

Re:What is wrong with these folks? (5, Insightful)

Zerth (26112) | about a year ago | (#43930355)

Because they want to keep you buying paper where publishers have all the control. In a digital book market you no longer need financiers able to absorb the cost of printing and distributing 10k copies and you don't need a marketing/sales department that can get your book onto an endcap at bookstores. You still want the people that work for publishers(editors, artists, etc) but you can contract for those directly.

If everyone switches to digital, the publishers' advantage of having a huge bankroll to be able to bet on multiple authors while keep the lion's share of the profit on the few winners is negated when Amazon will sell for anyone and the contract work can paid for like saving up for a car down-payment.

Re:What is wrong with these folks? (4, Insightful)

steelfood (895457) | about a year ago | (#43930363)

tl;dr: to kill the medium before it can be born.

They're scared of it. They don't know what to do, or how it will affect their bottom line. They don't want it. They want people to stop using it. They want their control of the industry back.

The only way they know how to do this is to price the new way above the old way. Because they're still living in their old world, where supply is physical and limited physically. And in that world, changing the price of things changes demand.

Re:What is wrong with these folks? (1, Insightful)

Anonymous Coward | about a year ago | (#43930389)

Because it costs a certain amount of money to write, edit, proof, print, and distribute a book. Eliminating the printing costs (already a small amount of the overall cost) doesn't reduce the cost of producing the book that much.

The costs of producing the book are generally recouped in the higher margins of the "early adopter" sales - hardcovers. Margins on paperbacks are smaller, and cost to produce them is lower, so they can afford to sell them cheap.

Now with e-books, you're eliminating hardcovers and paperback sales, and so the cost of sustainably producing a book must be amortized over the sales of a single edition of e-book. Most books don't see millions of copies because they've been endorsed by Oprah. From doing a little reading via google, it appears that the "average number of books sold" equals somewhere in the order of 20,000 - 50,000 copies for a "successful, major-publisher book."

Assume an average price of $10 for an ebook. That means a person selling 50,000 copies of a $9 ebook (a successful book!) nets $450,000. Wow, that's a lot, right!? Weeeeelllll...... not so much after you deduct author's living expenses while writing the book, the salaries of editors, typesetters, and other people involved in the production of that final .epub file, and less still after you calculate the distributor's cut - Amazon, Apple, B&N, and others don't sell that book for free.

When you consider the costs of something, you have to consider the total costs of producing the original, not the marginal cost of reproducing it. It's never been THAT expensive (relative to the retail price of the book) to print 50k paperbacks. It is, however, expensive to produce the first copy of the book that you're going to make copies of and sell.

Stop being cheap.

Re:What is wrong with these folks? (-1)

Anonymous Coward | about a year ago | (#43930671)

Because it costs a certain amount of money to write, edit, proof, print, and distribute a book.

But information wants to be free (in the sense of free speech, which of course has the downstream effect of being effectively free of cost because the distribution cost is virtually zero)! Volunteers will still write, edit, proof and distribute books for free and we can all share them for free, or people can crowd-fund the production of a book, it's just like free software. People don't have to pay for this stuff because it can be freely distributed and sure somebody will be happy to create it for free.

NB: I don't actually believe that.

Re:What is wrong with these folks? (1)

Anonymous Coward | about a year ago | (#43930765)

NB: I don't actually believe that.

Thank you for that qualifier. My brain was about to a'splode.

I really cannot fathom why this seems so hard for people to grasp - the cost of producing the original copy of a work is many, many, many orders of magnitude higher than the cost of producing subsequent copies. Driving the "cost to copy" to zero does not mean that the 'cost to produce' also goes to zero.

For the people that want to support Creative Commons and self-published authors, great - have at it! I'll support them too - there's nothing to say that a well-written book MUST cost money. But I'm not going to be "first world problem-y" enough to suggest that $9 for a book which gives me dozens of hours of enjoyment is somehow a ridiculously overpriced experience, just because the cheap pulp paperbacks which fall apart after two reads (sometimes during the first read) can be sold for $4.99.

