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Amazon: Publishers Strong-Armed Us On E-Books 171

Posted by timothy
from the fruit-vendor-is-just-a-front dept.
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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Amazon: Publishers Strong-Armed Us On E-Books

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  • by h4rr4r (612664) on Thursday June 06, 2013 @05:23PM (#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.

    • by Anonymous Coward on Thursday June 06, 2013 @05:27PM (#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.

      • by Nyder (754090) on Thursday June 06, 2013 @06:06PM (#43930547) Journal

        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.

        • by CodeBuster (516420) on Thursday June 06, 2013 @11:01PM (#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).

      • by raehl (609729) <raehl311 AT yahoo DOT com> on Thursday June 06, 2013 @06:14PM (#43930625) Homepage

        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: (Score:2, Insightful)

          by Anonymous Coward

          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."

          • by NatasRevol (731260) on Thursday June 06, 2013 @06:37PM (#43930809) Journal

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

          • by BronsCon (927697) <social@bronstrup.com> on Thursday June 06, 2013 @06:42PM (#43930847) Journal
            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.
          • Explain why The Grapes of Wrath is $9.99 for the Kindle.
            • Re: (Score:2, Troll)

              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.

          • 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."

            It is exactly the same issue in restaurants. You are paying for the food, but the preparation and serving and cleanup is what costs money. Food is the cheapest cost in a restaurant. Printing is a standard same-cost operation now. Editing and marketing are not.

        • 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.
        • by swillden (191260)

          but books are copywritten

          FYI, you mean "copyrighted".

          • by Quirkz (1206400)

            I'm starting a movement to have it changed to "copywrought" because I think it sounds nicer.

        • by travbrad (622986)

          They may set their price to maximize profits, but in some cases I'm not sure that is actually what they are achieving. By making a product cheaper you will also generally sell more of that product (whether it makes up for the lower prices depends on a lot of factors). Just look at PC game download services like Steam (or ironically Amazon). They have regular prices most of the time, but have occasional sales to attract buyers who wouldn't have otherwise bought the games. For example I recently picked up

      • by Anonymous Coward on Thursday June 06, 2013 @06:29PM (#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. :/

      • So consumers buy anyway.

        Not me.

      • by jader3rd (2222716) on Thursday June 06, 2013 @07:02PM (#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.

      • 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 fil

        • 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.

          I find that I don't go to the movies as much as I used to. Every time a movie comes out that I want to see, it seems that it is gone from the theater before I get some free time. So, I buy the Blu-Ray when it is released at the $20 to $24 price. However, it has to be a movie that I know that I will see multiple times over it's lifetime. Movies that I don't plan on watching more than once will be rented at Red Box for $2.25 or watched on HBO, etc.

          • by suutar (1860506)
            I'm reaching the point where even if I'm pretty sure I'll watch it again I don't buy it til the second viewing, because sometimes I'm wrong. I have discs bought years ago that are still wrapped because I loved the movie in the theater but haven't pulled it back out. (At least one of those, however, I have watched since... on netflix streaming.)
            Plus if I don't buy them I have something to put on birthday/xmas lists so my wife/mother can't say I'm impossible to shop for :)
    • by PhrostyMcByte (589271) <phrosty@gmail.com> on Thursday June 06, 2013 @05:44PM (#43930309) Homepage
      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.
      • 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.
        • by BronsCon (927697) <social@bronstrup.com> on Thursday June 06, 2013 @06:48PM (#43930879) Journal
          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?
        • by sjames (1099)

          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: (Score:2, Funny)

            by Lodlaiden (2767969)
            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.
            • by tibman (623933)

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

              • by Znork (31774)

                The gp was of course joking. However, the correct action when selling more of something is indeed to raise the price or you're not maximizing your profit. (You don't raise prices because you need to, you raise them because you can).

                In a free market someone else would then enter the market, undersell you and take part of the profit. In a monopoly market with copyrights that won't happen, which means you can keep raising prices, preferably combined with sinking a lot of the revenue into marketing which will b

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        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 ed

      • by ducomputergeek (595742) on Thursday June 06, 2013 @07:00PM (#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.

