Is Amazon likely to acquire a Big 5 publisher? And, if so, what would it do with it?

[pwalker8]

Originally Posted by SteveEisenberg

There isn't much difference between the claim in your first sentence, and "public service," except for a judgment about mental state.

Now, if you said that Bezos owns the Post for the same reason that Amazon pays money to lobbyists (and you didn't say that one!), I would disagree.

In case someone here does think it, there's a pretty good empirical test. No business, or business mogul, is going to have any tolerance of criticism from lobbyists it pays. So if the Post publishes even a few negative articles about Bezos and/or Amazon, it proves to me that, at least in Bezos's not-insane mind, he is running it a public service rather than as a lobby for his interests. And -- here is the evidence of negative articles:

How Jeff Bezos Reacts to 'Negative' Amazon Articles in Washington Post

Amazon Key is Silicon Valley at its most out-of-touch

I think that your assumption of no toleration to criticism is very much in error. Heck, Bezos even sells books highly critical to him on Amazon. Suppressing all negative articles is a very ham-fisted way of influencing public opinion. The normal way one measures such things is looking at percentage of positive and negative articles and compare that percentage to it's competitors.

[darryl]

Originally Posted by pwalker8

In the US, Appellate Courts defer to the trial courts on points of fact, they very rarely will correct facts on appeal. Appeals typically are on specific points of law. It is not uncommon for an Appellate Judge to suggest if an appeal had been made on a different point of law, it might have been successful. The narrow focus of appeals seems to be one of the major differences in US law and the rest of the world.

You do understand that a large part of the reason that the US Supreme Court declined to hear the case was because Scalia had died and they were in a 4-4 ideological dead lock. They declined a lot of cases during that time period for reasons that had nothing to do with the merits of the case.

You are comparing apples and oranges. Of course, no one actually has the figures, but a more valid comparison would be percentage of sales for a given book. Book sales are much like movie sales in that the overall sales figures tend to be driven by block busters. We haven't had a true block buster novel in a few years. Arguably the last big block buster was Fifty Shades of Grey which had a somewhat skews sales figures in favor of digital sales (29 M in print and 15 M digital in 2012 according to some estimates).

I think you are now going to ridiculous extremes to defend your opinion. In particular, I find that your pronouncements on the law are often ill-informed and bizarre, this being no exception.

The Appeal Court decision contained the following under the heading "Standard of Review".

Following a bench trial, this Court reviews the “district court’s findings of fact for clear error” and its “conclusions of law and mixed questions de novo.”** Connors v. Conn. Gen. Life Ins. Co., 272 F.3d 127, 135 (2d Cir. 2001); see Fed. R. Civ. P. 52(a).**The district court’s evidentiary rulings and its fashioning of equitable relief are reviewed for abuse of discretion.**See Zerega Ave. Realty Corp. v. Hornbeck Offshore Transp., LLC, 571 F.3d 206, 212‐13 (2d Cir. 2009) (evidentiary rulings); Abrahamson v. Bd. of Educ. Of the Wappingers Falls Cent. Sch. Dist., 374 F.3d 66, 76 (2d Cir. 2004) (equitable relief).

You may also find this excerpt from the Appeal Courts decision interesting.

In the short term, these members of the Big Six thought that Amazon’s lower‐priced ebooks would make it more difficult for them to sell hardcover copies of new releases, “which were often priced,” as the district court noted, “at thirty dollars or more,” Apple, 952 F. Supp. 2d at 649, as well as New York Times bestsellers.**Further down the road, the publishers feared that consumers would become accustomed to the uniform $9.99 price point for these ebooks, permanently driving down the price they could charge for print versions of the books.**Moreover, if Amazon became powerful enough, it could demand lower wholesale prices from the Big Six or allow authors to publish directly with Amazon, cutting out the publishers entirely.**As Hachette’s Young put it, the idea of the “wretched $9.99 price point becoming a de facto standard” for ebooks “sickened” him.

SCOTUS declined to grant certiorari (ie; to hear the case). As is customary, they did not give reasons. Though you were apparently privy to what took place in chambers, since you equivocally state such reasons. Also, if the judges were, as you say, "in a 4-4 ideological dead lock", cert would have been granted by 4 of your hypothetical pro-Apple justices. It only takes 4 justices to have the Court grant Cert and hear the case. Though a 4-4 deadlock would be interesting, since there are only 7 justices on the panel deciding Cert Applications. Since the Court declined, we must conclude that there were not 4 judges on the Cert panel in favour. In case you are interested, a good summary of SCOTUS procedure can be found here.

