DOJ suing Apple over ebooks.

[Elfwreck]

Originally Posted by plib

From the dearauthor article:
...
Sounds to me as though the DOJ has a pretty complete evidence file. Apple et. al may fight, but I can't see them winning.

Yeah, while there's some allowances for "well, we've been looking for new business models with these ebooks and all that, and these terms just happen to often have higher prices" it's rather suspicious when five competitors settle on the *same* new business model and all start using it on the *same* day with the *same* percentage terms. Especially when they've publicly announced that they "need" to force customers to pay higher prices.

Right now, it's Apple, Macmillan, and Penguin facing charges, with Hatchette, HarperCollins, and S&S having settled out for unknown terms & unknown amount of info related to the whole debacle.

[JoHunt]

Originally Posted by Elfwreck

Yeah, while there's some allowances for "well, we've been looking for new business models with these ebooks and all that, and these terms just happen to often have higher prices" it's rather suspicious when five competitors settle on the *same* new business model and all start using it on the *same* day with the *same* percentage terms. Especially when they've publicly announced that they "need" to force customers to pay higher prices.

Right now, it's Apple, Macmillan, and Penguin facing charges, with Hatchette, HarperCollins, and S&S having settled out for unknown terms & unknown amount of info related to the whole debacle.

And since all members of this cabal were only "protecting their interests", it makes one wonder if they also conspired to decide which publishers would settle with the DOJ and which would fight in court.

[carpetmojo]

Above all - what is "dis-intermediation", anyone ?

We used to call stuff like this Bush-speak, but it does seem to pop up quite a bit nowadays.
Ideal for business use, of course......

http://www.independent.co.uk/news/bu...n-7643955.html

Enjoy/disagree.

[drofgnal]

An interesting response from apple finally. I doubt it will hold water.

http://content.usatoday.com/communit...1#.T4ljLRwrjnI

[fjtorres]

Originally Posted by carpetmojo

Above all - what is "dis-intermediation", anyone ?

Business-speak.
Disintermediation is the process of by-passing a previously important/indispensable intermediary (middleman) in the supply chain of a product.

http://www.marketingterms.com/dictio...ntermediation/

Intermediaries survive by adding value. If changes in the marketplace renders an intermediary’s role less valuable, then the intermediary must adapt. If not, the old intermediary will often be replaced by a new, more valuable intermediary.

In getting a pbook from author to reader there is a whole chain of steps: author to agent to publisher to printer to warehouse to distributor to retailer.

In getting an ebook from author to reader the process can be as short as: author to PubIt to Nook store to reader. Everybody who didn't get their pound of flesh is being disintermediated. And not enjoying it.

As the definition says, if you don't add *visible* value you don't survive.

And, about the "more valuable intermediary": for all that we talk and approve of direct publishing by authors, the biggest threat to the BPHs isn't self-publishing. It is New Publishing, the new ebook-first publishing houses that are popping up all over; these houses provide all the added-value of the traditionalists (and often more) and do it better, for less (read: bigger royalties for authors).

In the pre-ebook era, small publishers had a harder time getting product onto retailer shelves and were often crowded out of many retail channels. In the ebook era, not only are "shelves" infinite, the smaller publishers have lower overhead and risk less on every book they take on than the BPHs so they can take on projects with narrower but deeper appeal. Which is one reason the genres have exploded in the ebook era.

The BPHs and their apologists are obsessed with Amazon becoming the "more valuable intermediary" when the real threat to their high-overhead traditionalist model is all around us in the form of small, agile, low-overhead ebook-first publishers.
(Expect to see lots more cases like 50 Shades of Gray...)

[fjtorres]

Originally Posted by BeccaPrice

Quote:


this is the stupidest argument! no one says to themselves "well, my Great Novel won't sell for $35 a copy if I write it, so I'm not going to bother."

Well, there *was* that Spanish "author" who publicly stated she was getting out of the business because her "masterpiece" was getting pirated and not generating enough money.

Applause followed.
(She had a shady reputation to start with.)

As we used to say in my day job: "You don't go into engineering if you just want to be rich." Also, "If you want to be rich without working, go into politics instead."

[Elfwreck]

Originally Posted by drofgnal

An interesting response from apple finally. I doubt it will hold water.

http://content.usatoday.com/communit...1#.T4ljLRwrjnI

Heh. "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry," says Neumayr. "Since then customers have benefited from eBooks that are more interactive and engaging."