Re:What is wrong with these folks? (3, Insightful)

neonmonk (467567) | about a year ago | (#43931731)

E-books should still not be more expensive than the paper-back. Why is this so hard to fathom?

Re:What is wrong with these folks? (1)

Anonymous Coward | about a year ago | (#43932631)

you have yet to offer a reason why other than "i think it should cost less."

Ebooks are a fundamentally different model: you don't have an "early adopter, more durable" hardcover edition to sell to people for a large profit, and then a follow on, barely-profitable paperback that you push out hoping to sell in larger quantities to price-conscious readers.

You have one ebook. You have a series of fixed costs, with ebooks only really affecting the *reproduction costs,* which are a small part of your overall cost when you're talking about tens of thousands of copies. If you expect to sell 20,000 copies of it, and it costs you $200,000 to produce, then $10 per copy is *break-even.*

Why is this so hard to fathom? If you sell all your products at a loss, you will go out of business. Ebooks aren't breaking new ground - sale of an ebook will cannibalize sales of paperback and hardcover books. I buy books frequently - I've bought almost no "physical" books since I got a Kindle a couple years ago.

Re:What is wrong with these folks? (4, Informative)

0123456 (636235) | about a year ago | (#43930907)

Wow, that's a lot, right!? Weeeeelllll...... not so much after you deduct author's living expenses while writing the book, the salaries of editors, typesetters, and other people involved in the production of that final .epub file, and less still after you calculate the distributor's cut - Amazon, Apple, B&N, and others don't sell that book for free.

Uh, what? A writer whose e-book sells 50,000 copies at $9 with a typical trade publishing deal makes about $68,000 after giving $12,000 to their agent. Amazon makes about $135,000. That leaves $235,000 to the publisher.

Do you really, seriously believe that editing a book, formatting it as an .epub and sticking a cover on costs $235,000?

Oh, apparently you do.

Re:What is wrong with these folks? (2, Informative)

Anonymous Coward | about a year ago | (#43931679)

Simplistic. You forgot to mention the other 1000 books they were sent that had to be looked at and rejected, that did not come for free, the publisher paid staff to do that. You then for got about the other 100 books that were accepted but went through a lot of editing back and forth until it was publishable, which then left probably 99 of those books selling a few hundred copies. There would be checks made before publication for plagiarism etc. Did you notice how there was a hell of a lot of expenses going on all of the time from people who made them no money.

Meanwhile the publisher still had to pay their staff to handle EVERYTHING that came in, not just for the 1 writer who made them a lot of money.

Re:What is wrong with these folks? (1)

tibman (623933) | about a year ago | (#43932257)

That wouldn't make the ebook cost more. Those are costs that both versions share equally.

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43932581)

Those are costs that push up the overall publishing service cost for everyone. what the publisher charges has to cover his real expenses for that book and then an additional added set of expenses for the average cost of non profitable books and rejected books (risk or overhead or whatever you want to call it, but still a real cost) and then make money on top.

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43931857)

Wait, 50,000 copies!? That's a success. That's a book the publisher should be making a good profit on to fund the advances to authors that aren't as successful.

Re:What is wrong with these folks? (1)

BronsCon (927697) | about a year ago | (#43930925)

That's fine. If the paper copy costs 50 cents to print and distribute, charge 25 cents less for the e-book edition. Hell, charge the same price, I don't care. Don't fucking charge more, though.

Well, actually, as someone who resells books when I'm done with them, I do care. If you want me to buy the e-book edition, it needs to be priced at least close to (price of paperback - what i can sell it for when I'm done).

DERP.

