Pressure Mounting for Judge Cote to Reject E-Book Settlement

[stonetools]

Originally Posted by RDaneel54

If IPG was rolled over than MacMillan was rolled over. If MacMillan faced Amazon down, than IPG faced Amazon down. Wasn't the end result the same?

Er, no. Macmillan fought for-and won- an agency pricing arrangement with Amazon.
With IPG, its less clear cut. Amazon wanted to change the terms of its contract with IPG to IPG's disadvantage. IPG loudly rejected the deal, and Amazon refused to sell IPG books. IPG ran a sort of PR campaign against Amazon and held out for several months. About a month go, IPG quietly agreed to terms. Most pundits think the terms were Amazon terms.

[DiapDealer]

Originally Posted by stonetools

Maybe somewhere between 9.99-14.99, across the board, all ebooks. Whatever price they pick, it won't be a money-losing price, though. Count on that.

Understood. But would they be able to survive with that "this is the price" pseudo-agency scheme with Amazon actively/creatively/effectively undercutting that pricing (still operating within any potential settlement constraints) for two or three years?

[stonetools]

Originally Posted by DiapDealer

Understood. But would they be able to survive with that "this is the price" pseudo-agency scheme with Amazon actively/creatively/effectively undercutting that pricing (still operating within any potential settlement constraints) for two or three years?

I think its all going to depend on what terms the publishers offer the bookstores. With no MFN clauses to worry about, they may offer different prices for different books to different bookstores. They might offer certain books to Apple and not to Amazon. Its kind of unclear just what the DOJ will let the publishers do.
In the end Apple might just say "F**** it. Ebooks at the iBOOK store are $9..99 for the next two years. Undercut THAT, motherf&&&&&!!". I don't think they'll do that, but they could afford it.

[fjtorres]

Originally Posted by Kali Yuga

However, it should be noted that not all the publishers switched at the same time; notably, Random House successfully negotiated agency pricing much later than the others.

Not quite the way the timeline played out:
RH refused to join the initial conspiracy and took advantage of the price hikes to undercut the conspirators and grow their market shre at their expense.
At that point Penguin "suggested" B&N (the biggest pbook retailer still) ought to stop promoting RH books until they joined the price fix.
At that point, whether voluntarily or not, RH had all the leverage of "industry practice" on their side. "Successfully neggotiated" makes it sound harder than it was.

MacMillan?
Amazon caved when Penguin and co told them *they* were also moving to price-fixing and they'd better be ready to do without all the conspiracy's titles.

It might have just been a PR stunt by Amazon but the publicly available data suggests they were willing to out-stare any single publisher but not five. Just as the evidence suggests RH lawyers decided that ganging up to implemment price-fixing was a bad idea.

So far, it's looking $55 million bad with more to come.

Whatever RH is paying their lawyers, they likely *earned* it with that recomendation.

[stonetools]

Amazon caved when Penguin and co told them *they* were also moving to price-fixing and they'd better be ready to do without all the conspiracy's titles.

So far, there's no evidence whatsoever that this happened. Certainly, Amazon hasn't said that (and it would be to their interest to put that out there). It certainly ain't in the DOJ complaint . If you have evidence like this, link to it.
THe DOJ may think it happened like that but that ain't evidence.

BTW, the Settling 3 will now be able to benefit in the same way RH did for the next 2 years. What goes around comes around.

[Fbone]

Originally Posted by fjtorres

Not quite the way the timeline played out:
RH refused to join the initial conspiracy and took advantage of the price hikes to undercut the conspirators and grow their market shre at their expense.

Whatever RH is paying their lawyers, they likely *earned* it with that recomendation.

It's been leaked that RH didn't join initially because the Larsson trilogy was selling so well and they didn't want to stop its momentum. Move tie-in. As most retailers were selling them at or below cost moving to agency model or RPM would have increased the customer cost 30-100%.

[vernonhaynes]

hmmm....

[Ken Irving]

This is worth reading because it makes a very clear, detailed case for rejecting at least some terms of the settlement. The more I read on this business, the less it seems likely that the DOJ will be able to prove its case, but then what publishers are saying right now as opposed to what proof the DOJ is likely to present in court are two way different things. I look forward with interest to seeing how the trial on that comes out.

http://www.digitalbookworld.com/2012...-the-long-run/

[murraypaul]

The settlement is flawed by an astonishing provision, specifically requiring three large publishers to allow e-book vendors to routinely sell e-books at below cost

Why is this astonishing?
Loss-leaders are standard in almost every type of retailing, there is nothing magical about books that makes them different.