I find your "Apples and Oranges" paragraph irrelevant. It seems to simply avoid the point, that is, that the Big 5 are steadily losing ebook market share.

[pwalker8]

Originally Posted by darryl

I think you are now going to ridiculous extremes to defend your opinion. In particular, I find that your pronouncements on the law are often ill-informed and bizarre, this being no exception.

The Appeal Court decision contained the following under the heading "Standard of Review".



You may also find this excerpt from the Appeal Courts decision interesting.



SCOTUS declined to grant certiorari (ie; to hear the case). As is customary, they did not give reasons. Though you were apparently privy to what took place in chambers, since you equivocally state such reasons. Also, if the judges were, as you say, "in a 4-4 ideological dead lock", cert would have been granted by 4 of your hypothetical pro-Apple justices. It only takes 4 justices to have the Court grant Cert and hear the case. Though a 4-4 deadlock would be interesting, since there are only 7 justices on the panel deciding Cert Applications. Since the Court declined, we must conclude that there were not 4 judges on the Cert panel in favour. In case you are interested, a good summary of SCOTUS procedure can be found here.

I find your "Apples and Oranges" paragraph irrelevant. It seems to simply avoid the point, that is, that the Big 5 are steadily losing ebook market share.

Perhaps if you research the US legal system a bit, you wouldn't find it quite as bizarre. I suspect you never bothered to read the book that I mentioned a month or two ago. If not, you should. You might actually learn something with regards to how the US legal system works and judicial philosophies within it.

Here is an article on what factors the Supreme Court justices look at before deciding to hear a case on not.

http://litigation.findlaw.com/legal-...ar-a-case.html

https://www.economist.com/blogs/econ...st-explains-19

As it mentions, Rule 10 in the Supreme Court official rule book states that a case is rarely heard if the asserted error has to do with factual findings, that is to say that the case was wrongly decided.

There use to be an interesting series of interviews with the various supreme court justices on the US version of audible. One of the interviews was an hour long interview with Scalia with Charlie Rose. In it he talked about his view of the purpose of Supreme Court and what sort of cases they took. There were also some pretty interesting interviews with Justice Thomas as well.

Scalia gave a lot of interviews over the years in part because he apparently felt that the Supreme Court needed to educate the public on the workings of the Supreme Court. Thomas mentioned that in an interview that he did a few weeks ago. People have a lot of misunderstands of how the Supreme Court works.

By the way, you misunderstand the 7 justices in the Cert panel. That's the judges who are in the Cert pool. They use the cert pool as a labor saving device. Alito and Roberts do not participate in the Cert Pool. They have their clerks read the petitions on their own. All 9 judges (8 at that time) actually vote on granting cert.

[pwalker8]

Originally Posted by darryl

...

I find your "Apples and Oranges" paragraph irrelevant. It seems to simply avoid the point, that is, that the Big 5 are steadily losing ebook market share.

I broke this out since this is a very different discussion than the supreme court discussion.

It's not irrelevant in the slightest. The question for the Big 5 is are they losing ebook sales on the books that they publish, i.e. are they selling less books now than they did at a different price point. Of course, an economist would say that the question is are they making less money now than they did at a different price point, since the total sales aren't as important as the total profit.

The market share of big 5 ebooks in the overall ebook universe while an interesting subject isn't really indicative that the Big 5 have a good strategy or bad strategy. You would need to look at it more from a sales per title point of view. Even then, the question of how to compare a title which is for all practical purposes ebook only to a title which is mostly paper sales is a very big question indeed. That's assuming that you actually had access to the real data.

[darryl]

@pwalker. All Justices do vote on Cert. But only 4 are required for it to be granted. And Apple's attorneys, believe it or not, were well aware of Rule 10 and the Cert application was not relying on errors of fact. The case was a quite unremarkable one, did not justify Cert, and did not get Cert. You really do need to face reality and move on.

[barryem]

Originally Posted by Fbone

No, since Amazon just purchased Ring it seems they are going in a different direction.