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43931765)

And exactly how much does it cost to set up, run, maintain a proper server farm that is available 24/7
Add in the ecommerce backend that too is available 24/7
It best be auditable by the publishers so they can confirm all sales of all books
Oh yes, best add in sales taxes that must be accounted for, they too will need an audit trail by shipping address and you will need to keep al of this
available for what is it 11 years or so.
Dont forget the costs like the multi megawatt cooling needed to keep the servers cool, and the RAID arrays, and switches, and Fibre networking
Better add in the expensive firewalls, then what happens in case of fire, can't use water, so Nitrogen or CO2 systems arent cheap
Lawyers / accountants at corporate levels cost, and investors want a return on the money they have put in.

And even if you dont sell 1 book, you still have all those costs.

So exactly why should ebooks cost less, oh I see its because you can copy a file from your hard drive to a USB flash drive and believe it is the same thing.

Re:What is wrong with these folks? (1)

tibman (623933) | about a year ago | (#43932269)

If you have multi megawatt cooling and fibre networking then i think you aren't a book publisher. You are a data center that other businesses will pay to host their sites.

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43932649)

Which is a COST back to the publisher , or do you propose that books get published electronically without a data centre ?

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43931167)

Why should books that are 50 years old costs $10 for the ebook? And then they contain many OCR errors.

Stop being naive.

Re:What is wrong with these folks? (2)

wolrahnaes (632574) | about a year ago | (#43930391)

Because in a lot of cases they own the facilities that print the books. The parts of the business that e-books either render obsolete or reduce the need for are parts where the big companies involved still make money. They see e-books as a threat to that part of their business and thus their profit margins. They've also seen what happened with music, if you are a content producer it's getting easier and easier to bypass most of the middlemen. The "big content" companies are the middlemen, so while I don't think anyone believes they'll win they'd still prefer to drag out the battle as long as possible. Doing anything in their power to reduce the appeal of e-books is part of that strategy.

Re:What is wrong with these folks? (5, Insightful)

hairyfeet (841228) | about a year ago | (#43930429)

Look at the emails written by Jobs and you'll have your answer, one word...GREED, especially greed on behalf of Apple regarding how big a slice they would get. I don't see how anybody could read the emails and not accept its blatant price fixing, I really don't. He was about as subtle as a freight train and this really shouldn't surprise anybody who has looked into Jobs history because the man really was a sociopath.

I'm sure i'll get hate for saying that about St Steve but its a fact, sorry. he fucked over his friends, even when he had more money than them such as fucking Woz out of his share of the games they sold,sold out his friends when he got caught selling blue boxes, go read up on his history folks, he was NOT a nice man.

So the only question in my mind is does the DoJ have any teeth left and will they do fuck all about it, as we have already seen companies like Intel that really REALLY should have been busted for price fixing walk away scott free and after reading the emails if the DoJ doesn't bust their asses i think we can accept that corps can just do what the fuck ever they want in this country. Again do NOT take my word for anything, please go read the emails for yourself, they are just as damning as the Halloween documents from MSFT or the heads of Dell and Toshiba saying the profits they made in several quarters were nothing but Intel kickbacks, again he was NOT in any way subtle about the whole plan.

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43930599)

Shipping and Printing in bulk are not high costs, adding perhaps $1 to the cost of books.

For example, in New Zealand we often get US grown fruit for NZ$2-50/kg thats about US$1.40 a pound, sometime we pay less than that. Now these are grown, picked, packed, shipped in refrigerated containers, sold at wholesale, shipped to the supermarket by land and put on the shelf. Now I doubt anyone is making a loss in this whole chain, but is shows how cheap bulk shipping actually is.

Likewise printing, where I work we pay NZ 3c per page which covers the cost of the paper, the toner and the lease of the high end Fuji/Xerox printer/photocopiers
and for bulk printing we pay MUCH less than that.

Server Farms cost, they cost a LOT. They cost a lot to build, they cost a lot to run, they cost a lot to maintain.
Trying to compare your home computer to a Server farm is like comparing your home car to a race car, conceptually same idea but the costs are way different.

