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Old 05-16-2012, 07:35 AM   #1
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French culture minister: "Allowing publishers to fix prices is best"

http://www.thebookseller.com/news/mi...k-pricing.html

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Outgoing French culture minister Frédéric Mitterrand has written to European Competition commissioner Joaquin Almnunia warning that investigations now underway could foster predatory book pricing by powerful distributors such as Amazon, the French trade publication Livres Hebdo has reported.

Allowing publishers to fix prices has proved to be the best way of preventing a single player from imposing its economic model in the United States and Europe, and has permitted them to reduce e-book prices to levels that “reconcile the legitimate interests of the consumer and a fair remuneration for creation”, he said.
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Old 05-16-2012, 08:12 AM   #2
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How is allowing a single player* to impose its economic model the best way of preventing a single player from imposing its economic model? I don't understand.

*OK, a group of six, acting as a single player.
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Old 05-16-2012, 10:11 AM   #3
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If the big six wish to price their ebooks at 12.99 or 15.99 American, who are you or Amazon to say that they cannot?

ebooks do not need to be stored, or shipped, it definitely should be up to the creator to set their price for books, if prices need to be set at all.
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Old 05-16-2012, 10:19 AM   #4
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Thats fine for france however thats not fine for this side of the pond.

Last edited by jbcohen; 05-16-2012 at 10:22 AM.
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Old 05-16-2012, 10:25 AM   #5
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If the big six wish to price their ebooks at 12.99 or 15.99 American, who are you or Amazon to say that they cannot?
Creators have always had the ability to set their prices - even under the wholesale model they had the ability to price their books however they wanted. They didn't have the ability to set the final retail price, but they could set their wholesale price however high or low they wished. However, there is always a risk that if the price is too high - they will have few sales.

Authors in turn also have the ability to set their prices. They can accept the publishing contracts offered to them, try to negotiate more, or self-publish. Again, there is always a risk that if their price is too high, nobody will buy.

The fuss is over whether they have the ability to collude on their prices and to prevent the retail channels they utilize from competing at a price level.
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Old 05-16-2012, 10:29 AM   #6
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Thats fine for france however thats not fine for this side of the pond.
Actually, I do believe there's no law against it in the US, either. The issue here is that the publishers colluded with each other to fix prices. If they had independently decided to sell ebooks at fixed prices there wouldn't be a lawsuit right now.
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Old 05-16-2012, 10:49 AM   #7
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Originally Posted by ilovejedd View Post
Actually, I do believe there's no law against it in the US, either. The issue here is that the publishers colluded with each other to fix prices. If they had independently decided to sell ebooks at fixed prices there wouldn't be a lawsuit right now.
The problem, as pointed out by the judge in the class-action lawsuit, if *one* vendor did it, they would lose more in sales to competitors that don't than they would gain by ripping off the unwary. That is why Penguin and co went after B&N to "punish" Random House and eventually "forced" them to join the gang.

(Remember the debate, just before the DOJ filing, that Agency Pricing was *helping* Amazon as well as small and medium, non-agency publishers?)

The problem is the US has a 60-year history of consumerism and there is an instinctive rejection of anything that openly and explicitly sacrifices consumer rights for corporate profits. It still happens more than it should (i.e., zero) but you get more than a few rebellions. American consumers do not willingly submit to shearing. Just ask Bank of America:
http://www.washingtonpost.com/busine...gcM_story.html
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Old 05-16-2012, 11:24 AM   #8
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Originally Posted by ilovejedd View Post
Actually, I do believe there's no law against it in the US, either. The issue here is that the publishers colluded with each other to fix prices. If they had independently decided to sell ebooks at fixed prices there wouldn't be a lawsuit right now.
There are several problems. Several areas.

One is the publishers getting together to decide on how much they are going to sell items (anything) for. That is the old anti-trust problem. Collusion. Anti-competitiveness. Two oil company CEOs going golfing on Sunday and deciding what the price of gas at the the pumps is going to be on Monday is the usual example.

