Amazon vs. Hachette Update - It's About Price

[darryl]

Originally Posted by DuckieTigger

If they are colluding and Hachette waits for the others to join in the negotiations would that not draw more attention to them colluding?

For the other publishers it would make sense to start negotiating a new contract before the old one expires. Nothing wrong with that, especially if either side or both want changes. Once an agreement is found the new can seamless transition from the old once it expires.

Or am I missing something?

I don't know why the other BWM publishers are not trying to negotiate in advance. Perhaps they will have more freedom to act when no longer bound by the old contract? As for collusion, perhaps they feel they will be able to successfully deny it just as they hoped with their previous conspiracy. They may even prove to be right, though I certainly hope not. Certainly the BWM seem to keep their secrets a little better than Apple did.

In any case, I think the proof of the pudding will be in the eating. I fully expect Hachette to avoid any agreement and ultimately see the BWM or at least most of them lining up against Amazon. I think Amazon probably expects this to, though whether it has a solution I do not know. We can all hope for wiser heads to prevail but I'm not holding my breath.

[rhadin]

Originally Posted by fjtorres

Heh.
Simple test: explain *why* I should pay *more* for a rights-limited ebook than a paperback edition.

You shouldn't, and that is one of my complaints about ebooks regardless of pricing, but that isn't the issue you raised. You said and argued on behalf of Amazon's $9.99 cap and the need to have a good excuse to go higher.

I agree with you that it should be a market issue. Hachette should price its books at whatever price it wants -- $4.99, $10.99, or $55.99, or any other number -- and I will decide whether to buy it. That is a whole lot different than Amazon deciding that Hachette should not price anything above a certain price point.

If we are in fact in agreement that the market should decide by consumers either buying or not buying a book, then we should both be in agreement with Hachette. If we think, instead, that someone other than the market or the producer of the goods should set the producer's price, then we should be in agreement with Amazon.

Neglected in that argument is the question of whether a producer should be able to set the terms under which a retailer can sell the producer's product; that is, should the producer be able to say "if you want to sell my products, it must be on an agency basis"? If we agree that a producer should have that right, then we should also be able to agree that the retailer should be able to choose not to sell the producer's products and a producer should be able to choose to not sell to a retailer.

[DuckieTigger]

Originally Posted by rhadin

Neglected in that argument is the question of whether a producer should be able to set the terms under which a retailer can sell the producer's product; that is, should the producer be able to say "if you want to sell my products, it must be on an agency basis"? If we agree that a producer should have that right, then we should also be able to agree that the retailer should be able to choose not to sell the producer's products and a producer should be able to choose to not sell to a retailer.

Those 3 questions are irrelevant. Because their answer is yes, yes, and yes. The problem for Hachette is that they drew the short straw. They have to renegotiate first with Apple soon, independently. Apparently they want to keep agency pricing. To keep agency pricing they have to do so on Amazons terms, not theirs. And who is to say that the other publishers are not going to laugh their behinds off and take the better deal with abandoning the agency pricing. They could single handedly cut Hachette out of the herd. And why shouldn't they?

Like you said, let the market work it out.

[pwalker8]

Originally Posted by DuckieTigger

Those 3 questions are irrelevant. Because their answer is yes, yes, and yes. The problem for Hachette is that they drew the short straw. They have to renegotiate first with Apple soon, independently. Apparently they want to keep agency pricing. To keep agency pricing they have to do so on Amazons terms, not theirs. And who is to say that the other publishers are not going to laugh their behinds off and take the better deal with abandoning the agency pricing. They could single handedly cut Hachette out of the herd. And why shouldn't they?

Like you said, let the market work it out.

Mostly what would keep them from doing that is the understanding that Amazon will happily screw over the publishers. All the publishers understand that keeping the agency pricing is in their best interest. You assume that Amazon has the whip hand, but the only thing that gives Amazon the whip hand is the ability to run to Judge Cote crying about collusion again. That may not be so easily this time, with the press and appeals court watching.

[DuckieTigger]

Originally Posted by pwalker8

Mostly what would keep them from doing that is the understanding that Amazon will happily screw over the publishers. All the publishers understand that keeping the agency pricing is in their best interest. You assume that Amazon has the whip hand, but the only thing that gives Amazon the whip hand is the ability to run to Judge Cote crying about collusion again. That may not be so easily this time, with the press and appeals court watching.

Amazon will sell ebooks no matter if it is agency or non-agency. Hachette has to decide how important agency pricing is to them, or rather how much they are willing to pay for it. If they go agency pricing with Amazon, and try to do non-agency with everybody else that should void the contract with Amazon - Amazon would be really stupid not to include such a clause. If they go non-agency with Amazon now, no other retailer would agree to agency pricing. The whip that Amazon has is the power to decline any agency pricing contract with Hachette now until it is clear which way they go when negotiating with Apple. Maybe Hachette is hoping for Apples appeal to go through and lift the limit of them having to negotiate alone.

I highly doubt it will happen in time before Hachette has to reveal their hand. Amazon may happily screw over Hachette, but don't for a second believe that Hachette wouldn't happily screw over Amazon.

[Barcey]

Originally Posted by rhadin

You shouldn't, and that is one of my complaints about ebooks regardless of pricing, but that isn't the issue you raised. You said and argued on behalf of Amazon's $9.99 cap and the need to have a good excuse to go higher.

Just curious, where did you think you saw the word 'cap' in Amazon's statement or Felix's posts?

[ApK]

Originally Posted by Barcey

Just curious, where did you think you saw the word 'cap' in Amazon's statement or Felix's posts?

It's implied by the fact they state only small number of specialized titles should be allowed to go higher.

