MobileRead Forums - View Single Post - Barnes & Noble claims price fixing settlement will raise e-book prices

Top100EbooksRank · 06-08-2012, 04:28 AM

How can Barnes and Noble lose money on selling ebook when

1) it is forbidden to sell a publisher’s “entire catalogue at a sustained loss.” (SEE BELOW)
2) makes good margin on agency from the 3 Publishers that still use agency
3) makes good margin on other ebooks (smaller publishers, self-publishing etc..)

http://paidcontent.org/2012/04/16/wh...r-readers-now/
Some limits

Amazon cannot now, for example, make every single HarperCollins title it carries free (even if it were inclined to do so). When it comes time for Simon & Schuster, HarperCollins and Hachette to negotiate their new contracts, the settlement allows them to “negotiate a commitment from an e-book retailer that a retailer’s aggregate expenditure on discounts and promotions of the Settling Defendant’s e-books will not exceed the retailer’s aggregate commission under an agency agreement in which the publisher sets the e-book price and the retailer is compensated through a commission.” The settling publishers can also negotiate one-year contracts that “prevent e-book retailers from cumulatively selling that Settling Defendant’s e-books at a loss over the period of the contract.”

In other words, under that type of contract, Amazon (or any other retailer who agrees to the contract) could discount certain titles as much as it wants, or give them away for free. But it could not sell a publisher’s “entire catalogue at a sustained loss.” So if Amazon and a settling publisher sign a contract that gives Amazon a 30 percent commission on each title sold, Amazon cannot discount that publisher’s entire catalogue by more than the total amount of the commission it receives.

One thing to keep in mind though: Before the switch to agency, Barnes and Noble was selling ebooks using WHOLESALE.

If they thought they couldn't compete, why did they start building the Nook 2 years before agency was implemented? They knew they could compete because they have 1 huge advantage over Amazon. Their physical stores.

The Nook success is largely thank to that fact. Book lovers walk into a B&N and see Nook. Maybe be tempted to try it out and maybe buy one.

06-08-2012, 04:28 AM	#6
Top100EbooksRank Banned Posts: 304 Karma: 6102528 Join Date: Mar 2012 Device: Kindle	How can Barnes and Noble lose money on selling ebook when 1) it is forbidden to sell a publisher’s “entire catalogue at a sustained loss.” (SEE BELOW) 2) makes good margin on agency from the 3 Publishers that still use agency 3) makes good margin on other ebooks (smaller publishers, self-publishing etc..) http://paidcontent.org/2012/04/16/wh...r-readers-now/ Some limits Amazon cannot now, for example, make every single HarperCollins title it carries free (even if it were inclined to do so). When it comes time for Simon & Schuster, HarperCollins and Hachette to negotiate their new contracts, the settlement allows them to “negotiate a commitment from an e-book retailer that a retailer’s aggregate expenditure on discounts and promotions of the Settling Defendant’s e-books will not exceed the retailer’s aggregate commission under an agency agreement in which the publisher sets the e-book price and the retailer is compensated through a commission.” The settling publishers can also negotiate one-year contracts that “prevent e-book retailers from cumulatively selling that Settling Defendant’s e-books at a loss over the period of the contract.” In other words, under that type of contract, Amazon (or any other retailer who agrees to the contract) could discount certain titles as much as it wants, or give them away for free. But it could not sell a publisher’s “entire catalogue at a sustained loss.” So if Amazon and a settling publisher sign a contract that gives Amazon a 30 percent commission on each title sold, Amazon cannot discount that publisher’s entire catalogue by more than the total amount of the commission it receives. One thing to keep in mind though: Before the switch to agency, Barnes and Noble was selling ebooks using WHOLESALE. If they thought they couldn't compete, why did they start building the Nook 2 years before agency was implemented? They knew they could compete because they have 1 huge advantage over Amazon. Their physical stores. The Nook success is largely thank to that fact. Book lovers walk into a B&N and see Nook. Maybe be tempted to try it out and maybe buy one. Last edited by Top100EbooksRank; 06-08-2012 at 04:33 AM.