DOJ suing Apple over ebooks.

[murraypaul]

Originally Posted by stonetools

Every analyst thinks of this as a disaster for publishers and authors, who will just make less in the new regime. All this airy talk of "new business models" , "best practices", etc. are just gauzy attempts to disguise the fact that publishers and authors are gonna lose out. I think its better if folks who are happy about the DOJ action just own that upfront, and then go on from there.

I'm not sure it makes sense to lump publishers and authors together there.
Breaking up the way the industry works is almost certainly bad for publishers, that doesn't mean it will be bad going forwards for authors.

[John F]

Originally Posted by ProfCrash

Which is what I was saying. That compensation will have to come through the bookstores because they have the records. So the bookstores will get some more good PR.

Maybe, maybe not. I seem to recall when there was a settlement for CD pricing, the money went directly to the consumer (all the consumer had to do was register saying they bought a CD within the time period).

[Kali Yuga]

Originally Posted by fjtorres

Despite B&N introducing their Glowlight Nook.
Dragged down by the BPH moaning most likely.

No, it's because everyone realizes that with Amazon back in control of final retail pricing, B&N is dead meat.

B&N has pulled in over $5 billion in revenues every year since 2003. Yet their annual net income has declined every year since 2007, and despite picking up business from the demise of Borders, they lost $74 million last year -- in part due to spending so much money making and marketing the Nook.

Amazon has already announced they intend to lower ebook prices. If B&N matches them, their margins will suffer, net income will continue to fall, and they'll be in worse shape -- while treading water in terms of market share. If they can't match Amazon on price, their market share will erode, which will also deteriorate their bottom line.

Either way B&N is screwed, and everyone knows it.

Originally Posted by fjtorres

Trying to portray the settlement as a disaster is not going to help the stock of publishers or retailers. They'd better get to that seventh stage fast.

It's too early to know if it's a "disaster" for everyone. Apple definitely has the wherewithal to match Amazon on price, though not necessarily the will; some dude in a garage could invent "Spotify for eBooks" and cut into the ebook biz; Amazon could be a relatively benevolent monopolist, at least until someone or something threatens that monopoly.

However, it's undoubtedly a disaster for B&N. If they're lucky, someone (read: Google) will buy their Nook division before they declare bankruptcy.

Who's up for a B&N dead pool?

[kennyc]

Originally Posted by murraypaul

I'm not sure it makes sense to lump publishers and authors together there.
Breaking up the way the industry works is almost certainly bad for publishers, that doesn't mean it will be bad going forwards for authors.

Not at all. Certainly in the brave new world of publishing as currently implemented by Amazon, the authors stand to gain much more income mostly due to eliminating the dead weight of the publisher-o-saurus.

[Kali Yuga]

Originally Posted by kennyc

Not at all. Certainly in the brave new world of publishing as currently implemented by Amazon, the authors stand to gain much more income mostly due to eliminating the dead weight of the publisher-o-saurus.

If you mean "no more publishers," then keep in mind that it will be Amazon which will end up dictating terms to the authors -- including, I'm sure, the right to lower a self-publishing author's price at will.

"No publishers" also means no advances, no free editing services, no industry connections, no free marketing....

We've seen a few people who got big from self-publishing sign with traditional publishers (John Locke, Amanda Hocking). We'll see if that works for them, but at least at the moment they think the "dinosaur dead weight" is actually worthwhile.

We haven't seen a lot of indie musicians routinely top the charts without the music labels, which are further along in the disintermediation process than books. hmmmmm

It also means that books which require resources will be fewer in number. Self-publishing works fairly well for fiction and memoirs, not so well if you need to spend 6 weeks in Europe checking historical records.

