DOJ suing Apple over ebooks.

[stonetools]

Originally Posted by fjtorres

Right on all counts.
They could also create a joint venture to facilitate global online sales, distribution the appropriate revenue to the proper rights holders.
Or, they could create a joint venture to distribute their content for them.
The music studios tried that last decade. Didn't work because the terms of use and prices were ridiculous.
Several TV studios (FOX, ABC, NBC/Universal) currently own chunks of Hulu and it seems to be working nicely.
You don't need to break the law to team up; you just need to folllow well-established rules.

A Forbes article pointed out that if the one publisher had bought out all the others, that publisher would have been able to set any price they liked. The article said that changes in antitrust law made it difficult to prosecute predatory pricing and easy toprosecute agreements that raised prices, so the DOJ went after the easy target.
Fast forward a couple of years. Suppose Random House, the biggest of the publishers, buy out the settlement three. Then what?

[Kali Yuga]

Originally Posted by DiapDealer

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.

Agency pricing is pretty much their only alternative.

Publishers can't offer Apple or Fictionwise better wholesale terms on any basis other than volume, due to the Robinson-Patman Act.

Publishers setting prices isn't illegal -- any more than it would be illegal for an author and self-publisher to specify a price at Smashwords or B&N. What may be illegal here is the collusion, i.e. publishers getting together and saying "we need to fix Amazon's wagon," and offering one retailer (Apple) a "most favored nation" status.

That's why Random House was not targeted by the DoJ, because they (in theory) independently chose, months after the other publishers, to adopt agency pricing. The DoJ also specified that agency pricing can continue -- as long as they get rid of the "most favored nation" status.

Amazon's aggressive pricing or soon-to-be-reinstated monopoly aren't necessarily illegal either. That doesn't mean it was a good idea for the DoJ to hand Amazon control of the ebook market on a silver platter.

[DiapDealer]

Originally Posted by stonetools

A Forbes article pointed out that if the one publisher had bought out all the others, that publisher would have been able to set any price they liked.

And if your aunt had testicles she might be your uncle.
That sounds like a perfectly legal alternative for the BPHs... so why didn't they do it that way?

Originally Posted by Kali Yuga

Amazon's aggressive pricing or soon-to-be-reinstated monopoly aren't necessarily illegal either. That doesn't mean it was a good idea for the DoJ to hand Amazon control of the ebook market on a silver platter.

The DOJ claims to have evidence that Amazon's pricing wasn't quite as "aggressive" as publishers and competitors would like us to believe. That the publishers were lowering wholesale best-seller prices to very nearly the same $9.99 that Amazon was selling them them for.

[fjtorres]

Originally Posted by stonetools

Suppose Random House, the biggest of the publishers, buy out the settlement three. Then what?

Well, if we're talking a few years down the road and the companies have not changed their workflows, strategies, and overhead... Nothing.
By then their aggregate marketshare, compared to the New Publishers, wouldn't represent any significant concentration of market power and regulators wouldn't even blink at approving the deal.

That kind of concentration is actually *common*; aging, failing companies being outcompeted often huddle together to try to consolidate their fading share and maintain relevance.

We've seen it in lots of industries; autos, for one.

But the clearest example is the story of Computer Associates in the 90's; they routinely ranked right beside Microsoft among the biggest software companies in the world for years. But where MS grew by addressing a growing new market and developing new products, CA grew by buying distressed companies and stripping them and living off their existing products.

Pretty much what we can expect to happen with the BPHs if they don't change. There will be value in their back catalog long after their day to day operations cease being cost-effective. (Just look at MGM, how it keeps being sold and resold because of its IP and brand even though there isn't much of a studio there anymore.)

So your scenario is actually quite likely, say circa 2020.

[kennyc]

Originally Posted by plib

Then maybe they should throw less money at their CEOs, Manhattan offices and private dining rooms, and a little more at the people with the actual talent that provides their profits.

They might consider employing better lawyers too. $151 million will fund a lot of book research.

[sabredog]

Originally Posted by plib

Then maybe they should throw less money at their CEOs, Manhattan offices and private dining rooms, and a little more at the people with the actual talent that provides their profits.

They might consider employing better lawyers too. $151 million will fund a lot of book research.

That and fund the changes needed to drag their business and distribution model into the 21st century.

There is a fair degree of tall poppy syndrome going on here with the haters of all things Amazon. Get rid of the one company that is successful in the modern digital age and hopefully, at least to their way of thinking, everything will revert back to the "old ways" and all will be well with the world.

Amazon provides them an excuse not to change, if they can succeed in containing this "evil" company.

[wodin]

Have you ever heard such drivel?

[DiapDealer]

Originally Posted by wodin

Have you ever heard such drivel?

