DOJ suing Apple over ebooks.

[stonetools]

Originally Posted by Barcey

This is false. Try this.

1) The iPad is launched showing ebooks priced at $14.99
2) Walt Mossberg asks Steve Jobs the obvious question. Why would she buy a book from you at $14.99 when she can buy the book at Amazon for $9.99.
3) Steve Jobs replies that the prices will be the same.
4) Walt asks if that means your price will be $9.99 or Amazons price will be $14.99
5) Steve Jobs replies that the price will be the same and then states that the publishers are going to pull their books from Amazon.

Evidence

http://allthingsd.com/20100128/boomt...ve-jobs-cameo/

That's significant evidence in favor of collusion. Soon, the defense will answer the complaint and we'll hear the case against collusion. Time will tell.

[JSWolf]

Originally Posted by rhadin

Only if readers buy ebooks based on publisher instead of on author/genre. So far sales occur based on author/genre, not publisher.

But I think that could change when they see the latest bestseller from S&S is $9.99 and selling well while books from Random are $12.99 or $14.99. I think loyalty will only go so far.

[stonetools]

Originally Posted by Elfwreck

For top authors: yes. King's new book can be $14.99 or $22.99 and it will still sell millions.

It's the midlist authors who'll be squeezed out if Random House won't drop their prices to match the competition, and they'll make plenty of noise about it. While that might be all they're able to do, depending on how draconian their contracts are, it'll certainly convince new authors that Random House is not where they want to be.

Or you may see authors rushing to RH, because they can defend a higher price ( and thus higher royalties) for their author's books. I could see it going either way.

[MrsJoseph]

Originally Posted by ProfCrash

I have a sneaking suspision that Amazon will match all offers by other bookstores. We know that they have an alogrithm that searches the web for prices and lowers books from Independent Authors to match the lowest price that was available. Do you really think Amazon is going to let Kobo sell a book for less than Amazon?

I don't think so.

I was able to get the entire Hunger Games trilogy for $3.06. Amazon wasn't offering those prices...

[stonetools]

Originally Posted by DiapDealer

I like it... let's both agree to completely shut up about the subject on MobileRead until such time as the litigation process is done and a judge has made a determination. What do you say? You and I... not one more peep. Deal?

If you get everyone else on MR to sign on-deal!!

[MrsJoseph]

GREAT article at Dear Author titled Antitrust Primer for the Publishing Price Fixing Lawsuit

SNIP


There is no written agreement of the defendants to fix prices. Instead, the government is arguing that the conduct of the publishers is indirect evidence of the agreement hence the allegations of meetings, phone calls and double delete email warnings. The government must show that independent action was not likely. John Sargeant’s statement that he made his decision alone in his basement on the treadmill is an argument that Macmillan’s pricing decisions were independent of any other publishers.

Price fixing monopolies are considered unstable because the incentive to cheat on a partner in the cartel is too great. Overtime, at least one or more of the firms in the cartel will reduce prices to gain market share thus shattering any agreement. It is much easier to maintain a cartel if the market players involved are oligopolistic. While there are a number of small publishers, the Big 6, as they are called, control some 80% or more of the trade book business.

The jury instructions tell a jury that they cannot find price fixing solely on the fact that Apple and the publishers talked about prices in person or wrote about different prices, or that there was a suggested price that everyone followed or that the publishers refused to deal with anyone who didn’t adopt their retail price maintenance model. The instructions focus on the existence of an agreement and the compliance with the agreement.

SNIP

There are two elements that stood out for me in reading the DOJ’s complaint. First, Apple set the pricing floor and ceiling for ebooks and every publisher accepted those terms. Did the publishers individually attempt to negotiate for differing floor and ceilings? Why was it the same for every publisher? No other app in the app store has a pricing floor or ceiling like the books in the iBooks store. Why were books treated differently?

Second, the David Shanks email to Barnes and Noble. In the email, Shanks urges Barnes & Noble to punish Random House for not hopping aboard the pricing agreements that the other publishers had agreed to with Apple. This type of email is evidence that the DOJ will point to as attempting to police or enforce a collusive agreement. In other words, if there is only conscious parallelism why would Shanks need Random House to engage in the same type of pricing. That is one piece of evidence that seems to rule out independent action.