    • by Zerth (26112) on Thursday June 06, 2013 @05:48PM (#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.

    • by steelfood (895457) on Thursday June 06, 2013 @05:49PM (#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.

    • 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

    • 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.

    • by MattW (97290) <matt@ender.com> on Thursday June 06, 2013 @07:26PM (#43931155) Homepage

      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.

    • by drinkypoo (153816)

      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.

    • Because the publishing cost of a $14 plain bestseller is about $3. The rest goes to the author, publisher and reseller. So a few dollars off is reasonable... Amazon selling $14 books for $3 was NOT reasonable.

      It's insulting that people only think of the lowest cost, not the VALUE of something. Amazon was tying sales of ebooks to sales of paper books.. Then eating a big LOSS. That's not entirely legal when they do it to ALL the publishers on the FIRST day of release. That's an ILLEGAL MONOPOLY -making tactic

    • by Telvin_3d (855514)

      Why pay hardcover price for an ebook? Because you get it same day the hardcover comes out. If you want to pay paperback prices, wait a couple years for the paperback to come out and the ebook prices typically drop at the same time.

      How much of a hardcover price do you really think is physical costs? A 400 page hardcover is equivalent to 100 pages of double side letter paper. I can print that for 5c a page (or less) on a decent laser printer. So as a guy with basic consumer equipment my costs for for printing

      • by stdarg (456557)

        Why pay hardcover price for an ebook? Because you get it same day the hardcover comes out. If you want to pay paperback prices, wait a couple years for the paperback to come out and the ebook prices typically drop at the same time.

        According to this [nytimes.com] it used to be about 1 year, and has actually decreased due to pressure from ebooks.

        But really, even when paperbacks are out, it often costs more for an ebook today than the paperback version, which is ridiculous and probably what OP was referring to, not paying cheaper-than-paperback prices on release day.

        How much of a hardcover price do you really think is physical costs? A 400 page hardcover is equivalent to 100 pages of double side letter paper. I can print that for 5c a page (or less) on a decent laser printer. So as a guy with basic consumer equipment my costs for for printing a hardcover book are $5 or less. Of course, a publishing house can do it for less. On a big run, I suspect their costs for printing, binding and shipping combined probably don't top that same $5.

        Okay you've covered printing costs. You're forgetting major costs like physical distribution and storage which are nearly free for ebooks. Then the overhead at every retailer for physica

        • by suutar (1860506)
          I'm surprised. I would have thought typesetting for an item which can get displayed on essentially an arbitrary size/shape "page" would be more work than for a fixed target. But I would find it very hard to attribute the 30 cent difference entirely to cover design. Thanks for the pointer.
    • 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.

      Well, it helps to understand that to a book publisher, the reason for having hardbacks and paperbacks has little or nothing to do with the costs of the physical copies. It's just a reader-palatable substitute for breaking the market into two groups: readers who will pay a lot for a copy of the book immediately, and readers who will pay less and are not in a rush. If not for the tradition of publishing books in different formats, and concern over how well people would take it, I'm sure they'd be happy to rel

      • Why does it cost more to see a first-run movie at the theater than it does to see it at the dollar theater 3 months later?
        It's the same exact film I'm watching.

        Why does it cost more to buy a dvd or game the first day it is released than it does to buy the same dvd or game 6 months later?
        Asking questions like that help you answer questions about the cost of entertainment thingamajigs.
    • by Phoghat (1288088)

      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.

      Google magazines sometimes wants double what a print version costs

  • by ackthpt (218170) on Thursday June 06, 2013 @05:24PM (#43930083) Homepage Journal

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

    Well, e-books anyway.

    Dead trees are still highly variable.

    • by h4rr4r (612664)

      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.

      • by crutchy (1949900)

        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) i

        • 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 oth
          • 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%.

      • 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.
      • by gutnor (872759)

        They did it by agreeing the level of production each OPEC member was allowed to produce. Most visible they caused the oil crisis, see http://en.wikipedia.org/wiki/1973_oil_crisis [wikipedia.org] and others later.