Now, equally unlike your home computer, when you starts running ecommerce there is regulation and compliance to go with it, for example notification of users if you are hacked, this requires a lot of back end systems that have nothing to do with just the server supplying the books. Also the home network switch you have is a toy, start looking at fibre switches and how you are going to connect thousands of machines, then how much heat they generate and how much its going to cost you to cool them, and how much physical and other security is going to cost, add in lawyer/accountancy, public liability insurance cost etc etc etc. Add in the cost of high end RAID arrays, someone swapping dead drives every day.

So no the electronic version is probably no cheaper really than the printed one, its only because you can copy it yourself without having to bear any of the costs does it seem cheap.

Pricing is based on utility as well as cost (3, Insightful)

MattW (97290) | about a year ago | (#43931155)

Pricing can be based on utility, rather than cost; see http://en.wikipedia.org/wiki/Utility [wikipedia.org] . I completely agree with you in principle, but I've found I am now just buying ebooks, even when I could get a paper copy for less, because:

- I get it instantly
- I tote my entire library around on a device that weighs 11 ounces
- I can read on multiple devices and it syncs my position automatically

And I recently gave >1000 books to the library when moving, so I know that despite my fears that Kindle as a platform might die, I'm not necessarily keeping all my books forever. (Although since my daughter is 11 and I'm now giving her books I bought when I was a kid... there is definitely some merit to it. If anything, this is the one thing that keeps me occasionally buying paper books; the loaning and hand-me-down factor.)

I'll be honest - I hate myself a little for capitulating, because on principle I completely agree with you. But I also drop $6 on triple lattes frequently and I just feel too busy to feel any rage over a few bucks here or there. I applaud everyone who goes for the cheaper option even if they'd prefer the e-book at that price.

The equivalent crap happens in movies as you point out. HD movies on iTunes being $15 instead of $10, or $20 instead of $15, say, seems fairly absurd, since the difference is perhaps $.02 of bandwidth. TV shows even more crazy, being $3 instead of $2.

The reality is, publishing is a completely shitty business. Macmillan's parent company (a publishing conglomerate) made a whopping 6.7% on 2.1B Euros in 2005 (BEFORE taxes). (2010 they were up to 2.25B euros)

That's not exactly rolling in the dough.

Re:What is wrong with these folks? (0)

Anonymous Coward | about a year ago | (#43932309)

Fuck them in the ass. Just pirate. And the money you save, donate it to poor kids in africa

Re:What is wrong with these folks? (1)

drinkypoo (153816) | about a year ago | (#43932579)

I am getting less in that I cannot resell it and no physical copy, yet they want even more.

There are sellers all over eBay selling illicit copies of other people's copyrighted media. For example, you can buy many virtual machines stuffed with automotive service manuals... Of course, you can also cut the binding off of a book and feed the pages into a sheet-feed scanner, so that's a bullshit argument, but I bet it's the one they'll use.

The Oil industry does it daily (2)

ackthpt (218170) | about a year ago | (#43930083)

But you can't fix prices on books...

Well, e-books anyway.

Dead trees are still highly variable.

Re:The Oil industry does it daily (1)

h4rr4r (612664) | about a year ago | (#43930111)

Please elaborate. My understanding was oil is sold on an open market and is a heavily traded commodity. What makes you think price fixing by oil companies inside the USA is occurring.

Mind you OPEC can do what they like since our laws do not apply to them.

Re:The Oil industry does it daily (2)

crutchy (1949900) | about a year ago | (#43930251)

hahahahahahha!!! next you're going to tell me that the bond market isn't being manipulated, even though the yield is less than (real) inflation (which means any honest bond investor is losing money on bonds). how about gold? yeah that definitely isn't being manipulated. pffft.

anyone who buys anything on the open market is a fool. its just unfortunate that we're all forced into playing a role because in many countries superannuation is compulsory, and super (or 401k or whatever you call it in your country) is the biggest cash cow ever for these manipulative market speculators who love nothing more than gambling with other people's money with no risk

Re:The Oil industry does it daily (1)

doubledown00 (2767069) | about a year ago | (#43930373)

OP didn't say manipulated. It said "price fixed". Big difference there.