SNIP

As I stated earlier, this is no easy case for the government. There are three parties left in the suit: Apple, Macmillan, and Penguin. The three will have differing arguments. In the beginning, it will behoove all three to stick together, all arguing the same points of law. The first step is to file a motion to dismiss but I think the DOJ petition pleads enough facts to overcome a motion to dismiss. After the motion to dismiss, the parties will engage in what is called “discovery.” Depositions will be taken. Those are oral questionings recorded by a court reporter. Written questions called interrogatories will be sent back and forth as will requests for documents and admissions. After discovery is complete, the defendants will ask for a summary judgment meaning that the DOJ doesn’t have enough evidence to move forward to a jury trial. It is my belief that if the defendants cannot win at the summary judgment stage, their likelihood of prevailing drops dramatically.

[DiapDealer]

Originally Posted by stonetools

If you get everyone else on MR to sign on-deal!!

What does everyone else have to do with it?
Your suggestion was that we should wait and see what happens with the litigation process. I think that's a great idea and I'm willing to put my "money where my mouth is," if you are.

Surely you could go for a few months without discussing the details about the DOJ case and collusion—or lack thereof, right? I know I can.

[JoeD]

Originally Posted by stonetools

Unfortunately, this is exactly what is likely NOT to happpen now. All those things you mention take money-money likely to be devoted now to matching Amazon price discounts.
Independent booksellers have tried to compete against Amazon by offering better book recommendation services- and customershave browsed their shelves, listened to their knowledgeable and friendly staff-and gone home to buy from Amazon.

It doubt it would happen with agency pricing pricing in place. Why shop anywhere other than amazon when you're guaranteed the same price and better ecosystem?

Without agency, retailers have room to try alternative ways to get customers in as kobo appear to be trying with their discounts atm on non-agency titles. They're still going to have to find a way to compete on the ecosystem front and I don't know what form that could take but they'll need something. Maybe they'll find a way to get deals with authors for provindg ARCs to their pre-order customers or with more than a minutes thought who knows what else they could come up with. IMO loyalty programs are a very real method, it's what made me initially buy from non-amazon stores, I only stopped and went to amazon when agency was introduced and those programs ended.

Pricing wise though, if enough retailers had discounts on _different_ books, Amazon could not afford or more likely would not want to afford the cost of matching all of them. They may just stick to offering lower cost best sellers.

I don't see agency helping in any way break amazon's grip (assuming they move to it again legally in the future).

[Elfwreck]

Originally Posted by JoeD

It doubt it would happen with agency pricing pricing in place. Why shop anywhere other than amazon when you're guaranteed the same price and better ecosystem?

Because you get better *books* in other places; mobi doesn't support some of the features that epub has. While most of those are unimportant in most cases, if they matter to you for a notable-if-small number of your books, Amazon isn't going to be your first choice for buying.

Without agency, retailers have room to try alternative ways to get customers in as kobo appear to be trying with their discounts atm on non-agency titles. They're still going to have to find a way to compete on the ecosystem front and I don't know what form that could take but they'll need something.

Fictionwise did great before agency prices started to kill them--you bought Micropay dollars, and they'd regularly have discounts like "Buy this book, get half its value in $MP added to your account." So it's "buy one, get one half off"--but you can decide on the half-book later. And then that money is already there in your account, so you've got an incentive to browse through the store.

That, and their Buywise club--$15/year for a 15% discount on all purchases, and the occasional extra bonus--was enough to keep people coming back to the store even if other places had a wider selection or better overall prices.

Pricing wise though, if enough retailers had discounts on _different_ books, Amazon could not afford or more likely would not want to afford the cost of matching all of them. They may just stick to offering lower cost best sellers.

People forget that all this drama was started by Amazon offering lower-price bestsellers *only*... while they did other discounts, they weren't constant or reliable. They advertised "NYT Bestsellers for under $10" and counted on making up the difference in other sales.

[stonetools]

Originally Posted by JoeD

It doubt it would happen with agency pricing pricing in place. Why shop anywhere other than amazon when you're guaranteed the same price and better ecosystem?

Without agency, retailers have room to try alternative ways to get customers in as kobo appear to be trying with their discounts atm on non-agency titles. They're still going to have to find a way to compete on the ecosystem front and I don't know what form that could take but they'll need something.

Pricing wise though, if enough retailers had discounts on _different_ books, Amazon could not afford or more likely would not want to afford the cost of matching all of them. They may just stick to offering lower cost best sellers.

I don't see agency helping in any way break amazon's grip (assuming they move to it again legally in the future).