        Over the time, after the various oil crisis, western governments started to find other OPEC free source of oil, so OPEC influence started to decrease somewhat. Since 2004-ish, the influence of OPEC is greatly reduced. We are at peak capacity and not producing enough oil, so the relationship between controlling t

    • by Anonymous Coward

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

  • by Anonymous Coward
    Is it just me or is everyone doing mental calculations of how many books I should pirate to get my money back?
  • 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 s
    • Re:grow some balls (Score:4, Insightful)

      by _UnderTow_ (86073) on Thursday June 06, 2013 @05:36PM (#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".
      • And anyone who doesnt want a Neal Stephenson book should be tarred and burned.
    • by Anonymous Coward

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

    • by PRMan (959735)
      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 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 o

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

    Long live the all holy business model.
  • by RyoShin (610051) <tukaro AT gmail DOT com> on Thursday June 06, 2013 @05:56PM (#43930437) Homepage Journal

    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"?)

    • by Solandri (704621)
      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 (Score:3, Insightful)

    by Logger (9214) on Thursday June 06, 2013 @06:21PM (#43930679) Homepage

    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.

    • by countach (534280)

      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.

  • by webdog314 (960286) on Thursday June 06, 2013 @06:37PM (#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.

    • by ducomputergeek (595742) on Thursday June 06, 2013 @07:48PM (#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.

      • by webdog314 (960286)

        Certainly it can be done, and frankly, I think the publishing industry in general must change the way it does things or it's dead in the water. But most of publishing is about getting seen by the right people. You can do that as an author if you have the time (it takes gobs!), and most publishing firms do a crappy job of this anyway. Just like Amazon, they are going to put their real money and time on the books that they know will sell. If you're a first time author (or even mostly unknown) then you get a m

    • sorry but you applied the concept of "supply and demand" to two different things.

      There is the supply and demand of actual books, whether paper or electronic.
      However, books are entertainment and in the entertainment biz, the big demand is for a supply of "newness."
      We pay more for brand-new titles than for stuff that's not quite so new anymore.
  • by Philotomy (1635267) on Thursday June 06, 2013 @07:02PM (#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.
  • 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.

    • Re:First Sale? (Score:4, Insightful)

      by rahvin112 (446269) on Friday June 07, 2013 @03:10AM (#43933467)

      That's exactly what Apple wanted to kill. Amazon was willing to sell eBooks with 5% profit margin because it cost them nearly nothing to sell them. Apple wanted 30% and they saw an opportunity to raise the prices and get more profit for Apple and the publishers. The 5 Publishers that have settled with the government all had record profits after they colluded with Apple to fix prices.

      The funny thing is this is ALL in the emails, the intent to raise prices marketwide. The intent to limit competition so Apple could gain marketshare without price competition. The intent to raise prices more than the 30% margin so the publishers could rake in even more money than they do on paper books. It's all there, the government has all the evidence and that's the reason the Publishers all settled after denying they would. The publishers lawyers took one look at all the information the government has and told the publisher to settle or they would get killed in court.

      Price fixing is illegal and if the government has the evidence to prove it you will get nailed. The reason you see so few prosecutions is the government rarely has good documentation, the collusion is often done orally behind closed doors with no notes or records of the conversation. Job's probably believed he had enough chutzpah to avoid a prosecution or he believed he was above the law. He was an egotistical asshole that didn't give a rats ass about ordinary people.

  • Don't get me wrong... Agency has downsides. Lots of them. It's tremendously annoying that there are no sales on Agency books. Kobo (my preferred store) gives out lots of discount codes, but they're of limited use because they don't apply to Agency books. And those publishers that choose to price their ebooks above the paperback price are extremely frustrating (although a few of them seem to be getting a clue. Tor, for example, prices Robert Jordan's Wheel of Time books at a decent discount from paperback. D
  • This coming from the company trying to monopolise e-books so they can strong-arm publishers.

You know, the difference between this company and the Titanic is that the Titanic had paying customers.

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