The bond market of which you speak (and the financial markets in general) can be gamed by conglomerates of individual entities. However the prime difference here is that these combinations affect the *secondary market* and are *not* related to the companies that float the bonds. That is, the company that floated the bond does not benefit directly from any support the security receives in the secondary market.

E-books on the other hand are different. The publishers attempted to directly price fix what was charged for their product at the point of primary sale. This of course resulted in additional profits directly into their pocket. It is a different scenario from securities.

Re:The Oil industry does it daily (1)

HornWumpus (783565) | about a year ago | (#43930483)

You might want to look at how Treasuries and the Federal Reserve are working these days. There is _no_ market on T-bonds. The rate is set by the Fed and the government. Many bonds are prices at federal funds rate + x%.

Re:The Oil industry does it daily (1)

doubledown00 (2767069) | about a year ago | (#43930291)

Mod this up.
I too would like OP to explain how the oil industry sets about mandating price on the fungible commodity that they sell. I'm not saying the commodity market is rational, mind you. I'm just saying if a producer tried to strong arm these kinds of tactics, the market buyers would respond with a very loud and heartfelt FOAD.

Re:The Oil industry does it daily (0)

Anonymous Coward | about a year ago | (#43930411)

Yeah! Oil isn't price-fixed at all. Well, barring the fact that most oil is produced by a cartel of companies whose sole existence is to fix prices and ensure a rapaciously profitable market!

Re:The Oil industry does it daily (1)

HornWumpus (783565) | about a year ago | (#43930503)

OPEC has the same problem as all cartels, cheating (producing more then their allotments, overestimating reserves to get a bigger % of production etc etc).

Re:The Oil industry does it daily (0)

Anonymous Coward | about a year ago | (#43930475)

You answered the question already: OPEC can do whatever they want, and OPEC currently produces ~40% of the world's oil. That means, effectively, they set the price. The OP didn't specify countries in the US were colluding to set prices. They don't have to: all they have to do is set it to whatever OPEC does (natural market trading dictates they should anyways), and it produces the same result.

Re:The Oil industry does it daily (1)

Anonymous Coward | about a year ago | (#43930259)

I don't think that's how the price of oil is set. But that's just speculation.

promoting piracy (2, Funny)

Anonymous Coward | about a year ago | (#43930127)

Is it just me or is everyone doing mental calculations of how many books I should pirate to get my money back?

grow some balls (1)

slashmydots (2189826) | about a year ago | (#43930175)

If I was Amazon, I wouldn't have caved. If any of my vendors up the price even a penny above what I think, I go to their competition and they're dead to me. Systemax (aka Tiger Direct and Infotel) gave me 5% off at my volume so gooooodbye Newegg. They aren't seeing my $50,000 in inventory and custom build purchases anymore.

If it's a vendor that ups the price, same deal, in that I just don't carry them. For example, OCZ Vertex 4 SSDs. They were $80-100 all the time. Then suddenly their press release says they're done "being competitive" and guess what, I ordered zero after that when they hit $140-150. Now I sell Samsung 840's and Kingston Hyper X 3K's.
I think Amazon should have done the same. None of this "oh but I like them and we want to do business with them and want money." You have to have an iron fist until the company gets a clue. OCZ is now on the verge of bankruptcy. Clue much? You would think, but no, same old prices.

Re:grow some balls (3, Insightful)

_UnderTow_ (86073) | about a year ago | (#43930213)

That's all well and good when you're selling things for which equivalents can be easily found. For books if you want (say) the newest Neal Stephenson book, and you don't like the publisher's prices you can't just say "Well screw them, I'm going to get Neal's new book from this other publishers".

Re:grow some balls (1)

dadelbunts (1727498) | about a year ago | (#43930237)

And anyone who doesnt want a Neal Stephenson book should be tarred and burned.

Re:grow some balls (0)

Anonymous Coward | about a year ago | (#43930707)

Its more like:

I don't like the publisher's prices so I can just say "Well screw them, I'm going to find Neal's new book on the internet somewhere".