Riiiight. Competition among *whom,* is the question. And I noted that he didn't say "Customers paid less for ebooks." Customers who can't afford them, don't benefit from "more interactive" ebooks. (Also: WTF? "More interactive and engaging" ebooks aren't the topic of this lawsuit. Nobody else is selling ebook apps.)

I'm also *endlessly* fascinated by the claim that Amazon ruled the publishing industry with an iron fist. Because, wtf, if you don't like the retailer, don't sell to that retailer. Publishers had plenty of opportunity to support Fictionwise, Diesel, and other ebook stores... they wanted Amazon's publicity engine but not Amazon's sales terms.

At this point, I don't particularly *care* what happens as a result of the court case. The three settlements mean the Agency Block is broken; with 3 out of 6 BPHs switching to more flexible pricing terms, Apple will have to either allow that flexibility or lose 1/2 of its BPH iBooks entries, the "publisher set this price" things at Amazon will no longer be the majority, and smaller ebookstores--ARE, Fictionwise, Kobo--will be able to play coupon-and-discount games to draw in customers.

[ProfCrash]

I am fascinated by the idea that Amazon was a monopoly when Apple had yet to even enter the market, BN was about a year into the e-market, and Kobo was relatively new. Yes, Sony had been there but even people who owned Sony's before the Kindle would tell you that the bookstore sucked.

So Amazon was a bad, evil, monopoly because they put together the first successful, large e-book store before three other competitors even entered the market?

Before you entered the market?

Really?

That is your argument?

Seriously?

I think a second grader might be able to find a problem or two with that logic.

[fjtorres]

Originally Posted by stonetools

The funny thing is that when the Nook tablet refresh doesn't arrive next year, people will be wondering why....

Careful what you "ask" a contrarian.

The NookColor was generally well-received round these parts and in the hobbyist communnty at large. It certainly got B&N a lot of press in the tech community. And they beat Amazon to market by a year.

Funny thing, though; the NookColor only sold 250K units in its first year on the market. It (apparently) did wonders for B&N's magazine business but the app business is languishing and they do spend a fair amount of time fighting the hackers. It isn't particularly clear how much that entire line advances B&N's market position since, unlike Amazon, they don't have an inhouse media business. Regularly refreshing those tablets might just be more effort than they're worth.

So, in the spirit of contrarian-ness: would it really be a bad idea for B&N to slow their tablet refresh rate and instead ride the price curve down? It's not as if the current hardware is inadequate to their *core* books and mags business. Would it be a bad idea if the next Nook Tablet is a rebadged generic?

B&N is not Amazon. This is bad and it is good.
If they only focus on doing the exact *same* things as Amazon, then yes; they'll be in trouble. But if they focus on doing things Amazon *can't* (ship-to-store on internet pbook orders is the most obvious--Amazon's lockers being evidence Amazon sees this as a weakness) then they *can* prosper.
B&N's biggest problems vs Amazon come from where they are playing catch-up and the evidence so far suggests their management knows they need to go places Amazon isn't. NookColor was a nice attempt. It didn't pan out but it shows they can outflank them from time to time. (And if the next battleground is going to be education--as seems most likely--B&N has a huge untapped resource in the college bookstores.)
They are *not* passive victims.
They are still serious players.

And if investors aren't flocking to them a mere 48 hours after the Conspirators got called on the carpet, it may simply be that they are updating their spreadsheets.

B&N tried to sell themselves off last year while under the Price Fix regime. Who knows if, freed of it, they might be worth picking up for a media or tech company? Those are business where market share and growth prospects outweigh short-term profitability. (Just ask Rakuten.)

It'll take time (60-days plus) to evaluate the full impact of *limited* ebook discounting regimes. (Let's not gloss over that, while the feds blessed ebook discounting and loss leaders, they also hard-wired restrictions into their endorsement. Many of us see that as a boost for B&N and others not named Amazon.)

When it comes to evaluating the final impact of the DOJ case we first need to see how just which changes do get implemented and *how*. Way too early to be writing off B&N or bemoaning the end of the world.

The only thing certain is that change is imminent. And the only people who *need* to be afraid are those that fear change because they want stasis.

Those are the only guaranteed losers.
But then, they were guaranteed to lose anyway.

[Elfwreck]

Originally Posted by ProfCrash

So Amazon was a bad, evil, monopoly because they put together the first successful, large e-book store before three other competitors even entered the market?

