Amazon vs Hachette

[tubemonkey]

Originally Posted by fjtorres

Bezos says: "Bless you, monkey, for you and your breed are legion."

[rhadin]

Originally Posted by HarryT

I know at one time the publishers tried to get around this by claiming that Amazon were acting as their agent, rather than as a retailer (an agent DOESN'T have the right to change the price), but wasn't this ruled to be invalid as a part of the "agency pricing" court case?

No, it wasn't ruled invalid and beginning this fall, each of the publishers who settled with the Department of Justice can impose agency pricing. It was the "collusion" to impose agency pricing that was invalid, not the agency pricing itself.

I suspect that this is Amazon's opening gambit in hopes of destroying the phoenixing of agency pricing before the fire starts. A worthwhile blog article to read is Mark Coker's at Smashwords: Amazon's Hachette Dispute Foreshadows What's Next for Indie Authors.

Anyway, as long as each publisher imposes agency pricing without "colluding", it can be imposed again. Smashwords uses agency pricing.

[HarryT]

Originally Posted by rhadin

No, it wasn't ruled invalid and beginning this fall, each of the publishers who settled with the Department of Justice can impose agency pricing. It was the "collusion" to impose agency pricing that was invalid, not the agency pricing itself.

Thanks, Richard. I appreciate the information.

[rhadin]

Originally Posted by HarryT

So Hachette are whining about the fact that Amazon are refusing to discount books out of their cut of the retail price? My heart bleeds for the poor dears. How obvious it is now that Amazon are acting in an evil manner!

No, Harry, you have it wrong. What Amazon wants is not only to be able to set whatever discount price it wants but for the publisher to pay for any losses Amazon incurs by such discounting. The method of payment is to reduce the amount of money that Amazon pays the publisher. If Amazon currently pays the publisher 50% of the suggested retail price (that is, if the suggested retail price is $30 the wholesale price is $15), it wants to reduce that 50% it pays by some amount across the board (that is, on every book it buys wholesale from Hachette). That would enable Amazon to -- if it wants to -- discount the book even further yet retain its profit margin.

Read Mark Coker's explanation. It really is quite good. See Amazon's Hachette Dispute Foreshadows What's Next for Indie Authors.

[rhadin]

Originally Posted by eschwartz

80% != 100%

Competition has not been eliminated. Those are the cold hard facts, and you cannot get around them.

Come back when Amazon actually has 100% of the ebook market, thus qualifying as an ebook monopoly.

Your definition of monopoly (100% of market) is NOT the legal definition of monopoly. Whether an entity qualifies as a monopoly is determined by market share plus influence in market. An entity can be a monopolist with only a 40% market share.

When IBM was declared a monopoly, it didn't have 100% of the server market but it had such a dominant position that the market share plus influence it had made it a monopolist.

[HarryT]

Originally Posted by rhadin

Your definition of monopoly (100% of market) is NOT the legal definition of monopoly. Whether an entity qualifies as a monopoly is determined by market share plus influence in market. An entity can be a monopolist with only a 40% market share.

It should be noted, however, that being a monopoly is not illegal. What is illegal is abusing a monopoly position to disadvantage either customers or suppliers. It's absolutely fine to be a monopoly and conduct business fairly.

[rhadin]

Originally Posted by HarryT

It should be noted, however, that being a monopoly is not illegal. What is illegal is abusing a monopoly position to disadvantage either customers or suppliers. It's absolutely fine to be a monopoly and conduct business fairly.

Yes, that is correct, Harry, in textbooks but not in the view of the Department of Justice generally. The real-world take on monopoly is that monopoly is bad. A good example is the breakup of AT&T when it provided nearly all of the telephone service in the United States. Everyone agreed that the service was good, and pricing was set by government agencies. The compelled breakup occurred because there was a shift in thinking regarding monopolization: it went from a good monopoly is OK to monopoly is inherently bad.