Second is the publishers saying that Amazon or anyone else can't sell a book for 9.99 even if Amazon loses money because it cost 14.99 to buy the book directly (retail) from the publisher. (Actually Amazon probably didn't lose money because the wholesale price was about 9.99) The problem for the publishers was essentially many fold.
1. The independent books stores couldn't compete on price.
2. People became used to books being priced at 9.99 and becoming reluctant to pay a larger amount.
3. Amazon and other online giants get bigger and bigger and the publishers just become book printers and binders for the paper books.
4. The eBook pricing becomes less and less connected to the paper book pricing. [[The publishers have worried about this from day one because they don't want this obvious idea to become rooted in the public mind.]]
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Old 05-16-2012, 11:49 AM   #9
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Collusion aside, there is really no logical reason why the wholesale pricing model should be applicable to digital media. Eventually, I think the logic of the agency price model will become the standard with regard to digital media.
A related question: is a book more like a commodity (potato chips,industrial widgets) or more like a work of art?

If a book is more like a commodity, then the wholsale model makes more sense, and allowing unrestricted price competition would be preferred.
If a book is more like art, then the agency model is better.
The truth is that some books are commodities ( your typical paranormal romance, for example) and others (like Robert Caro's multivolume biography of LBJ )are more like works of art.
From a societal point of view, there is a case for preserving the sort of structures that make the publicatiion of a Robert Caro opus more likely, or even possible.

Last edited by stonetools; 05-16-2012 at 12:20 PM.
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Old 05-16-2012, 11:59 AM   #10
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There is no collusion aside. That is the case. It is not that the Agency Model was illegal. It is that the BPH and Apple colluded to bring the Agency Model into play.

The Agency Model can still be used it is just that they cannot get together over email and dinners and phone calls and choose how to price books.
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Old 05-16-2012, 12:43 PM   #11
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We used to have a similar thing with real books in the UK, they had to be sold at the cover price and nobody was allowed to discount them (except 2nd hand or remaindered ones). But then they abolished it in the name of increasing competition and we ended up with just 1 or 2 chain stores instead of thousands of independent ones.

Unpopular from a consumer point of view, but he's actually right. Without a fixed price, competition will decrease. History shows us that.
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Old 05-16-2012, 12:48 PM   #12
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AS long as the price is low, I am not worried about competition. If you end up with a few stores and low prices, than goodie. If you end up with a few stores and higher prices than boooo.

AS a consumer, I care about the price. I don't want to pay more for a book so that more stores are open.
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Old 05-16-2012, 12:48 PM   #13
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Unpopular from a consumer point of view, but he's actually right. Without a fixed price, competition will decrease. History shows us that.
Precisely. Many European countries have fixed pricing for books on the grounds that, while it may perhaps be better for the individual consumer to have unrestricted competition, it makes society as a whole a lot poorer. Every shopping street in Britain used to have its independent bookseller; today we just have Waterstones. Does being able to buy the latest trashy bestseller half price in a supermarket make up for the loss of the small book shop? I'm not so sure it does.
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Old 05-16-2012, 12:50 PM   #14
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If I can get the books I like at Waterstone, I don't care.

I bought books at Independent book stores when they were out there and close. It was a good experience, they were great about ordering books for me and the like. I bought books at the big chain stores, Borders and BN, they were ok but I rarely needed to special order books because they had them. I order books from Amazon and am doing just fine.

As a consumer, I care about the quality and the price. I am not worried about the type of store that I am supporting.
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Old 05-16-2012, 12:52 PM   #15
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There is no collusion aside. That is the case. It is not that the Agency Model was illegal. It is that the BPH and Apple colluded to bring the Agency Model into play.

The Agency Model can still be used it is just that they cannot get together over email and dinners and phone calls and choose how to price books.
What the French Minister is saying is that in effect, such collusion should be legal in order to promote a higher societal good than cheaper books.
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