Cost of eBooks vs dead-tree books

[darryl]

Originally Posted by leebase

Or...if we open the book to the earlier chapter....

FIRST act of aggression was AMAZON putting the ENTIRE NYT Best Sellers list on sale for $9.99 when the going rate was $25 to $30 for a hard back.

Amazon did this to prop up the sales of their $500 ebook reader.

Publishers did not want $9.99 to become the "new book price". There IS NO REASON books cost $25 to $30 in hard back form. It's simply a cost the market would bear.

Cheaper paper back books cost less, NOT HAVING ANYTHING TO DO WITH REDUCED PRODUCTION COST -- but merely as a way to sell books to people who couldn't afford the hard back book.

The hard back book is the only version sold at first so -- while a book is in it's highest demand form, it's at it's most profitable price.

Amazon was threatening the very heart of the profits of the publishers.

Amazon was SO POWERFUL that individual publishers feared taking them on by themselves. They were ALL angry about the situation.

Without Apple, ebooks would have become time windowed -- just like the paper back version.

Apple got mixed up in this ALREADY ONGOING TUG OF WAR. But Apple certainly did NOT create this problem -- AMAZON DID.

Apple with it's impending iPad device was the very thing the publishers thought could take on Amazon's stranglehold. Apple, didn't intend for one moment to go into the "sell ebooks at a loss" business.

Apple and the publishers had to pay a big fine. But -- there were only EVER going to be 2 possible outcomes. Time window ebooks, or let the publishers set the prices for ebooks...thus Amazon and all sellers became "agents" not "retailers" with respect to ebooks.

You can thank AMAZON for this.

Amazon was engaging in legal price competition, a concept then largely foreign to the Industry. Apple and the Publishers concerned were engaging in illegal collusion.

[John F]

Originally Posted by leebase

Or...if we open the book to the earlier chapter....

FIRST act of aggression was AMAZON putting the ENTIRE NYT Best Sellers list on sale for $9.99 when the going rate was $25 to $30 for a hard back.

...

Wasn't $25 to $30 the suggested "list price"? The "going rate" was more likely much lower?

Looking at the current price of hardcover NY times best sellers on Amazon (first 2 pages), the prices range from $14.02 - $17.39.

[DiapDealer]

Originally Posted by John F

Wasn't $25 to $30 the suggested "list price"? The "going rate" was more likely much lower?

That is correct. Nobody ever paid the sticker-price for hardcovers.

[pwalker8]

Originally Posted by darryl

Amazon was engaging in legal price competition, a concept then largely foreign to the Industry. Apple and the Publishers concerned were engaging in illegal collusion.

Yes, loss leaders are legal. But contrary to some others here who pound the tables and scream that any practice that doesn't result in them getting cheap eBooks is illegal, that's not the argument. The argument is that Amazon's attempt at gutting the publishers' business model was a shot across the bow that the publishers couldn't ignore and the response was going to be either agency pricing or time windowing the release of eBooks. If Amazon had been willing to negotiate in good faith, perhaps they could have reached a compromise, but Amazon was using the Walmart business model which is to strong arm the suppliers whenever they could get away with it.

[John F]

Originally Posted by pwalker8

Yes, loss leaders are legal. But contrary to some others here who pound the tables and scream that any practice that doesn't result in them getting cheap eBooks is illegal, that's not the argument. The argument is that Amazon's attempt at gutting the publishers' business model was a shot across the bow that the publishers couldn't ignore and the response was going to be either agency pricing or time windowing the release of eBooks. If Amazon had been willing to negotiate in good faith, perhaps they could have reached a compromise, but Amazon was using the Walmart business model which is to strong arm the suppliers whenever they could get away with it.

Got it. So in the future, if someone is going to gut my business model, go ahead and break the law.

[leebase]

Originally Posted by darryl

Amazon was engaging in legal price competition, a concept then largely foreign to the Industry. Apple and the Publishers concerned were engaging in illegal collusion.

That was not tested by court actions.

[John F]

Originally Posted by leebase

That was not tested by court actions.

What wasn't tested?

From wiki:

In July 2013, US District Court Judge Denise Cote found Apple guilty of conspiring to raise the retail price of e-books and scheduled a trial for 2014 to determine damages.[4]

In June 2014, Apple settled the e-book antitrust case out of court with the States; however still appealed Judge Cote's initial ruling.[5]

In June 2015, the 2nd US Circuit Court of Appeals, by a 2-1 vote, concurred with Judge Cote that Apple conspired to e-book price fixing and violated federal antitrust law.[6][7] Apple appealed the decision.

In March 2016, the Supreme Court of the United States declined to hear Apple's appeal that it conspired to e-book price fixing therefore the previous court decision stands, which means Apple must pay $450 million.[8

[binaryhermit]

And the end result after Apple and the publishers got slapped by the courts was essentially the same as what they achieved via collusion, sadly.

[ownedbycats]

Apple paying $450 million is probably just a drop in the bucket for them.

[pwalker8]

Originally Posted by John F

Got it. So in the future, if someone is going to gut my business model, go ahead and break the law.

Or hope the guy who guts your business model doesn't write the brief for the prosecutor and isn't as good at judge shopping as Amazon.

The publishers eventually got their way because there is absolutely nothing illegal about agency pricing. Once Amazon got Apple out of the way and the Kindle store was firmly established, they really didn't care about agency pricing. Yes, they did try to play hardball with the first publisher whose contract came up, but they got a lot of bad press by their bullying tactics and Cote wouldn't ride to their rescue a second time, so why bother? The publishers got what they wanted and Amazon got what they wanted (a deep pocketed competitor shuffled off to the sideline). That is why you don't get all eBooks dirt cheap, not because Apple and the publishers = bad.

[DiapDealer]

Originally Posted by pwalker8

The publishers eventually got their way because there is absolutely nothing illegal about agency pricing.

And you know perfectly well the lawsuit against Apple was never about whether agency pricing was legal or not (which was never in question).

[pwalker8]

Originally Posted by DiapDealer

And you know perfectly well the lawsuit against Apple was never about whether agency pricing was legal or not (which was never in question).

I have no idea how you managed to project that on what I said.

The lawsuit against Apple was on the novel legal theory put out by Amazon that Apple was guilty of conspiracy by agreeing to use agency pricing with the various publishers. The publishers without doubt did conspire, though at least one judge thought they were justified in doing so.

[DiapDealer]

Originally Posted by pwalker8

I have no idea how you managed to project that on what I said.

Originally Posted by John F

Got it. So in the future, if someone is going to gut my business model, go ahead and break the law.

Originally Posted by pwalker8

The publishers eventually got their way because there is absolutely nothing illegal about agency pricing.

You're right. Given the following sequence of events, it's almost impossible to make the assumption that you were claiming they did not, in fact, break the law.

[leebase]

Originally Posted by John F

What wasn't tested?

From wiki:

Amazon's actions were NEVER tested in court. WHY companies colluded was ruled out.

The state, nor the publishers, never went to court about Amazon's actions. And it was AMAZON the precipitated the publisher's reactions.

[John F]

Originally Posted by leebase

Amazon's actions were NEVER tested in court. WHY companies colluded was ruled out.

The state, nor the publishers, never went to court about Amazon's actions. And it was AMAZON the precipitated the publisher's reactions.

What actions by Amazon weren't tested by the courts? If Apple or the publishers thought Amazon was doing something illegal, they should have pursued legal means.

Are you really saying because something isn't tested in court it is illegal?