To be fair, there were several other ebook stores for years before Amazon entered the game, and again after they quit selling PDFs in 2007 just before they bought Mobi, and Amazon leeched customers from all of them. Amazon's cross-media approach to ebooks, where it could use its pbook listings to mention "hey! We have ebooks! Which are only useful if you buy our $350 device! Which is awesome!" had a much bigger impact on the market than ereader.com's slow sales of the eBookwise, or later, Sony's walled-garden store. People only went to those stores if they were already interested in ebooks; Amazon had a captive audience that it could pitch ebooks to.

But Apple is, of course, not mentioning the damage Amazon did to Fictionwise and Diesel and BooksonBoard and Mobipocket.com and AllRomanceEbooks, because Apple doesn't want any consideration of the damage *it* did to those stores with the Agency pricing deal.

[Kali Yuga]

Originally Posted by Elfwreck

Customers who can't afford them, don't benefit from "more interactive" ebooks....

So someone who can afford to spend $10 on an ebook can't possibly afford to spend $13?

Originally Posted by Elfwreck

I'm also *endlessly* fascinated by the claim that Amazon ruled the publishing industry with an iron fist. Because, wtf, if you don't like the retailer, don't sell to that retailer.

That's not really an option.

The publishers are not legally obligated to sell through a specific retailer. However, by the time Amazon started throwing its weight around, the publishers could not afford to just pull their books from Amazon. (What do you think would have happened if Scholastic refused to supply Amazon with Harry Potter books, because Amazon discounted them too heavily?)

Retailers can also get paper books from distributors. Publishers can increase Amazon's costs a little bit, but really can't stop them from selling altogether.

Originally Posted by Elfwreck

Publishers had plenty of opportunity to support Fictionwise, Diesel, and other ebook stores... they wanted Amazon's publicity engine but not Amazon's sales terms.

Briefly put, publishers can't discriminate on their prices, except based on volume.

Amazon is around 60% of the market; at one point they were closer to 90%. There is no legal way for the publishers to aid Fictionwise enough to grow their market share by 10% or 20%. Amazon can also afford to offer bigger discounts on day-to-day prices and targeted sales.

The closest the publishers could do is level the playing field. Without that, everyone else (except Apple -- maybe) is screwed. I don't think Fictionwise and Kobo will go out of business, since they don't have the huge overhead of a big store like B&N; Kobo also seems fairly savvy. But they are likely to end up like Rhapsody -- a bit player in a market dominated by a single retailer.

[scrapking]

Some people seem to take as an article of faith that an end to agency is in Amazon's best interests and will hurt competition. If that's the case (I'm not saying it is, but for the sake of argument), I'd like to see agency supporters within this industry discuss this Kobo blog post from February 2010: http://blog.kobobooks.com/when-publi...with-pictures/

I haven't heard any suggestion that Kobo's changed their tune on agency since.

[DiapDealer]

The closest the publishers could do is level the playing field. Without that, everyone else (except Apple -- maybe) is screwed.

You seem to be implying that illegal collusion and price fixing was the publishers' only alternative here. Even if that were true, I can't see how it matters.

[fjtorres]

Here's a pretty good assessment of exactly *why* the Conspiracy was stupid and counterproductive and why the apologists need to get over it:
http://eoinpurcellsblog.com/

So the legacy system made a calculation that Agency could be gotten away with, and they were wrong. It might have boosted their revenues, given them a huge sense of control and power (attractive in a publishing world that has been so buffeted by change recently) but now, as the tide of blood rushes back out of the head and calmer times (populated by longer more reflective periods of courtroom drama and negative headlines) lie ahead perhaps the big six and those who favoured Agency might reflect not on the loss of Agency and it’s ‘possible’ negative consequences for their business models but on the loss of the moral ground, the real loss of the audience’s goodwill and the battle, not to maintain not just profitability, but, more importantly, legitimacy and to rebuild their image among readers the world over.

The first step in building a sane and legal ebook business is to stop pining for the dead past.

Time to bury the dead and move on.

[fjtorres]

Originally Posted by DiapDealer

You seem to be implying that illegal collusion and price fixing was the publishers' only alternative here. That might be true, but I can't see how it matters.

It *doesn't* matter.
Antitrust law doesn't care about motives or intentions when deciding who is a criminal. At best it might lead to a lesser penalty for those that quickly 'fess up. Those that insist on fighting just use up any last shreds of good will that might remain.