[stonetools]

Shatzkin on the likely effect on authors and readers:

Over time, the biggest losers here will be the authors. The independent authors will feel the pain first. Agency pricing creates a zone of pricing they can occupy without much competition from branded merchandise. When the known authors are only available at $9.99 and up, the fledgling at $0.99-$2.99 looks very attractive and worth a try. Ending agency will have the “desired” effect of bringing all ebook prices down. As the big book prices are reduced, the ability of the unknowns to use price as a discovery tool will diminish as well. In the short run, it will be the independent authors who will pay the biggest price of all.

But, in the long run, all authors will just get less. They will join the legion of suppliers beholden to a retailer whose mission is to deliver the lowest possible price to the consumer.

Seth Godin has recently made the argument that this is simply inevitable. Perhaps it is. The laws of supply and demand would support that contention. But from my personal perspective, I don’t like seeing the government hasten the process along.

But what about the reader? The reader gets lower prices, cheaper reading. What the reader won’t see is that s/he’s not getting what s/he won’t pay for. Some of the best books won’t get written and the biggest casualties will be in the area of highly-researched non-fiction, like major biographies, in my opinion. Twenty years ago they used to say that a conservative was a liberal who’s been mugged. I’m not about to become a conservative, but I sure see how easy it is for the government not to understand how their decisions might affect the dynamics of a business. Or, in this case, a culture.

LINK

[Graham]

Originally Posted by stonetools

Shatzkin on the likely effect on authors and readers:



LINK

But that ignores the effects of volume. Lower prices should encourage more sales. My own experience is I'm likely to spend more money when prices are lower, not less. Rather than one book at £10, I'm likely to buy two books at £6.

And there's an argument that would say bringing down the price of well-known books could bring in new readers, growing the number of consumers.

Having said all that, I've been posting some rubbish today...

Had a bit of a headache.

Graham

[DiapDealer]

Some of the best books won’t get written

That is the single most ridiculous, unknowable, unprovable bit of philosophical, paradoxical claptrap I think I've ever read on this subject. Shatzkin clearly favors the traditional publishing model. We get that. So why is it news that he condemns anything that may hurt that model?

I got news for Shatzkin: some of the best books don't get written now! And some of the best authors chose a completely different career. See how silly that sounds?

[stonetools]

If you mean "no more publishers," then keep in mind that it will be Amazon which will end up dictating terms to the authors -- including, I'm sure, the right to lower a self-publishing author's price at will.

"No publishers" also means no advances, no free editing services, no industry connections, no free marketing....

I think a lot of folks here don't understand that one of the major services a publisher performs for an author is that they " share the risk" of a start up business. When a publisher advances money and provides editing, proofreading, cover art, and marketing services to a new author, the publisher is betting on an unproven product- being a venture capitalist as it where. An indie author has to do all of that themselves-often while working a day job. Not surprisingly, authors want someone to share risk and invest in them, especially when the project requires, say, investigating the history of a long-forgotten racehorse named Seabiscuit.
Random House bet big that there would be a market for that sort of story- and won. Of course, they also bet a lot and lost a lot. Their big win on Seabiscuit covered those losses. Is Amazon-or a publisher beaten down to thin margins like Amazon- likely to make those kind of bets? Or will they just go for another spicy fangfest? Well, we are abouto find out

[HappyMartin]

What tends to get forgotten is books, fiction in particular, have to compete for money with every other thing that is for sale. If the pricing of books is unattractive the consumer may purchase something other than a book. Its not like we have to buy a book.

I cannot fathom why anyone would think putting the price up for a particular product that is a discretionary purchase would be good for the industry that produced that product.

If books cost too much we buy something else. Simple

[fjtorres]

Originally Posted by Kali Yuga

Who's up for a B&N dead pool?

Not me.
I think that the end of the conspiracy opens the door to creative marketing and pricing schemes; loyalty programs, bundles, coupons, flash sales, and *deep* B&M/ebook ties.
Now, I'm not saying B&N isn't skating on this ice; they are and I've been saying it for months now. But they have a lot of resources that the golden handcuffs of the price fix scam didn't let them use.

