DOJ suing Apple over ebooks.

[fjtorres]

[QUOTE=stonetools;2039042Amazon can therefore discount SOME bestsellers. But $9.99 for all the bestsellers is out the window and using ebooks as a loss leader will be limited.[/QUOTE]

Don't bet on that.
The so-called bestsellers don't add up to that much of Amazon's Kindle business or even enough of each publisher's share of Kindle business to stop them from doing it. Worst case scenario, they can do it on a rotating basis; just enough to annoy the ABA club.

The thing is Amazon doesn't need Bestsellers to move Kindles any more. On the contrary, bestsellers may need Kindles to move.

[JSWolf]

I think that if Amazon wasn't selling the big 6, sales of ePub readers would skyrocket.

[stonetools]

Originally Posted by Kali Yuga
I'd also be careful what you wish for. If agency pricing is killed, publishers may go back to windowing, e.g. delaying ebook releases by 3-6 months after the hardcover release, in order to protect hardcover margins.

I really do think windowing is dead and gone forever.

[vaughnmr]

Originally Posted by stonetools

Amazon can therefore discount SOME bestsellers. But $9.99 for all the bestsellers is out the window and using ebooks as a loss leader will be limited.

So what percentage of their catalog are the bestsellers? Sounds to me like they could discount all the bestsellers if their entire catalog was large enough.

[Kali Yuga]

Originally Posted by fjtorres

The so-called bestsellers don't add up to that much of Amazon's Kindle business or even enough of each publisher's share of Kindle business to stop them from doing it.

Oh?

Let's take a hypothetical best-seller that sells 500,000 ebook copies. A price war ensues, and the retailer takes a $2 loss on every copy. That's a $1 million hole they need to climb out of. That's going to limit their ability to slash prices on other books by that publisher -- especially if it happens to be a publisher like Scholastic, which has a small number of very big sellers, and a lot of "long tail" books.

Several big retailers may be willing to treat selected best-sellers like loss leaders, but that doesn't mean they aren't important to the retailers.

Or, to put it another way: The more heavily they discount the best-sellers, the less latitude they have to cut prices on other ebooks.

[fjtorres]

Originally Posted by Fbone

Interesting. How would a retailer implement this, if the publishers approves. For every book sold $5 below cost the retailer has to sell one $5.01 above cost or five books $1.01 above wholesale price or something in between. Sell too many at a loss (bestseller, perhaps?) and the retailer may not show a profit for the publisher's entire catalog.

Easily.
Modern retailers do it all the time.
Check here:
http://dealicacy.com/?p=225

Or check Amazon's daily hour-by-hour gold box deals or their Black Friday deals. They can track sales and inventory on a transaction by transaction basis with them newfangled computer gizmos.

All they have to do is track the number of loss leader and number of profit-making sales.

The feds are trying to do the BPHs a favor by getting them to understand that you don't have to make a profit on every single ebook sold and that there is *more* money to be made overall by increasing the *total* volume of product sold.

[stonetools]

Originally Posted by fjtorres

Don't bet on that.
The so-called bestsellers don't add up to that much of Amazon's Kindle business or even enough of each publisher's share of Kindle business to stop them from doing it. Worst case scenario, they can do it on a rotating basis; just enough to annoy the ABA club.

The thing is Amazon doesn't need Bestsellers to move Kindles any more. On the contrary, bestsellers may need Kindles to move.

Er, bestsellers are most likely the bulk of Amazon's sales, both electronic and print . There is a reason Amazon caved so quickly against Macmillan.

[fjtorres]

Originally Posted by Kali Yuga

Or, to put it another way: The more heavily they discount the best-sellers, the less latitude they have to cut prices on other ebooks.

From *that* one publisher.
Those rules only apply to the BPHs, not the rest of the publishing industry.
Amazon just might be willing to live off the profits from the rest of their catalog.

If anything, the extent to which Amazon discounts BPH books will be a good test of how important they are (or aren't) to the Kindle business. The less they discount them, the less competitive advantage they see to that discounting.

Things have changed a *lot* in the two years of the Price Fix Conspiracy; Kindle installed base has grown to something like 20 million instead of the 2-3 million it was before and Kindle entry-level prices have dropped from $189 to $69. Factor in the new markets they are playing in and that the US market may by plateau-ing and Amazon has a lot more flexibility than they had when they forced them to yield to the conspiracy.

At some point I think we'll see just how much money this conspiracy has cost the BPHs and their stockholders and I don't think the bill is going to be small. We have yet to see all the consequences.

[fjtorres]

Originally Posted by stonetools

Er, bestsellers are most likely the bulk of Amazon's sales, both electronic and print . There is a reason Amazon caved so quickly against Macmillan.

Two years ago.
Lots of things have changed since then. Even then the BPHs all together added up to well less than 50% of Amazon's business and that number has *not* gone up. (The number I saw at the time said their *print* share was barely 40%.)

More importantly, the real question is where do the bulk of their ebook *profits* come from. Amazon carrying BPH books is just matching the competition but unlike their competition, they can afford to sell all BPH books at cost and live off the rest of their business.

No matter how you slice it, Amazon (and Adobe) are the big winners here. Kobo and B&N probably will also come out ahead. Even Sony might benefit, if they ever fix their ebookstore.

The only assured losers here are the BPHs...

...and maybe Apple if they are forced into antitrust-compliance oversight at some point. Given that this is the *second* conspiracy Apple has gotten caught at in the last three months their penalties are not going to be limited to their iBooks operation, which is probably why they are still fighting.

[stonetools]

Amazon is clearly the big winner. Most everyone else in the book industry loses. That's not me. That's industry expert Mike Shatzkin:

LINK

Most industry insiders agree with him. We'll see.

[DiapDealer]

Originally Posted by stonetools

Amazon is clearly the big winner. Most everyone else in the book industry loses. That's not me. That's industry expert Mike Shatzkin:

LINK

Most industry insiders agree with him. We'll see.

I think you probably mean most BPH insiders agree with him, right? Again... hardly surprising or indicative of much.

[sabredog]

Originally Posted by stonetools

Amazon is clearly the big winner. Most everyone else in the book industry loses. That's not me. That's industry expert Mike Shatzkin:

LINK

Most industry insiders agree with him. We'll see.

Yes, the Bezosaurus Rex, so feared by the Big 6 and feared/loathed by Apple.

Well the agency 6 buried their heads in the sand like proverbial ostridges, then they wonder why the Bezosaurus came along and bit them on the arse?

The fear frenzy continues to be whipped up by haters of Amazon.

[sabredog]

How Australian media is beginning to report the DoJ decision

http://www.news.com.au/technology/ap...-1226324497666

[dkperez]

From this end of things, I don't care. I think ALL the Big 6 are a bunch of rapacious scumbags that would do anything - legal or otherwise - to protect their ability to extract as much money as possible for their product.

I want the most availability of ebooks as cheaply as I can get them. And I want them from ALL the scumbag publishers in the public library at reasonable prices so I can try new authors and series. I've never believed in the pitiful cries of poverty coming from the publishers, and I'm sure not gonna start now.

So, B&N, how 'bout standing up and getting in this urination contest...

[tubemonkey]

In September 2008, Penguin Group CEO John Makinson was joined by Macmillan CEO John Sargent and the CEOs of the other four large publishers at a dinner meeting in "The Chefs Wine Cellar," a private room at Picholene. One of the CEOs reported that business matters were discussed.

United States Department of Justice (2012-04-11T07:00:00+00:00). United States v. Apple, Inc. et al (Kindle Locations 176-178). Kindle Edition.

Sounds like a meeting of Dons in some mafia movie.