MobileRead Forums - View Single Post - Amazon/B&N/Kobo can once again discount ebooks from the 3 Publishers starting June 10

Top100EbooksRank · 05-31-2012, 08:38 AM

http://www.teleread.com/chris-meadow...e-fixing-suit/

There’s some fascinating stuff here. For example, from pages 30-31 of the ruling, the judge explains why collusion is so probable. It’s a classic “prisoner’s dilemma” scenario: if each individual publisher hadn’t known it could count on most of its competitors to move to agency pricing as well, it would have made little sense for it to do so alone:

------"The costs of such a unilateral switch to the agency model would be substantial. The publisher would be selling its eBooks at a higher price than its competitors and would therefore be losing market share. This loss in market share would in all likelihood have been large. Random House gained significant market share from the Publisher Defendants during the months between their adoption of the agency model and Random House’s capitulation. The eBook sales by Random House increased 250 percent in 2010 as it continued to sell them at $9.99. At the same time that an individual publisher would be losing market share, it would be taking in less revenue per sale because of Apple’s 30 percent commission. In addition, the publisher would probably lack the leverage to force Amazon to accept the agency model. Potentially, then, this publisher would be barred from selling its eBooks to Amazon."-------------

Basically, if 2 Publishers are pricing books at $12.99 and $14.99 (agency) and the other 4 Publishers's books are priced at $9.99 (wholesale), guess which publishers will gain market share and which will lose marketshare. That's why the publishers who are on agency will be at a disadvantage.

When the settlement takes place on June 10, it will be

Penguin, Macmillan, and Random House*: agency pricing
Simon & Schuster, Hachette and HarperCollins: wholesale pricing

*Random House can switch to wholesale if it wants (not part of DOJ lawsuit or settlement).

05-31-2012, 08:38 AM	#5
Top100EbooksRank Banned Posts: 304 Karma: 6102528 Join Date: Mar 2012 Device: Kindle	http://www.teleread.com/chris-meadow...e-fixing-suit/ There’s some fascinating stuff here. For example, from pages 30-31 of the ruling, the judge explains why collusion is so probable. It’s a classic “prisoner’s dilemma” scenario: if each individual publisher hadn’t known it could count on most of its competitors to move to agency pricing as well, it would have made little sense for it to do so alone: ------"The costs of such a unilateral switch to the agency model would be substantial. The publisher would be selling its eBooks at a higher price than its competitors and would therefore be losing market share. This loss in market share would in all likelihood have been large. Random House gained significant market share from the Publisher Defendants during the months between their adoption of the agency model and Random House’s capitulation. The eBook sales by Random House increased 250 percent in 2010 as it continued to sell them at $9.99. At the same time that an individual publisher would be losing market share, it would be taking in less revenue per sale because of Apple’s 30 percent commission. In addition, the publisher would probably lack the leverage to force Amazon to accept the agency model. Potentially, then, this publisher would be barred from selling its eBooks to Amazon."------------- Basically, if 2 Publishers are pricing books at $12.99 and $14.99 (agency) and the other 4 Publishers's books are priced at $9.99 (wholesale), guess which publishers will gain market share and which will lose marketshare. That's why the publishers who are on agency will be at a disadvantage. When the settlement takes place on June 10, it will be Penguin, Macmillan, and Random House: agency pricing Simon & Schuster, Hachette and HarperCollins: wholesale pricing Random House can switch to wholesale if it wants (not part of DOJ lawsuit or settlement). Last edited by Top100EbooksRank; 05-31-2012 at 08:51 AM.