U.S. Justice Dept. to Sue Publishers, Apple, for Price Collusion?

[SeaKing]

Originally Posted by stonetools

That's some absurd hyperbole there. Since agency pricing the ebook market has doubled. Those consumers are buying those "overpriced" bestsellers like never before. Frankly it would be difficult to argue that consumers have been hurt all that much by agency pricing.

Have you considered that the doubling of the market increased just because of greater demand, that it might have tripled if the prices were lower?

Quadrupled?

[HansTWN]

Originally Posted by SeaKing

Have you considered that the doubling of the market increased just because of greater demand, that it might have tripled if the prices were lower?

Quadrupled?

What about the number of reading devices since introduction of agency prices? That has probably gone up 5 or even 10 fold. So a doubling of the market for agency ebooks is a poor showing indeed.

[Barcey]

Originally Posted by SeaKing

Have you considered that the doubling of the market increased just because of greater demand, that it might have tripled if the prices were lower?

Quadrupled?

The best chart that I've seen is here (first graph), that shows what happened to ebook sales when the agency pricing was implemented in early 2010.

http://ebookcomments.blogspot.com/

If you compare that against the iPad sales, Kindle sales, tablet sales it's a pretty bleak picture. I'd also like to see it compared to public library loans during the same period.

Unfortunately Amazon doesn't release sales statistics but compare it to the graph that Amazon flashed during a presentation.

http://articles.businessinsider.com/...l-growth-slide

[stonetools]

Originally Posted by SeaKing

Have you considered that the doubling of the market increased just because of greater demand, that it might have tripled if the prices were lower?

Quadrupled?

Heh, I notice that the "piracy doesn't hurt sales" folk resist that argument when content creators argue against piracy. When the same folks put on their "anti-agency pricing" hat, all of a sudden its "we can't prove a one to one loss of sales, but agency priciing does hurt sales".

I agree that agency pricing does hurt sales . That misses the point. The publishers instituted agency pricing above all to prevent Amazon from maintaining their monopoly of the ebook retail market. It did achieve that goal ( Amazon's share of the ebook market dropped from 90 to 60 per cent and other companies became ebook retailers). Thats a legit business objective, gi ven the right circumstances, according to the Supreme Court in a recent case.

[Elfwreck]

Originally Posted by stonetools

I agree that agency pricing does hurt sales . That misses the point. The publishers instituted agency pricing above all to prevent Amazon from maintaining their monopoly of the ebook retail market.

Conspiring to raise prices to shut down the competition is not legal, any more than conspiring to lower prices to shut down the competition is. If publishers didn't want Amazon to have market dominance, all they had to do was stop selling through Amazon.

It did achieve that goal ( Amazon's share of the ebook market dropped from 90 to 60 per cent and other companies became ebook retailers).

And can this be proved to be because of agency pricing rather than the release of several other wifi-enabled ereaders?

[stonetools]

Originally Posted by Elfwreck

Conspiring to raise prices to shut down the competition is not legal, any more than conspiring to lower prices to shut down the competition is. If publishers didn't want Amazon to have market dominance, all they had to do was stop selling through Amazon.



And can this be proved to be because of agency pricing rather than the release of several other wifi-enabled ereaders?

Actually, the publishers instituted agency pricing in order to FOSTER competition. Thats not an illegal objective.

Those wifi enabled erebook readers made it onto the market not because the companies thought, gee willickers, wouldn't it be great for us to introduce wifi enabled ebook readers, but because the companies had the resources to devote to developing those devices. If they had to use those resources to defend against deep discounts that Amazon can fund by selling other stuff, then those ebook readers wouldn't have been introduced.

[cjr72]

Originally Posted by stonetools

Actually, the publishers instituted agency pricing in order to FOSTER competition. Thats not an illegal objective.

The end justifies the means in other words.

[Wasgo]

Originally Posted by stonetools

Actually, the publishers instituted agency pricing in order to FOSTER competition. Thats not an illegal objective.

Their claim was that there would be increased competition as the market would support the continued existence of more publishers, which they claim means more quality books. However, competition is supposed to increase quality and lower price so only one of the standard objectives is achieved, and allegedly they did so by forming a cartel specifically to limit the other form of competition.

When their whole argument can be summed up as raising prices to increase competition, you have to know something's wrong.

[HarryT]

Originally Posted by Wasgo

When their whole argument can be summed up as raising prices to increase competition, you have to know something's wrong.

I'm not sure that I agree with you. That's exactly the reason that many European countries have fixed prices for books: the benefit for society of keeping small independent bookshops in business is reckoned to outweigh the benefit for the individual consumer of (say) supermarkets selling only the best-seller list at low prices.

And, indeed, since fixed pricing for books in the UK was abolished in 1996, the overwhelming majority of independent bookshops have gone out of business; they just can't compete with the big chains in an open marketplace.

