Tor/Forge Books Announces DRM-Free E-book Store

[Synamon]

Originally Posted by AnemicOak

Only is Tor.com is a separate 'agent' that contracts with the parent company. Otherwise it would be publisher set pricing. They would be selling at the same amount as their agents (Amazon, B&N, Apple, etc) do because of the most favored nation clauses in current agency contracts.

Right. I don't see how Tor would be able to sell books at their own site for less than the price they set for everyone else because of the MFN clause. Their own deal with Apple is what prevents this.

[stonetools]

Originally Posted by murraypaul

<aside>
This always confused me about the talk about Apple's 'Most Favoured' status in these contracts. If everybody has to sell at the same price, how is any one retailer more favoured than any other?

One of Apple's arguments in a nutshell.

It really should be called a "no-undercutting -by competing retailer" clause, but that doesn't roll "trippingly " off the tongue.

[ProfCrash]

The settlement actually addresses this. It states that books cannot be sold for a loss by any company. Amazon can price it so they make $.01 or even no money but they cannot take a lose on the book.

[HarryT]

Originally Posted by ProfCrash

The settlement actually addresses this. It states that books cannot be sold for a loss by any company. Amazon can price it so they make $.01 or even no money but they cannot take a lose on the book.

Please correct me if I'm wrong, but I believe the actual requirement is that no company is allowed to run its eBook business at a loss. ie, the constraint is on the overall business, not an individual book. Amazon is allowed to sell some books at a loss, as long as the profit they make on others is more than that loss.

[ProfCrash]

I thought I had read that the individual books could not be sold for a loss. I could be wrong, it has been a while. At the very least, it was the books from one company could not be sold for a loss and not the entire business. I remember thinking that it was a sensible solution to the price undercutting problem.

[HarryT]

Originally Posted by ProfCrash

I thought I had read that the individual books could not be sold for a loss. I could be wrong, it has been a while. At the very least, it was the books from one company could not be sold for a loss and not the entire business. I remember thinking that it was a sensible solution to the price undercutting problem.

I'm probably wrong, too, but ISTR that the settlement has some sort of "collective profit" element in it, rather than it being a simple "NO book can be sold at a loss" thing. Does anyone know for sure?

[MikeB1972]

Originally Posted by HarryT

No, it's only "agency pricing" if there's an "agent" involved in the process. When Baen sells books through its own site, there's no agent, hence no agency pricing. It's analogous to a manufacturer selling its products directly to the public.

I thought Baen eBooks wasn't a wholly owned subsidiary of Baen?
Webscriptions was certainly a seperate legal entity but I'm not sure if the revamp has changed things.

I suppose we could call Baen eBooks whatever the distributor equivalent of an agency publisher is as they have multiple publishers who sell there under agency terms but elsewhere under wholesaler terms

[AnemicOak]

Originally Posted by HarryT

I'm probably wrong, too, but ISTR that the settlement has some sort of "collective profit" element in it, rather than it being a simple "NO book can be sold at a loss" thing. Does anyone know for sure?

The retailer can sell individual titles at a loss, but must show a profit overall for all the books it sells from that publisher’s catalog, or at least that's my understanding.

[stonetools]

Originally Posted by HarryT

I'm probably wrong, too, but ISTR that the settlement has some sort of "collective profit" element in it, rather than it being a simple "NO book can be sold at a loss" thing. Does anyone know for sure?

In any case, the settlement does not apply. Macmillan is the parent of Tor.com, and Macmillan isn't one of the 'Settling Publishers".

[ProfCrash]

Originally Posted by AnemicOak

The retailer can sell individual titles at a loss, but must show a profit overall for all the books it sells from that publisher’s catalog, or at least that's my understanding.

That would make more sense.

[HarryT]

Originally Posted by AnemicOak

The retailer can sell individual titles at a loss, but must show a profit overall for all the books it sells from that publisher’s catalog, or at least that's my understanding.

Thanks - that makes sense!

[Joykins]

Baen sells its own ebooks at its ebook website (used to be webscriptions), but it also sells (selected) books of selected other publishers at the same prices it sells its own books. Dunno anything about the agreements, though.

[murraypaul]

Originally Posted by AnemicOak

It's the MFN that helps ensure the books aren't being sold lower elsewhere. Otherwise a publisher could sell books for less through say B&N than Amazon if they wanted to. It would still be agency pricing as the publisher would be setting the price the agent sell at.

But they are all Equally Favoured Nations.
There is nothing special making Apple more Favoured than anyone else?

[AnemicOak]

Originally Posted by murraypaul

But they are all Equally Favoured Nations.
There is nothing special making Apple more Favoured than anyone else?

Right.

[Elfwreck]

Originally Posted by murraypaul

But they are all Equally Favoured Nations.
There is nothing special making Apple more Favoured than anyone else?

Each contracted seller has its own MFN clause, and it started with Apple. Before that, publishers were able to set book prices differently at each store they sold to.

Apple doesn't have a contract that says "you must offer this book at the same price everywhere." It says, "you can't sell it elsewhere at LESS than you sell it here." Amazon has the same requirement. So: each of them has an MFN clause in their contracts.

Publishers are welcome to sell their books for $12.99 at Apple and Amazon, and offer them on their own site at $14.99. It's just that nobody does it that way. Publishers would *like* to sell at $12.99 at Apple and Amazon, and $9.99 at their own sites, where they don't lose 30% of the cover price--but the MFN clause prevents that.