Apple gripes about antitrust monitoring

[Sil_liS]

Originally Posted by pwalker8

I'm pretty sure that Amazon wasn't getting a better deal than everyone else. They pretty much paid the same price as the other major retailers (I've heard 50% of retail thrown out), however, they were willing to take a lose on those specific ebooks to establish a market.

The agency model didn't break the publishers business model. The publishers were able to set the price to whatever fit their business model. What caused the publishers grief was that Amazon had already set the price in the public's mind, so basically the publishers waited too long.

If you think that you are pretty sure, do the math to check.

Remember that you said:

Originally Posted by pwalker8

it was selling a small subset of ebooks at a loss or very small profit

At 50% of the prices of the books in question that were between $24 and $28, Amazon would have had to pay the publishers $12-$14 per book and would have taken a loss on all the $9.99 bestsellers.

But Amazon got a better deal: 60%, meaning that they only needed to pay the publishers 40% of the cover price: $9.6-$11.2 so they would make a small profit of $0.39 on the books with a cover price of $24 and take a loss on every book with a cover price above $25.

[Greg Anos]

Originally Posted by pwalker8

We are kind of half way between right now. If the copyright holder pulls the ebook, then there isn't much one can do, but I can't imagine that happening very often as everyone settles into the ebook market. Part of the issue is that Baen had a massive change in their ebook store not long ago. For all practical purposes, they no longer have an ebook store. They do still have monthly bundles, but you have to buy the bundle before the books actually hit the streets.

As I said earlier, over time, I think we will see authors putting their entire back catalog online so people can buy any book at any time. But that's going to take time, and I suspect there are quite a few older books that won't officially make it online until they go out of copyright.

Which in the US most likely will be never...

[pwalker8]

Originally Posted by Sil_liS

If you think that you are pretty sure, do the math to check.

Remember that you said:

At 50% of the prices of the books in question that were between $24 and $28, Amazon would have had to pay the publishers $12-$14 per book and would have taken a loss on all the $9.99 bestsellers.

But Amazon got a better deal: 60%, meaning that they only needed to pay the publishers 40% of the cover price: $9.6-$11.2 so they would make a small profit of $0.39 on the books with a cover price of $24 and take a loss on every book with a cover price above $25.

And that's pretty much what they did (take a loss on all the $10 books). What you are missing is the _some_ books. Looking at my orders from that time period, I do have a group of $9.99 books, but I also have a number of books for over $10.00. It's an old tactic, selling a few big name items at a loss to bring customers in who might buy more stuff at regular prices. I believe that Best Buy did that with a limited number of iPhones this past Christmas.

Here is an article from the newyorker

http://www.newyorker.com/reporting/2...a_fact_auletta

According to the article, Amazon was paying the publishers $15 per ebook, while selling those same ebooks at $9.99. That's a $5 loss.

[pwalker8]

Originally Posted by Ralph Sir Edward

Which in the US most likely will be never...

Well, a 100 years after publishing. Long enough in the future that I probably won't see it.

[eschwartz]

Originally Posted by pwalker8

Well, a 100 years after publishing. Long enough in the future that I probably won't see it.

What signs do you see of Disney giving up their lobbying just because 100 yrs. have passed?

[Sil_liS]

Originally Posted by pwalker8

And that's pretty much what they did (take a loss on all the $10 books). What you are missing is the _some_ books. Looking at my orders from that time period, I do have a group of $9.99 books, but I also have a number of books for over $10.00. It's an old tactic, selling a few big name items at a loss to bring customers in who might buy more stuff at regular prices. I believe that Best Buy did that with a limited number of iPhones this past Christmas.

Here is an article from the newyorker

http://www.newyorker.com/reporting/2...a_fact_auletta

According to the article, Amazon was paying the publishers $15 per ebook, while selling those same ebooks at $9.99. That's a $5 loss.

I can't see the whole article. Can you at least give a full quote? At which point in time did this pricing occur? From an article dated May 16, 2009:

David Baldacci, the best-selling thriller author, learned what some of his fans think when “First Family,” his latest novel, went on sale last month. Amazon initially charged a little over $15 for a version for its Kindle reading device, and readers revolted.

Several posted reviews objecting that the electronic edition of the book wasn’t selling for $9.99, the price Amazon has promoted as its target for the majority of e-books in the Kindle store. Hundreds more have joined an informal boycott of digital books priced at more than $9.99.

As for the old tactic, you can't ignore the part about "a limited number of iPhones".