[din155]

Originally Posted by rhadin

Yes, that is correct, Harry, in textbooks but not in the view of the Department of Justice generally. The real-world take on monopoly is that monopoly is bad. A good example is the breakup of AT&T when it provided nearly all of the telephone service in the United States. Everyone agreed that the service was good, and pricing was set by government agencies. The compelled breakup occurred because there was a shift in thinking regarding monopolization: it went from a good monopoly is OK to monopoly is inherently bad.

Yes, you are right. But comparing monopoly of a utility provider to a book seller seems a bit farfetched to me. Changing to a different retailer for books is much easier than changing utility provider, monopoly or not.

[rcentros]

Originally Posted by din155

Yes, you are right. But comparing monopoly of a utility provider to a book seller seems a bit farfetched to me. Changing to a different retailer for books is much easier than changing utility provider, monopoly or not.

Yep. I don't think there was any choice of changing your telephone service provider -- at all -- when AT&T and GTE were the two main telephone companies. Definitely not the case with books.

[fjtorres]

Originally Posted by rcentros

Yep. I don't think there was any choice of changing your telephone service provider -- at all -- when AT&T and GTE were the two main telephone companies. Definitely not the case with books.

Just yesterday, Target joined the ebook-vending fray and Feedbooks acquired a very good ebook reading app to front their bookstor (aldiko).

They certainly don't seem to think Amazon's "monopoly" is unassailable.
Oh, and if Target is in the game, can Walmart be far behind?

[fjtorres]

When Amazon offered to cofund a "reparations" fund for authors, they pointed out that they are aware of exactly how authors are impacted.

Here's a hint:
http://authorearnings.com/the-effect...-negotiations/

Yup, more "toxic" data from the guys with "an agenda".

Our data set on the 85,000 best-selling Kindle e-books includes 1,363 titles from Hachette. A comparison of our February and April data bears out what these authors are reporting: Hachette-published e-books are on average slipping in Amazon sales rank and falling off the charts much faster than works published by the other Big-5 publishers.

Hachette’s total estimated unit sales dropped from 47,000 in the February dataset (5.9% of the total pie) to 38,000 in the April dataset (4.4% of the total pie), despite the latter dataset capturing more books overall (85,000 vs 54,000).

Between February and April, Hachette’s Kindle e-book unit sales have fallen 20% – 25%, depending on whether we are looking at relative market share or at absolute numbers.

That being ebook data, shipping times aren't at issue. Just Amazon reducing their *discretionary* discounts and promotion.

[BearMountainBooks]

THanks for posting that Fjorres. I thought it was a pretty calm response, as well as professional.

I didn't care for Smashword's article on the subject. I found it slanted and "talking his book." It's in Mark's best interests to get people to use Smashwords and diversify so while I agree that diversifying is very important, I thought there was a bit too much fear-mongering and slanting in the way some of the info was presented.

Amazon is in a powerful position, but publishers and indies have helped put them there. It isn't too late to do something about that, but I think it's important to stick to facts. People can and do still buy from other vendors. More authors are starting to put links to other retailers on their blogs, especially after this incident. That's been a long time in coming.

[elemenoP]

Ok, this strong-arming tactic is making me laugh, check out "Similar Items at a Lower Price" at the top of this Hachette book:

http://www.amazon.com/Rise-Again-Dec...dp/B00EXTQV70/

I want to read a novel with a blue cover. I can save two dollars by choosing a different novel with a blue cover! (I'm the algorithm is more sophisticated than that... but still, the message here is that these books are interchangeable so why not choose a cheaper one.)

eP

[Synamon]

Originally Posted by elemenoP

Ok, this strong-arming tactic is making me laugh, check out "Similar Items at a Lower Price" at the top of this Hachette book:

http://www.amazon.com/Rise-Again-Dec...dp/B00EXTQV70/

I want to read a novel with a blue cover. I can save two dollars by choosing a different novel with a blue cover! (I'm the algorithm is more sophisticated than that... but still, the message here is that these books are interchangeable so why not choose a cheaper one.)

eP

Scroll down, those books appear in the "Customers Who Bought This Item Also Bought" section, so I doubt the colour of the book cover was a factor.

[sirmaru]

If I have to deal with an eBook monopoly, I'd much prefer it to be Amazon over Apple. The former is a customer benevolent organization in every way.