Everyone has a price point where they will pay up or go around the purchase process.

( Ever noticed the mess outside pay toilets? )

Re:grow some balls (4, Insightful)

_UnderTow_ (86073) | about a year ago | (#43930783)

Absolutely, but that's not really relevant to my comment or the one I replied to. He was saying that when computer parts manufacturers raise prices, he just buys his parts from someone else. And that works fine as longs as those parts are completely interchangeable (memory, hard drives, etc). But if you're selling ebooks, and you don't like Neal's publisher, then you simply can't sell his books unless you cave to their demands.

As Amazon said, the publishers have a monopoly on works by their authors.

Re:grow some balls (1)

Anonymous Coward | about a year ago | (#43930231)

Since when can I get the same book from 2 different publishers?

Re:grow some balls (1)

PRMan (959735) | about a year ago | (#43930721)

Offtopic, but OCZ is on the verge of bankruptcy because they have become known as a company that puts 1% more speed over the reliability of your data. People have finally realized that 1% more speed doesn't matter, but data reliability is king when it comes to hard drives.

Amazon undrestands books, publishers only control. (2, Insightful)

intermodal (534361) | about a year ago | (#43930203)

Amazon has made a fortune by understanding the marketplace. Publishers only care about controlling the works they release. I think often they forget that the reason people purchase books, and just assume they'll buy them. There's a reason I frequent used bookstores and only pick up ebooks for free or for a very, very low price. I like lending my books, I like selling my books if I don't like them, and I like not having to worry about whether my device is charged.

People know when they're getting ripped off. $15 to copy a file which can be sold an unlimited number of times by the publisher with no further cost or effort is ridiculous, especially when compared to the price of waiting for a physical paperback or a used copy.

Re:Amazon undrestands books, publishers only contr (0)

Anonymous Coward | about a year ago | (#43930359)

$15 to copy a file which can be sold an unlimited number of times by the publisher with no further cost or effort is ridiculous, especially when compared to the price of waiting for a physical paperback or a used copy.

I don't understand. Are you saying $15 for an instant copy of a file is ridiculously good compared to the time wasted waiting for a more expensive physical copy?

If not, could you perhaps rephrase that last part?

Re:Amazon undrestands books, publishers only contr (0)

Anonymous Coward | about a year ago | (#43931043)

Amazon has made a fortune by understanding the marketplace.

Considering their huge revenue, not really. Barely $5 billion since 2003. And last year they lost $39 million, while having a revenue of over $61 billion. They may understand the marketplace, but not making money.

Re:Amazon undrestands books, publishers only contr (1)

neonmonk (467567) | about a year ago | (#43931773)

Gotta spend money to make money.

Egon was only half right. (1)

doubledown00 (2767069) | about a year ago | (#43930229)

"Print is dead." But we pay market rates anyway.

Long live the all holy business model.

Re:Egon was only half right. (0)

Anonymous Coward | about a year ago | (#43930581)

That's fascinating. I read a lot myself. I think it's a wonderful way to spend my spare time. I also play raquetball. Do you have any hobbies?

I collect spores, molds and fungus.

(Ya think I've seen that movie a few times? haha)

And this is why I do not do "E-Books" (0)

denis-The-menace (471988) | about a year ago | (#43930415)

PDF yes.

E-Books? too expensive and locked to a "reader". (Kobo, etc)

In 5 years, that "e-book" is a useless file.
My money is long gone and I can't sell it or even give away the "E-book".
Giving it away could be illegal (WTF!)

"Right to read" was a prophecy of doom but it's becoming reality.

Re:And this is why I do not do "E-Books" (1)

Ralph Spoilsport (673134) | about a year ago | (#43930587)

Do what I do - covert them to pdf or epub. There are lots of ways to do that.

Re:And this is why I do not do "E-Books" (3, Informative)

MrHanky (141717) | about a year ago | (#43930651)

Cracking the DRM and converting between epub and mobi is trivial. PDFs suck on e-readers, and tablets suck for reading.

