Ken Auletta Writes on the DOJ Lawsuit

[stonetools]

Highly regarded Journalist Ken Auletta has published a long article in the New Yorker on the DOJ lawsuit. I haven't read it because paywall. But a certain pundit (guess who? has an extended comment on it HERE

Some new nuggets of info:

1. In 2009, Hachette lobbied the DOJ to invesigate Amazon for predatory pricing, citing the argument that " that their copyrighted material was being used to sell Kindle devices and “drive bookstores out of business”.

2. What publishers saw, very early in the game, really, was that Amazon was aggregating customers that would soon find it difficult to get an ebook from any other source. In the parlance: their switching costs would be high. And they were the industry’s best customers.

3. Apple had stipulated to all the publishers that they wouldn’t open iBookstore unless four of the Big Six were on board.

4. A lot has been made of the fact that Apple has required the publishers to let them price-match. Now we know that Apple drove the deal. They said to the publishers, “we’ll let you set the price. as long as you don’t make us look like monkeys in relation to the print book price. But, of course, you can’t require us to sell at a price disadvantage, so you have to allow us to match any lower price.

5. Auletta reported that the publishers going to agency sacrificed significant revenue by doing so. He quoted agent Simon Lipskar praising them for being far-sighted, willing to accept a hit on their watch to build a sustainable ecosystem. He quoted a CEO who estimated that $100 million was the aggregate hit to profits in a year.

6. BN invested $200 million in delivering and launching the Color Nook.

7. The Picholine dinner in September 2008, which the DOJ identified in its complaint as the beginning of the conspiracy, took place before Apple even decided to enter the ebook business.

Shatzkin is dead set against the DOJ action , so a lot of the article is argument against the lawsuit . But the above are some of facts Auletta reported. If anuone has access to the New Yoorker article, you are welcome to add to or modify the above.

[Phogg]

Highly regarded journalist...
Beloved political ideologue...
Honored used car salesman...
Esteemed Chicago loan shark...
Respected outcall prostitute...
Generous ghetto pawnbroker...

Sometimes a posting crashes and burns in the first few words, after which it can never recover.

[jgaiser]

Come on... Both stonetools and Shatzkin think he's highly regarded. You couldn't ask for higher recommendations than that.

[tubemonkey]

1. In 2009, Hachette lobbied the DOJ to invesigate Amazon for predatory pricing, citing the argument that " that their copyrighted material was being used to sell Kindle devices and “drive bookstores out of business”.

One company doesn't drive another company out of business - customers do. If Walmart moves into a small town and three mom and pop stores close, whose fault is that? Fault rests solely on the shoulders of the town residents who abandoned the mom and pops. Blame them, not Walmart.

[vernonhaynes]

hmmm....

[tubemonkey]

Time for a snack

Spoiler:

[tompe]

Originally Posted by tubemonkey

One company doesn't drive another company out of business - customers do. If Walmart moves into a small town and three mom and pop stores close, whose fault is that? Fault rests solely on the shoulders of the town residents who abandoned the mom and pops. Blame them, not Walmart.

Walmart's, since they use there size and the resources they have to make sure that other shops have to be closed.

[tubemonkey]

Originally Posted by tompe

Walmart's, since they use there size and the resources they have to make sure that other shops have to be closed.

Are you saying they force customers to shop in their stores?

[cfrizz]

Originally Posted by tompe

Walmart's, since they use there size and the resources they have to make sure that other shops have to be closed.

BS! The plain fact of the matter is that in the end WE the consumers will always go for whoever has the lowest price that we are willing to pay. If we weren't Amazon, Walmart etc. would not exist.

Times have changed, money is tight, and the majority of us simply don't have the funds to support small, high overhead stores when we can go to Walmart and get the same thing for significantly less money.

[JeremyR]

2. What publishers saw, very early in the game, really, was that Amazon was aggregating customers that would soon find it difficult to get an ebook from any other source. In the parlance: their switching costs would be high. And they were the industry’s best customers.

This part is impossible, because the Kindle will accept non-DRMed mobi (or prc) files from anywhere.

All publishers have to do is sell books without DRM. I've personally bought more books from both Fictionwise and Baen than I have from Amazon.

But instead of doing this, Fictionwise was bought out by B&N who proceeded to try to turn it into a DRMed e-book store. But funny enough, it still seems like it's the multi-format (aka non-DRM) books that sell better, even though these mostly seem to be legacy books (titles that used to be on the store before they got bought out) or self-published stuff.

[rhadin]

You can access The New Yorker article through Worth Noting: Paper Trail — Did Publishers and Apple Collude Against Amazon?

[tompe]

Originally Posted by tubemonkey

Are you saying they force customers to shop in their stores?

No. If people always select lowest price then setting a price will of course control the customers.

[tubemonkey]

Originally Posted by tompe

No. If people always select lowest price then setting a price will of course control the customers.

In other words, people have no self control.

[crossi]

Originally Posted by tompe

No. If people always select lowest price then setting a price will of course control the customers.

Not true. It INFLUENCES the customers not controls them. I am not a robot. I choose.

[hrosvit]

Originally Posted by tompe

No. If people always select lowest price then setting a price will of course control the customers.

We all want to feel better about ourselves, so we wail and gnash our teeth about the death of local Mom & Pop stores, and blame Walmart/Amazon/Corporate Giant. The bottom line is we, the consumers, kill them. As stated, no one forces us to purchase from Amazon; we choose to because it benefits us. I don't see the problem with failing to support an business model that, in this day and age, is less efficient.