I could see them buying a transportation company.

Amazon has announced they're starting their own shipping company similar to UPS or Fedex. They're initial plan is just to deliver their own merchandise in areas where the other carriers are overloaded but they don't rule out further expansion.

Barry

[barryem]

Originally Posted by darryl

As to agency pricing? Yes, I do expect it would go, because I would not expect Amazon to try to preserve print book sales at the expense of ebooks, which would almost certainly be far more profitable for it.

I suspect Amazon isn't too unhappy with agency pricing. When they began they were willing to lose money on sales to get a good customer base. At the moment they have a huge customer base.

They did protest and fight back against agency pricing but not for long and my guess is that fight had more to do with appearance than anything real.

Of course I'm only guessing at any of this and I hope I'm wrong. I'd love to see an end to agency pricing. But I don't expect it.

Barry

[darryl]

Originally Posted by barryem

I suspect Amazon isn't too unhappy with agency pricing. When they began they were willing to lose money on sales to get a good customer base. At the moment they have a huge customer base.

They did protest and fight back against agency pricing but not for long and my guess is that fight had more to do with appearance than anything real.

Of course I'm only guessing at any of this and I hope I'm wrong. I'd love to see an end to agency pricing. But I don't expect it.

Barry

You are correct. Amazon is far from unhappy with agency. It is facilitating increases in their share of the ebook market. It is not agency per se that is the problem, and that problem is for consumers who like Big 5 ebooks rather than Amazon. Amazon doesn't care that much type of book you buy as long as you do buy. But the pricing of ebooks by the Big 5 seems to be aimed at optimising print book sales at the expense of just about everyone else, including readers and authors. As I said in a later post it may well be that Amazon will price its new ebooks without any regard to directing customers towards higher priced Windowed print versions. In this case the best indication is probably the pricing of their APub titles. Nothing, of course, is certain.

When you think further about things, it seems that we now have agency or its functional equivalent in self-pub and Indie titles (author or publisher sets price), APub titles (Amazon sets price) and of course tradpub ebooks where the Publisher has an agency agreement and sets the price. In all cases the author or publisher sets the price, not the retailer. The traditional wholesale model seems to exits only for print books. The Big 5 seem to be the main culprits when it comes to pricing ebooks high to favour print book sales and traditional windowing practices.

[darryl]

Originally Posted by pwalker8

I broke this out since this is a very different discussion than the supreme court discussion.

It's not irrelevant in the slightest. The question for the Big 5 is are they losing ebook sales on the books that they publish, i.e. are they selling less books now than they did at a different price point. Of course, an economist would say that the question is are they making less money now than they did at a different price point, since the total sales aren't as important as the total profit.

The market share of big 5 ebooks in the overall ebook universe while an interesting subject isn't really indicative that the Big 5 have a good strategy or bad strategy. You would need to look at it more from a sales per title point of view. Even then, the question of how to compare a title which is for all practical purposes ebook only to a title which is mostly paper sales is a very big question indeed. That's assuming that you actually had access to the real data.

This post does clarify somewhat what you wish to argue. The particular point arose from your statement in an earlier post that:

Once again, value is set by what people will pay. People as a whole seem to place the value based on the work rather than the format of the work. Obvious some do not, but for the most part, the market has spoken. People are willing to pay more or less the same price for an ebook as they pay for the paper book.

Bur when you write "That's assuming that you actually had access to the real data" you imply that there is no access to the real data, which is true. Which makes your definitive statement that the market has spoken puzzling to say the least. Though there is access to data that though not definitive sheds some light on the matter. I responded to you in an earlier post:

As for people's willingness to pay these inflated prices? The fact that sales of Big 5 ebooks are stagnant whilst sales elsewhere continue to grow suggests otherwise. My poll on this site, whilst imperfect, suggests about 30% will either pay the high prices set or buy the paperbook. Of the other 70% an unknown portion would consider buying the book later at a better price if it becomes available. That poll is here

As I said, the Poll was not perfect. But it gives some general idea, and there seems to be nothing similar publicly available.

