Judge Approves Settlement In eBook Price-Fixing Case 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.'"
Re:below cost? (Score:3, Informative)
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? (Score:5, Informative)
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? (Score:5, Informative)
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:Boohoo your old buisness model is obsolete. (Score:5, Informative)
Re:Will this result in lower prices? (Score:5, Informative)
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:Low margin high volume (Score:4, Informative)
I'm an author myself and haven't look at Amazon's policies but from discussions with others who have and are using them, I'm seriously considering it simply because I can make more money in the long run through them then one of the big name publishers.
The key element is what I as a new (unknown) author would be offered for a new book (about $0.02 per copy sold - maybe 5k books advanced). Sure sounds like lots of money but that's a meager $10,000 advance and may be the only funds I ever see for a book where as with amazon, I can price things where I feel confident the market will at least buy some and get the bulk of the money (75-85 percent) from each sale, meaning if I sell 1k copies in a year, I've made almost as much as the advance fee from the big name publisher and the income may continue coming in should the book continue selling unlike the big name, who may only print 1k copies and never promote or even sell them simply to tie me up in a contract. (I know one hell of a run on sentence). In other words, does Amazon make sense for me as a new/unknwon author and the answer is "Damn good possibility".