Since agency, Amazon's share of the ebook market fell from 90 to 60%. The publishers, other booksellers, and vrtually everyone in the business press think that's due to agency pricing , since it prevents Amazon from out discounting everyone else.
Now most folks here dispute that- even as they eagerly anticipate Amazon discounts.
For me, its simple.
If Amazon steeply discounts bestsellers and gains market share raopidly next year, then that will provethatagency pricing was determinative in reducing Amazon's market share. If Amazonm doesnt gain market sghare, then it wasn't agency pricing. I suspect Amazon will rapidly gain market share .

[JoeD]

John Sargeant’s statement that he made his decision alone in his basement on the treadmill is an argument that Macmillan’s pricing decisions were independent of any other publishers.

I just can't see how that can in any way be used as evidence against collusion. For all we know, the decision he made at that point could have been whether to go ahead with the price fixing agreement they've been discussing over the previous months or not.

Sure the final decision was his, it wouldn't make it any less non-collusive.

Not saying that's the case, but since it _could_ be the case just as equally as it could not, why should his statement be compelling evidence against collusion. There's no way to prove he's lieing or commiting purgory (if he gives the same statement in court) even if he really didn't think that, nobody can prove it, so why is it valid arguement against collusion?

[ProfCrash]

Yup. It was clearly stated that the $9.99 price point was for best sellers only. People would occassionaly complain that there were books over $9.99 and would be pointed to that phrase and go "Oh".

I am all for more competition. If other book stores sell Mobi books and they frequently have prices lower then Amazon I will happily shop there. I expect that Amazon will follow suit and sell non-DRMed EPubs at a discount and siphon off some shoppers. For the most, I would expect little change in the status quo because I think most e-reader users will buy from the bookstore associated with their e-reaer because it is easy and they are lazy.

[JoeD]

Originally Posted by Elfwreck

Because you get better *books* in other places; mobi doesn't support some of the features that epub has. While most of those are unimportant in most cases, if they matter to you for a notable-if-small number of your books, Amazon isn't going to be your first choice for buying.

That's one reason to buy non-amazon for some (and a good niche to build upon since those who care are likely also vocal about their recommendations of why store X is better than Y), they just need to find additional reasons for the rest. Agency imo is not the answer.

Fictionwise did great before agency prices started to kill them--you bought Micropay dollars, and they'd regularly have discounts like "Buy this book, get half its value in $MP added to your account."

I was a regular at fictionwise right up until agency pricing.

Also, I agree about the bestsellers point. The publishers feared price conditioning, but with so many MUCH cheaper books available and a lot of books more around $14-15 it's not going to make much difference. The only thing it might have conditioned is for people to expect to keep buying best sellers at that price. If amazon were making up the losses elsewhere in other ebooks and paying the value publishers were asking and authors selling more copies then everyone was a winner.

[JoeD]

Originally Posted by stonetools

Since agency, Amazon's share of the ebook market fell from 90 to 60%. The publishers, other booksellers, and vrtually everyone in the business press think that's due to agency pricing , since it prevents Amazon from out discounting everyone else.
Now most folks here dispute that- even as they eagerly anticipate Amazon discounts.
For me, its simple.
If Amazon steeply discounts bestsellers and gains market share raopidly next year, then that will provethatagency pricing was determinative in reducing Amazon's market share. If Amazonm doesnt gain market sghare, then it wasn't agency pricing. I suspect Amazon will rapidly gain market share .

Agency was introduced at a point where Amazon have finally made ebook readers mainstream. The ebook market as a whole was growing rapidly and other retailers such as sony and waterstones were heavily pushing alternatives to the kindle.

If Amazon had 90% of the market and agency fixed prices across the entire market, why would anyone that's already an amazon customer leave to reduce their market share? They wouldn't, it's more likely the market grew and people didn't just buy the kindle.

The only question is, if agency wasn't in place, would the newers have picked amazon over the other retailers and imo there's no way to know that.

and, all that said, it still doesn't excuse colluding on prices (if proven true).

[stonetools]

Fictionwise's customers did great before agency prices started to kill them--you bought Micropay dollars, and they'd regularly have discounts like "Buy this book, get half its value in $MP added to your account." So it's "buy one, get one half off"--but you can decide on the half-book later. And then that money is already there in your account, so you've got an incentive to browse through the store.

FTFY.Fictionwise sold out to a bigger, richer bookstore a year before agency pricing.That is not a sign that it was doing great.
One of the side effects of this lawsuit is that we will be getting some solid info on bookstore revenues and profits . We'll learn how well FW and other bookstores were doing .