Re:And this is why I do not do "E-Books" (1)

lister king of smeg (2481612) | about a year ago | (#43930709)

calibre seemes to be able to convert them all fairly well to pdf though I perfer epub or .html.zip

Here, have a real article (5, Informative)

RyoShin (610051) | about a year ago | (#43930437)

The link in the summary is /. masturbation, so here's the Reuters article [reuters.com] that it links to, no extra ad impressions needed. (wtf is "Slashdot Cloud"?)

Re:Here, have a real article (2)

Solandri (704621) | about a year ago | (#43932335)

Here's the DOJ site for the case [justice.gov] and the DOJ court filing [justice.gov] .

The court doc has a dramatic graphic which shows you exactly what happened to ebook prices [mediabistro.com] while this was going on. All the colored lines are publishers who conspired with Apple to switch to agency pricing the first week of April 2010, except for Penguin (beige) who switched the end of May. The two grey lines are publishers who stuck with wholesale pricing (Random House and other non-majors).

Lose, Lose (3, Insightful)

Logger (9214) | about a year ago | (#43930679)

When Amazon says that they'd like to sell some books below wholesale, and claims that the agency model prevents that, they are lying their asses off. They could easily get around that restriction. The simplest way being by offering an account credit on certain books. The problem with that approach from Amazon's perspective is that it would reveal how large the subsidy is. Doesn't matter to the consumer, but it is competitive information they wouldn't want public.

On the other hand, if the agency model prevents Amazon from negotiating a different wholesale price than Apple pays, then that is collusion. I'm not sure it rises to the level of needing a government crackdown, but it is slimy none the less.

And the flip side of this is that Amazon of course would be happy to subsidize book sales and Kindles to drive people to the Amazon store to buy other things. Which in turn could have the anti-competitive effect of making tablets from Apple, Samsung, and others over priced by comparison and push them out of the market.

It doesn't matter which way the courts rule on this one, the consumer loses.

Re:Lose, Lose (1)

countach (534280) | about a year ago | (#43931405)

The agency model for Apple doesn't prevent Amazon from negotiating a different wholesale price to Apple. It's just that once they've done so, if they choose to sell it at a lower markup to Apple, Apple can effectively go back to the publisher and get a further discount. It's not collusion unless Apple and Amazon lock themselves in a room and work all this out.

Re:Lose, Lose (0)

Anonymous Coward | about a year ago | (#43932601)

The collusion is between the publishers and apple. and it definitely IS collusion. apple automatically gets the rights to the reduced price if amazon try to undercut them, thus removing market competition based on price as Apple are assured of always receiving the best price while still maintaining margin. This is bad for consumers and really really bad for any business that wants to compete on price.

Wait MONOPOLY what? (0, Redundant)

Anonymous Coward | about a year ago | (#43930759)

> Macmillan has a monopoly over their own titles

That's not a monopoly. Wait, I guess Disney has a monopoly on a single Mickey Mouse statue, amirite? Amazon scumbag lawyers.

Not to defend Apple, but... (2, Informative)

webdog314 (960286) | about a year ago | (#43930807)

Amazon's model isn't much better. They make their money by setting the price for a best-seller high, and everything else ridiculously low. And this seems reasonable to a "supply and demand" society, but there's an endless supply of ebooks. More over, that means that authors aren't going to make enough money to keep writing unless they happen to have a best-seller - and the market ends up flooded with garbage like Twilight and 50 Shades of Grey. It's a CostCo mentality. The consumer doesn't know any better, and hey, they're getting most of their books for 99 cents! Seems great from their perspective. But that model kills publishing in general. Anyone who thinks the only cost to publishing a book is the time it takes to write it, has never published a book. Even for a bare-bones self-published ebook, you need at the very least an editor. For anything serious, or that crosses over into the print world, then you need a cover artist, a designer, marketing, and probably someone who knows how to bring it all together... they call those people publishers.