The difference between seeing that as a "cap" vs a "baseline" is the specific implementation of the the terms "small number" and "specialized."

I have to admit that the way Amazon phrases it in the OP smacks more of "cap," but I really believe it's more of a negotiating tactic than what Amazon really expects to do, so that they can later be seen to make compromises in favor of the publisher and show what fair and easy-to-work-with partners they are.
I expect it will end up being more of a baseline.

[Barcey]

Originally Posted by ApK

It's implied by the fact they state only small number of specialized titles should be allowed to go higher.

The difference between seeing that as a "cap" vs a "baseline" is the specific implementation of the the terms "small number" and "specialized."

I have to admit that the way Amazon phrases it in the OP smacks more of "cap," but I really believe it's more of a negotiating tactic than what Amazon really expects to do, so that they can later be seen to make compromises in favor of the publisher and show what fair and easy-to-work-with partners they are.
I expect it will end up being more of a baseline.

The fact that they say there are outliers means there is no cap.

It's clear to me that what they're saying is that instead of having the majority of new releases priced at $14.99 they should be priced at$9.99. Same principal as today but a different price point.

[ApK]

Originally Posted by Barcey

The fact that they say there are outliers means there is no cap.

No policies are ever absolute.
They say "no refunds after x days" but if you make a good case to CS, they make exceptions.

That's the difference. If exceptions are only in rare specialized cases, it's effectively a cap. If exceptions are not especially rare and not particularly special cases, then it's a effectively a baseline.

[Barcey]

Originally Posted by ApK

No policies are ever absolute.
They say "no refunds after x days" but if you make a good case to CS, they make exceptions.

That's the difference. If exceptions are only in rare specialized cases, it's effectively a cap. If exceptions are not especially rare and not particularly special cases, then it's a effectively a baseline.

I've found Amazon's statements to be well structured and carefully worded. Prior to agency all their official statements were that ebooks on the NY Times bestseller list would be priced at $9.99, it was others that said they think that all ebooks would be priced at $9.99.

The main message in this statement is that they believe that $9.99 is a better price point then $14.99 and they go on to explain why. They anticipated that critics would again say that they believe that all ebooks must be priced at $9.99 and they added the line:

Is it Amazon's position that all e-books should be $9.99 or less? No, we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99.

I read that to clarify that all ebooks will not be priced at $9.99. There is no cap and there is no policy. The 'small number' clarification just means that they believe it will be a small percentage of the total ebooks that Amazon sells.

[ApK]

How many times would you like go back and forth insisting that your interpretation and guesses are the only possibly correct ones?

[eschwartz]

I think this whole argument is a red herring. Amazon is merely providing an explanation for their demand that any Agency Pricing agreement see general prices capped at $9.99 unless there is some stated reason why any other price point would be better. At which point Amazon will magically agree that since there is some actual comprehensible reason, OK lets price it at that price point, because of the special circumstances that make this book different from any run-of-the-mill thriller.

And they are making a prediction that the number of ebooks where Amazon and Hachette will agree (under the potential new Agency agreement) deserve a higher price, will be a low number. Any such book will be specialized even if it is 30% of all ebooks because by definition it will have special reasons.

[eschwartz]

Originally Posted by pwalker8

Mostly what would keep them from doing that is the understanding that Amazon will happily screw over the publishers. All the publishers understand that keeping the agency pricing is in their best interest. You assume that Amazon has the whip hand, but the only thing that gives Amazon the whip hand is the ability to run to Judge Cote crying about collusion again. That may not be so easily this time, with the press and appeals court watching.

That assumes that Amazon was doing something wrong or objectionable, and that the appeals court will suddenly agree with you now that you have drawn their attention to the issue. (Hint: They knew already.)

Regarding the press: Neither the people nor the courts care what the press says, since they are actually owned by the same companies that own the BWMs no one in their right mind can think they are saying anything but whatever is best for the BWMs and damn the truth.

If the BWMs would happen to be in the right, then the press would be alerting us to the truth.
If the BWMs would happen to be in the wrong, then the press would be lying to us.

Either way, they aren't exactly a reliable or meaningful source of information, regardless of which statement ^^ you happen to believe is true.

[SteveEisenberg]

Originally Posted by eschwartz

Regarding the press: Neither the people nor the courts care what the press says, since they are actually owned by the same companies that own the BWMs no one in their right mind can think they are saying anything but whatever is best for the BWMs and damn the truth.

The Guardian, the British paper that seems most likely to have the sort of story you dislike, is untied to book publishers, being essentially self-owned:

http://en.wikipedia.org/wiki/Scott_Trust_Limited

The New York Times is 88 percent family-owned, with most of the rest owned by Carlos Slim, who does not seem to be a publisher:

http://en.wikipedia.org/wiki/The_New...imes#Ownership

As for the Washington Post, I take it you know who owns that.

CBS News? One for you there -- common ownership with Simon & Schuster. FoxNews? Until recently, it was under the same ownership as Harper-Collins, so I'll give you that. And I'm all for less television viewing. But do the television networks really drive publishing coverage? I doubt it.

The Wall Street Journal? Yes. Same ownership as Harper-Collins. Does this really make the Journal's coverage of the publishing biz slavish devotion compared the independent papers? No.

Your media bashing is an example of playing the ump.

[cfrizz]

Originally Posted by darryl

Hachette was just the unlucky one of the BWM. The only option for it to reach an agreement now is for Amazon to cave completely. Otherwise it must stall until some or all of the other BWM are also out of contract. The BWM will then present a united front.

I would think that the BWM stalling until all were out of contract to present a united front would have the JD and Judge Cote dragging them right back to court for collusion again! Wasn't that the whole idea of having the end of contract dates staggered in the first place?