Far too often, actually.

[kennyc]

Originally Posted by wodin

Have you ever heard such drivel?

what an IDIOT! Way to use others in an attempt to limit his competition. I just lost a lot of respect for Smashwords

[Andrew H.]

Originally Posted by kacir

You forgot.
Lawyers for both sides rake in $1,000,000

Guess who will win this one?
Lawyers. regardless of the outcome.

That's peanuts compared to what's at stake.

And the DOJ lawyers aren't going to rake in a million dollars in any event.

[stonetools]

Well, if we're talking a few years down the road and the companies have not changed their workflows, strategies, and overhead... Nothing.

Whenever people start talking airily about " changing workflows and strategies" without mentioning specifics, that's usually code for " I don't know anything about it , but there must be something they can do, because shut up that's why".
I have seen companies "rightsize" , "paradigm shift" and "change workflows" in the past , and I can predict what will happen: the axe will fall on the usual suspects. The Settlement 3 will lose income when Amazon discounts and will shed editors, proofreaders, cover artists , sales reps, and maybe a few executives. They'll grit their teeth, bend over for two years, then return to full on agency when their sentence is up.
The arguments in favor of agency remain the same, and I expect that the retail landscape will look the same as pre-agency in two years time: Amazon will be overwhelmingly dominant , and there will be a shrinking handful of retailers taking up the rest of the market.
That's how I see it, but then I'm a hard-nosed, cynical cuss with not much truck for " paradigm shifts", "new business models", and other such unicorns.

[DiapDealer]

but then I'm a hard-nosed, cynical cuss with not much truck for " paradigm shifts", "new business models", and other such unicorns.

Which is why you're in danger of becoming as obsolete as traditional publishing is going to become.

[ProfCrash]

Or maybe the Publishers will see the light and remove DRM from books so that any book store can sell books for the Kindle and the EPub readers. That would allow the other bookstores to more easily compete with Amazon.

Part of the e-book dominance of Amazon, and while they have lost position they are still the dominant player, is because of the dominance of the Kindle in the US. We are starting to see the spread of that dominance in the UK and might see something similar in Germany, France, and Spain as the Amazon bookstore grows.

BN needs to be able to sell books and have offers that would attract a Kindle user.

[stonetools]

od premise. Name some examples: great nonfic books that only got written because of advances large enough for the author to live off them to do the necessary research.

Who are the amazing nonfic authors with the six-figure advances? Which nonfic books get TV commercials? (Besides Dianetics. Which kinda doesn't count.)

I'm not saying there aren't any, but nothing comes to mind right off.

According to THIS blog post, the average advance for a non-fiction book from a BPH has $30,000.00-substantially more than for a fiction release. Guess what type of book is likely to get the chop when Amazon starts squeezing?

I think its pretty much wishful thinking to believe things won't work out like Shatzkin said. FWIW, Teresa Hayden, editor at Tor.com and no Luddite or BPH apologist, agrees.

Amazon also wants to have the Kindle edition go on sale at the same time as the hardcover, and it wants to set a single price for the Kindle edition that undercuts the new hardcovers like crazy. This is a major problem. The revenue from hot new hardcovers is what keeps most conventional publishers afloat. It enables them to buy odd books and small books and first novels, and to put real effort into editing and packaging and promoting their books, and to pursue long-term projects like developing their authors’ careers.

In the long run, the Amazon model turns publishers into unfunded R&D labs that are obliged to turn over everything they develop to other companies at rock-bottom prices. It isn’t viable, and it’s not author-friendly in six different ways. Have you ever seen a discussion of how badly messed-up Kindle texts are? Amazon’s business isn’t about books and authors; it’s about selling units at a discount.

I like the agency model. Publishers keep doing what publishers do well. Online retailers step into something very like the role of the bookseller. Market forces continue to exert themselves in normal ways. And after decades of theories and models and way too much discussion, the ebook settles into being what it always should have been: just another repro technology, with its own strengths and weaknesses and price points.

[stonetools]

Originally Posted by ProfCrash

Or maybe the Publishers will see the light and remove DRM from books so that any book store can sell books for the Kindle and the EPub readers. That would allow the other bookstores to more easily compete with Amazon.

Part of the e-book dominance of Amazon, and while they have lost position they are still the dominant player, is because of the dominance of the Kindle in the US. We are starting to see the spread of that dominance in the UK and might see something similar in Germany, France, and Spain as the Amazon bookstore grows.

BN needs to be able to sell books and have offers that would attract a Kindle user.

Er, No. DRM is important only to the techie 1 per cent. To the 99 per cent f customers price discounts etc. will be far more important. No other retailer can match Amazon on those- except maybe Apple and Google , who don't really want to.