[Wasgo]

Originally Posted by HarryT

I'm not sure that I agree with you. That's exactly the reason that many European countries have fixed prices for books: the benefit for society of keeping small independent bookshops in business is reckoned to outweigh the benefit for the individual consumer of (say) supermarkets selling only the best-seller list at low prices.

I'm not against their argument being that they want to raise prices to keep themselves in business, or that they want to raise prices to limit Amazon's growing control over the medium. I just find it funny that they claim to be increasing competition by taking away one of its standard benefits.

In terms of consumers, the question seems to be one of which is more beneficial, stronger publishers with more distributors, or lower prices. I think people's actual benefit will vary but most would rather side with lower prices.

For me, I'd be most happy with six months of fixed prices through the agency model, followed by market prices. To limit Amazon's growing power, Ebooks would be distributed DRM-free to prevent being locked into Amazon.

[Elfwreck]

Originally Posted by HarryT

I'm not sure that I agree with you. That's exactly the reason that many European countries have fixed prices for books: the benefit for society of keeping small independent bookshops in business is reckoned to outweigh the benefit for the individual consumer of (say) supermarkets selling only the best-seller list at low prices.

However, agency pricing has *not* worked to support small independent ebook stores. Fictionwise was crippled; AllRomanceEbooks lost access to the agency books for almost a year; the EZReader ebook store is a flop.

Also, when ebook prices are fixed but pbook prices aren't, consumers are stuck with the ridiculous situation of pbooks often priced lower than the ebooks, which leaves them confused, suspicious and angry at the entire publishing industry, which is not good for anyone's business.

It's possible that industry-wide price-fixing would benefit smaller stores and indie publishers, but there's no movement in the US to allow that.

[murraypaul]

Originally Posted by HarryT

I'm not sure that I agree with you. That's exactly the reason that many European countries have fixed prices for books: the benefit for society of keeping small independent bookshops in business is reckoned to outweigh the benefit for the individual consumer of (say) supermarkets selling only the best-seller list at low prices.

And, indeed, since fixed pricing for books in the UK was abolished in 1996, the overwhelming majority of independent bookshops have gone out of business; they just can't compete with the big chains in an open marketplace.

However, the existence of Amazon et al mean that availability of books has never been greater. Once you can order everything online, the need for local shops becomes much reduced. (Not removed)

[fjtorres]

Originally Posted by stonetools

Actually, the publishers instituted agency pricing in order to FOSTER competition. Thats not an illegal objective.

The Feds and the euros both think so.

It doesn't matter how hard the BPH apologists try to make this about Amazon, the trustbusters aren't buying that bait and switch. This is one time the "Big Lie"(tm) approach isn't working. The Price Fix isn't about Amazon or competition; it is about raising prices. *Colluding* to raise prices.

They raised prices on consumers to "protect" them from Amazon?
Yeah, right.

That's like destroying a village to "save" the village...
Don't expect the villagers to approve of your oh-so brilliant "Grand stategy".

[fjtorres]

As to the european case, note that the euros (no friends of Amazon) are in lockstep with the DOJ on this:

"This possibility of a settlement is only open in the case the publishers will be ready to remove all our objections," European Commissioner for Competition Joaquin Almunia told reporters.

He said EU regulators were co-coordinating with U.S. counterparts, which are also looking into such pricing deals under an agency model adopted in 2010 in which publishers set the retail price.

Under the Commission's settlement procedures, companies could offer concessions to avert a fine of up to 10 percent of their global sales.

http://www.reuters.com/article/2012/...82B0JP20120312

And, I suspect that past european "protection" of small shops is not the best precedent to bring up in a price-fixing case where *all* the cartel members are giant multinationals like the BPHs and Apple.

[stonetools]

Originally Posted by Elfwreck

However, agency pricing has *not* worked to support small independent ebook stores. Fictionwise was crippled; AllRomanceEbooks lost access to the agency books for almost a year; the EZReader ebook store is a flop.

Also, when ebook prices are fixed but pbook prices aren't, consumers are stuck with the ridiculous situation of pbooks often priced lower than the ebooks, which leaves them confused, suspicious and angry at the entire publishing industry, which is not good for anyone's business.

It's possible that industry-wide price-fixing would benefit smaller stores and indie publishers, but there's no movement in the US to allow that.

The purpose of agency pricing was to reduce Amazon's power and allow a diversity of ebook retailers, not solve every problem in the ebook marketplace. It did what it did. Reversing agency pricing would in all likelihood re-establish an Amazon monopoly, with lower prices at first but with Amazon free to do anything it wanted to do to protect its profit margins, from raising prices to squeezing authors.
As for Fictionwise, do you honestly think that it would have survived long trying to out discount Amazon? How do you know it wasn't on the point of bankruptcy when BN bought it? Frankly, we just don't know how successful its business model was. About all we know is that we liked their discounts-which doesn't mean that they were making money.