[Kali Yuga]

Originally Posted by fjtorres

At that point Penguin "suggested" B&N (the biggest pbook retailer still) ought to stop promoting RH books until they joined the price fix.

Is that a joke?

Random House is the largest publisher in the US; at the time of the switch -- early 2011 -- B&N was losing sales, closing stores, and selling puppets just to stay afloat. B&N was in no position to put pressure on RH.

Originally Posted by fjtorres

Amazon caved when Penguin and co told them *they* were also moving to price-fixing and they'd better be ready to do without all the conspiracy's titles.

No, Amazon caved because of an enormous backlash against their crude and heavy-handed actions. It was Amazon, not Macmillan, who was blamed for pulling the books, and the strategy backfired.

[murraypaul]

Originally Posted by Kali Yuga

Random House is the largest publisher in the US; at the time of the switch -- early 2011 -- B&N was losing sales, closing stores, and selling puppets just to stay afloat. B&N was in no position to put pressure on RH.

Conversely, surely they were in no position to resist pressure from the other publishing houses? Annoy one publisher, or annoy all the others?

[Top100EbooksRank]

Originally Posted by Kali Yuga

Is that a joke?

Random House is the largest publisher in the US; at the time of the switch -- early 2011 -- B&N was losing sales, closing stores, and selling puppets just to stay afloat. B&N was in no position to put pressure on RH.

http://dearauthor.com/features/indus...mes-important/

When Random House refused to move to Agency, David Shanks of Penguin went to Barnes & Noble “I would hope that [Barnes & Noble] would be equally brutal to Publishers who have thrown in with your competition [Amazon] with obvious disdain for your welfare.” B&N continued to promote RH titles and so Shanks went back to B&N. ”Following this contact, B&N’s management decided not to feature Random House in any future advertising.”

Random House eventually caves.


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One of the biggest beneficiaries of agency pricing is Barnes and Noble. They no longer have to compete with Amazon on price.

The ebooks prices are the same on B&N and Amazon for the Agency Five. With wholesale, B&N will have to offer discount to stay competitive. This will eat into their margin but the customers will get a better deal.

Authors lost a lot of money under agency pricing.

"He quoted a CEO who estimated that $100 million was the aggregate hit to profits in a year."

[stonetools]

The ebooks prices are the same on B&N and Amazon for the Agency Five. With wholesale, B&N will have to offer discount to stay competitive. This will eat into their margin but the customers will get a better deal.

Not if BN goes bankrupt.

You may have somehow missed this, but there is a clear and present danger of that.

[DiapDealer]

Originally Posted by stonetools

Not if BN goes bankrupt.

You may have somehow missed this, but there is a clear and present danger of that.

Companies go bankrupt all the time. That doesn't inherently represent a "clear and present danger" ... except for the employees and stockholders of B&N, of course. At least not a "OMG the sky is falling!" danger. It's a risk all companies face when doing business.

You say "one less competitor keeping Amazon in check" ... I say "one more ineffectual/inefficient organization—that beat up Mom & Pop to gain industry dominance and then got fat, complacent and slow—bites the dust." Potato/potahto.

But yeah... let's go ahead and change the rules to protect/reward/support/subsidize the fat, complacent and lazy competition in the hopes that they might some day tip over and squish the evil despot with their bulk.

[stonetools]

Originally Posted by DiapDealer

Companies go bankrupt all the time. That doesn't inherently represent a "clear and present danger" ... except for the employees and stockholders of B&N, of course. At least not a "OMG the sky is falling!" danger. It's a risk all companies face when doing business.

You say "one less competitor keeping Amazon in check" ... I say "one more ineffectual/inefficient organization—that beat up Mom & Pop to gain industry dominance and then got fat, complacent and slow—bites the dust." Potato/potahto.

But yeah... let's go ahead and change the rules to protect/reward/support/subsidize the fat, complacent and lazy competition in the hopes that they might some day tip over and squish the evil despot with their bulk.

The point is that you can't just blithely say"All BN has to do is match Amazon's discount" as if BN can do that and still survive. They most likely can't.

You have to be realistic about what will actually happen. Now maybe we can live without BN but let's not pretend that it this wouldn't be the likely result.