[pwalker8]

The article is dated June 25, 2012. The quote is from the first paragraph -

"...In the effort to gain even greater market share, it was selling books at a loss: while publishers typically sold e-books to Amazon for about fifteen dollars apiece, Amazon was selling many of them for $9.99. Publishers were concerned that customers would come to believe that $9.99 was what books were worth, and they were desperate to have greater influence on prices. ... "

And I don't ignore the part about Amazon selling a limited set of ebooks for $9.99 rather than all of them. For example, in Feb of 2010, I bought Tongues of Serpents, the latest in a best selling series by Naomi Novik for $9.99, yet that same day, I bought By Heresies Distressed, the latest in a best selling series by David Weber for $15.39. Going through my orders from 2010, I see the same pattern. Ignoring the $7 and below books, I see a number of books for $9.99, but just as many for more, including some for quite a bit more.

[Sil_liS]

Originally Posted by pwalker8

The article is dated June 25, 2012. The quote is from the first paragraph -

"...In the effort to gain even greater market share, it was selling books at a loss: while publishers typically sold e-books to Amazon for about fifteen dollars apiece, Amazon was selling many of them for $9.99. Publishers were concerned that customers would come to believe that $9.99 was what books were worth, and they were desperate to have greater influence on prices. ... "

And I don't ignore the part about Amazon selling a limited set of ebooks for $9.99 rather than all of them. For example, in Feb of 2010, I bought Tongues of Serpents, the latest in a best selling series by Naomi Novik for $9.99, yet that same day, I bought By Heresies Distressed, the latest in a best selling series by David Weber for $15.39. Going through my orders from 2010, I see the same pattern. Ignoring the $7 and below books, I see a number of books for $9.99, but just as many for more, including some for quite a bit more.

The article is dated, the prices are not. I don't know at which point in time "publishers typically sold e-books to Amazon for about fifteen dollars apiece". This is why I asked "At which point in time did this pricing occur?" and not "At which point in time was this article published?".

And Amazon selling a limited set of ebooks for $9.99 is not the equivalent of Best Buy selling a limited number of iPhones at a loss. The equivalency would occur only if Amazon would have had the $9.99 offer for a limited number of downloads.

[pwalker8]

The question was - was Amazon getting a huge discount from publishers and thus able to sale ebooks at a price point below everyone else, or was Amazon selling some ebooks at a loss to establish market. I believe that the article pretty much shows that Amazon was selling some ebooks at a loss to establish market.

[tubemonkey]

Originally Posted by pwalker8

The question was - was Amazon getting a huge discount from publishers and thus able to sale ebooks at a price point below everyone else, or was Amazon selling some ebooks at a loss to establish market. I believe that the article pretty much shows that Amazon was selling some ebooks at a loss to establish market.

It should be up to the retailer to set the price, not the publisher. If the publisher doesn't like what a particular retailer is doing, then they should quit supplying that retailer. Rather simple.

[pwalker8]

Actually, it's considerably more complex than that. Selling for less than cost to drive out competitors was the original example of monopolistic practices. Things are rarely as simplistic, or as black and white, as some try to make it.

[jgaiser]

Originally Posted by pwalker8

Actually, it's considerably more complex than that. Selling for less than cost to drive out competitors was the original example of monopolistic practices. Things are rarely as simplistic, or as black and white, as some try to make it.

And you have proof that Amazon was attempting to drive out competition? Because you do know that loss-leader pricing has been going on for a long time in the retail industry, long before Amazon existed. The publishers tried very hard to demonize Amazon and failed. And yet here we still are with sly accusations of monopolization.

Put up or shut up.

[DiapDealer]

Nothing new under the loss-leadering sun. Nothing inherently monopolistic about it either. My small-town grocery store does it.

[PatNY]

Originally Posted by pwalker8

The question was - was Amazon getting a huge discount from publishers and thus able to sale ebooks at a price point below everyone else, or was Amazon selling some ebooks at a loss to establish market. I believe that the article pretty much shows that Amazon was selling some ebooks at a loss to establish market.

Prior to 2009 and Apple's illegal conspiracy with the publishers, Amazon was selling ebooks more or less at cost. It was only immediately prior to the illegal conspiracy or concurrent with it -- sometime in 2009 -- that Amazon's costs suddenly exceeded their $9.99 price point by several dollars per book. And this happened because the publishers suddenly withdrew wholesale ebook pricing from Amazon, instead charging for ebooks what they charged for hardcovers.

So this idea that Amazon was taking a huge hit with their ebook pricing prior to 2009 (up to $5 loss per book) and this was "typical" of their history with ebook pricing, is not supported by facts.

--Pat

[Greg Anos]

Originally Posted by pwalker8

Well, a 100 years after publishing. Long enough in the future that I probably won't see it.

We already have 95 years after publication, for which the first book rolls off Jan 1, 2019...

(Your 100 years ends 2024, or 10 years from now...)

Do you think Hollywood is going not lobby for an extension?