I also think that with pricing back in play there will no longer be a guarantee that Amazon will *always* have as good a price as anybody on any specific book on any given day. Comparison shopping will come back. And crossplatform compatibility will be *actually* meaningful instead of merely *theoretical*. This will boost multi-purpose devices and those that can be hacked into multiplatform functionality (Nook STR, Sony T1).

I think Adobe had better go on an evangelism kick to sign up hardware vendors to full ADEPT support (including B&N DRM). Maybe even developing an open android-based reader reference design.

Before this I was pretty down on B&N's long term prospects and I thought selling Nook was a given. Now I'm more neutral. If Turow and the apologists don't torpedo the settlement, I can see a lot more synergy between the storefronts and Nook.

BTW, bringing in indie booksellers as "victims" of the DOJ is disingenuous because none of them are credible ebook players under agency and because it is the BPH's volume discounting of pbooks that is killing them.

So far the modern ebook age has had three watershed events; the introduction of the Sony PRS500, the introduction of the Kindle, and the introduction of the price fix scam. Each one had its own after-shocks and follow-up milestones (Oprah hyping Kindle, the 4 hour price war,etc) and so will the settlement and the return of BPH ebook price competition.

Nobody knows what the after-shocks will look like, least of all the hand-wringing traditionalist pundits claiming the sky is falling. But the odds are that regardless of what happens to the BPHs, the consumers will come out ahead.

And, yes; One. More. Time: Antitrust is about *consumers*.
The DOJ trustbusters *only* care about harm to consumers. The conspiracy harmed consumers, which means the BPH execs are *criminals* and the DOJ now has to move to protect consumers from the criminal conspirators that inflicted *actual* measurable harm. (That is their job.)

Everybody else will just have to take their chances.
And they shouldn't expect any sympathy from the people they've been merrily ripping off for two-plus years.

[mncowboy]

The real winners in this deal are going to be the readers - they will get books at lower prices. Lower prices to the consumer will mean more books read. That means the authors will win also. The only real losers will be the major publishing houses.
As far as providing "free" services such as editing, proofing, etc., come on! Take a look at the net margin going to the author from the big 6 - around 15%. These services are far from free.

[fjtorres]

Originally Posted by mncowboy

As far as providing "free" services such as editing, proofing, etc., come on! Take a look at the net margin going to the author from the big 6 - around 15%. These services are far from free.

And those advances they brag about are little more than glorified loans on terms that in many cases would make loan sharks blush with enbarrassment.

The author/publisher relationship is a *business* relationship where the author *rarely* has the upper hand. Why romanticize it? Out of nostalgia for a simpler era? An era most writers have nothing to be nostalgic over?

[stonetools]

Not me.
I think that the end of the conspiracy opens the door to creative marketing and pricing schemes; loyalty programs, bundles, coupons, flash sales, and *deep* B&M/ebook ties.
Now, I'm not saying B&N isn't skating on this ice; they are and I've been saying it for months now. But they have a lot of resources that the golden handcuffs of the price fix scam didn't let them use.

That sounds really nice but a lot of those resources are going to be tied up defending against Amazon price war discounts. THAT"s real world. Oh, and Nook development money? That'll be tied up too.

Note that business investors- the kind of folk who bet big money on things like this -don't share your rosy view of BN's prospects.
The funny thing is that when the Nook tablet refresh doesn't arrive next year, people will be wondering why....

[stonetools]

Originally Posted by mncowboy

The real winners in this deal are going to be the readers - they will get books at lower prices. Lower prices to the consumer will mean more books read. That means the authors will win also. The only real losers will be the major publishing houses.
As far as providing "free" services such as editing, proofing, etc., come on! Take a look at the net margin going to the author from the big 6 - around 15%. These services are far from free.

Actually publishers "should" be raisiing ebook royalties. Unfortunately, since publishers will be making less money next year, they'll probably be resisting those demands.
Lower prices for books usually means lower royalties for authors. That's a lot more realistic than lower prices= more books sold=more money for authors. What if more books DON'T sell?