Quote:
Originally Posted by darryl
@pwalker8. I dealt with neither and haven't looked into at all until just now. As I understand it:
B&N acquired Fictionwise on March 5 2009 and announced grand plans for it as part of B&N's "digital strategy". It would seem that Fictionwise had been doing quite well up until that time.
Amazon gave in to Macmillan on 31 January 2010, and the operation of the price fixing conspiracy took effect then or shortly thereafter.
In March 2010 Fictionwise discontinued its Buywise club, giving no reasons for its decision. It seems logical that a club offering discounts on Big 6 titles would no longer be able to do so under agency, and the club was likely discontinued for this reason, though no reason was in fact given.
In November 2012 Fictionwise announced it was "winding down its business".
Books on Board stopped selling ebooks in early 2013. Bob Livosi, the owner, blamed both the deep pockets of his larger competitors and the lingering effects of agency. So far as agency is concerned he pointed not to the end of discounting but to the way the switch was handled. To quote from the article in Publishers Weekly at https://www.publishersweekly.com/pw/...ook-sales.html:
From my brief examination I see nothing in the timeline to justify a conclusion that the dates don't support JSWolf's comments in #57. Certainly they don't establish conclusively that agency was to blame for the demise of both companies. However, they are certainly consistent with this being the case. Based on the little research I have now done I tend to the opinion that agency played a large though not exclusive role in the demise of Books on Board. Fictionwise, as part of B&N, is a more difficult case. It's future was dependant on B&N's plans for it, and the direct cause of its demise was clearly an internal decision by B&N that Fictionwise no longer had a part to play in its "digital strategy". To what extent agency played a role in this it is difficult to say. I tend to the opinion that it was pretty well doomed from the time it became part of B&N. Had it remained independent agency would likely have played a large role in bringing it down anyway, especially given its reliance on its Buywise club. |
I think you need to recheck your timelines. According to the court case, Apple didn't contact the publishers to start talks until December 9th, 2009. B&N bought Fictionwise 10 months earlier apparently to fold into their upcoming ebook store, a fairly common strategy. My understanding is Fictionwise was purchased for their customer base, not for their business model or actual store. Kobo did the same thing later with the Sony store.
Apple initially started with the suggestion of a couple of price points, which is how iTunes music worked. The publishers balked and Apple eventually suggested the Agency model. Amazon learned about the upcoming deal on January 18th, 2010 and complained to the FTC about it on Jan 31st. Amazon didn't have an agency agreement with the publishers until later in the spring.
Frankly, Amazon's pricing probably had a lot more to do with those stores going belly up than any future Apple "collusion". At that time, the stores were welcome to charge whatever they liked, but were charged a specific price by the publisher based on the suggested retail price. Amazon sold some books for less than they had to pay the publishers and many others at a very small profit. This is called a loss leader and is used to build market share.
I suspect that Amazon thought that they could use their 90% market share to squeeze the publishers into reducing the price Amazon was charged, a tactic they tried after the ruling. It didn't work due to the outcry when word of their squeeze play hit the news. One could argue that the news outcry against Amazon in favor of the publishers lead to Bezos buying the Washington Post in 2013.
Since Amazon has much deeper pockets than the smaller ebook stores, they could out last them. Thus you see Fictionwise selling themselves to B&N in March of 2009.
Books on Board never used the agency book model. When the agency model came around, they stopped carrying the big 5 books. Their issue was lack of capital. Their owner was quoted as saying he just couldn't compete with the deep pockets of Amazon, Apple and B&N.
The agency model drove us out of business narrative was mostly an attempt to get into Apple's deep pockets. Several of the small ebook stores tried to sue Apple making this claim. They lost the case in court.