Have you seen the absolute garbage that gets "self published" on Amazon? The ability to put a book out there on Amazon's site *for free*, is perhaps the biggest danger to the publishing industry ever. There are thousands upon thousands of "books" that are nothing more than $.99 scams. Some are literally garbage text or word for word rip off's of someone else's work with a new title. They might only get a few suckers, but they do this *thousands* of times over.

Re:Not to defend Apple, but... (4, Interesting)

ducomputergeek (595742) | about a year ago | (#43931283)

And it also opens up opportunity. I have one friend who elected to do Amazon self-publishing. Ended up on Good Reads and got some glowing reviews, about 30 last I checked, and has sold 6k of his first book. He just released his second book and a collection of short stories and talking with him over memorial day he's made about $16k so far this year. Much better than the $5,000 advance the publisher offered and he would have had to do his own marketing anyway. That doesn't sound like much, but his wife makes $30k a year and he makes around $50k. An extra $16k with two young kids makes a difference.

They're Hurting Themselves (2)

Philotomy (1635267) | about a year ago | (#43930997)

The relatively high price of many e-books drastically reduces the number of e-book purchases I make. I'd be much more inclined to purchase more e-books if they were more reasonable (especially since what you're purchasing is usually more like a license to read it, rather than owning a permanent copy of the work). One side-effect is that I've purchased more self-published or small-publisher e-books than I would have otherwise.

the entire market is inflated and rigged (0)

Anonymous Coward | about a year ago | (#43931221)

For centuries we had Libraries where people didn't have to buy books. This was because books were had printed and insanely expensive.
Then the printing press and modern book binding was invented and books became distributable.
Then cheap high volume printing happened and books became... cheap.
Anyone could own one. Woah! Now instead of selling to the wealthy, Universties and Libraries you can sell to ANYONE.
And people will PAY good money for them. Then in the 60's and 70's and something started to happen. Printing and publishing got cheaper and cheaper and distribution started getting wider and wider and people started thinking that new books are better than old books ( in Fiction anyway )
Why go to the library when you can buy your own? It's a New York Times Best Seller! ( which translates somehow to "it's good" )
Then in the 80's and 90's publishers realized that you have to sustain the image of a book being valuable and even rare... you start seeing $30 and even $40 hardbacks with $10 paperbacks. All the while, the actual cost to produce the books gets less and less.

Now the cost of creating an ebook and distributing is is next to nothing... there's an initial infrastructre investment necessary, but it does even remotely approach the cost of packing and shipping physical books.

So the publishers are riding out the fact that you *think* books should cost more money because that's what books cost. You pass up that $5 Bluray of Terminator 2 at Bestbuy, but you'll buy any number of $9 Kindle titles. Because... you know.... books are expensive.

Amazon Strong-armed? (0, Redundant)

Anonymous Coward | about a year ago | (#43931227)

I have a hard time believe amazon was being strong-armed by anyone, let alone book publishers.

I work for magazine publisher (top 25 on amazon's digital editions) and we are constantly being push around by amazon and have very little say in how our magazine is presented, reported, priced, etc.

Re:Amazon Strong-armed? (1)

viperidaenz (2515578) | about a year ago | (#43931595)

I would say Macmillan is a little bit larger than your magazine publisher.
They're 170 years old, have offices in 41 countries and in 2010 their parent company had revenue over 2.2 billion euros. 10% of that was digital media.

Burn the Books :-) (0)

Anonymous Coward | about a year ago | (#43931355)

I read more ,purchase more ebooks then i ever did paper books. I love Amazon that they have lots of great books from Idie authors that might have never seen light of day otherwise. I feel that if the big publishers cannot keep up there will just be less of them. I am just not going to purchase a ebook for 14.99.

First Sale? (1)

viperidaenz (2515578) | about a year ago | (#43931541)

What happened to that old thing?
The publisher sells to Amazon and should have absolutely no say in the price Amazon then charges when they resell it. It's not the publishers concern as to how much profit/loss Amazon make. Anything otherwise is pretty much the definition of price fixing.

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