Unfortunately, the poll on this site appears to be pretty well all that is available. Personally I would have expected far more than 30% to baulk at the high prices. But the real unknown is just how much revenue is lost by the higher prices over a period of time. To what extent are deficiencies in revenue from the initial losses in sales made up by later sales at lower price points? It seems that we do not even have rough poll data on that one. Though an indirect indication is the stagnancy of the Big 5 ebook market whilst the non Big 5 ebook market continues to grow. Why do you think this is? The most likely culprit is the high prices. It is tradpub which is so dependant on blockbusters, and in this new age of publishing such blockbusters may prove to be rare and their effects diminished. Why do you think there has not been a blockbuster for so long? And, of course, there is a very real possibility that future blockbusters will be Indie or Amazon. Wasn't fifty shades originally Indie/Self Published? In the case of Indies there may of course be scope for the Big 5 to acquire print book rights, but other rights are unlikely. Certainly it would be nowhere near as lucrative as some past blockbusters where they held all of the rights.

[pwalker8]

Originally Posted by darryl

@pwalker. All Justices do vote on Cert. But only 4 are required for it to be granted. And Apple's attorneys, believe it or not, were well aware of Rule 10 and the Cert application was not relying on errors of fact. The case was a quite unremarkable one, did not justify Cert, and did not get Cert. You really do need to face reality and move on.

Let's see now, earlier you said that only 7 judges vote on Cert and that the Apple had the chance to appeal on the facts and since the Supreme Court refused to hear the case, that validates her findings, now you admit that neither is true.

As far as the case being unremarkable, I would suggest that perhaps you don't understand the history of US anti-trust and thus don't understand why the case is remarkable. It undercuts a previous Supreme Court ruling (Leegin Creative Leather Prods. V. PSKS, Inc, 2007), which was based on Robert Bork's theory of the purpose of anti-trust. There is quite a bit of disagreement and controversy over per se illegality and the rule of reason. Two of the appellate judges upheld her finding, while the other rather strongly disagreed with it, which tends to argue that it wasn't nearly as straight forward as you declare.

[pwalker8]

Originally Posted by darryl

This post does clarify somewhat what you wish to argue. The particular point arose from your statement in an earlier post that:



Bur when you write "That's assuming that you actually had access to the real data" you imply that there is no access to the real data, which is true. Which makes your definitive statement that the market has spoken puzzling to say the least. Though there is access to data that though not definitive sheds some light on the matter. I responded to you in an earlier post:



Unfortunately, the poll on this site appears to be pretty well all that is available. Personally I would have expected far more than 30% to baulk at the high prices. But the real unknown is just how much revenue is lost by the higher prices over a period of time. To what extent are deficiencies in revenue from the initial losses in sales made up by later sales at lower price points? It seems that we do not even have rough poll data on that one. Though an indirect indication is the stagnancy of the Big 5 ebook market whilst the non Big 5 ebook market continues to grow. Why do you think this is? The most likely culprit is the high prices. It is tradpub which is so dependant on blockbusters, and in this new age of publishing such blockbusters may prove to be rare and their effects diminished. Why do you think there has not been a blockbuster for so long? And, of course, there is a very real possibility that future blockbusters will be Indie or Amazon. Wasn't fifty shades originally Indie/Self Published? In the case of Indies there may of course be scope for the Big 5 to acquire print book rights, but other rights are unlikely. Certainly it would be nowhere near as lucrative as some past blockbusters where they held all of the rights.

I would suggest that the reason that Fifty Shades had such a high percentage of ebook sales has more to do with the nature of the book, i.e. Mommy Porn as it was called.

Once again, we don't have the data, so we have no idea if the Big 5 ebook sales have stagnated or not. If it has, then perhaps the major difference is that since the Big 5 is primarily driven by paper book sales, the number of ebooks they come out with follows fairly closely to the number of paper books they come out with, while on indie side, there is very little limit to the number of new books since there is no limit of the number of authors. It would be more indicative to discuss the number of ebook sales per title by the individual authors and if the numbers are rising or falling based on the price. Once again, data we don't have access to.

I say that the market has spoken because prices have been fairly stable for several years. Unless you think that the Big 5 publishers aren't interested in maximizing their profits, that argues that people are buying Big 5 ebooks at a rate that the Big 5 publishers find acceptable, otherwise, the price would start to drop.

On your last question, why no block buster in recent years, if I could answer that, I would be making millions as a book consultant! The most straight forward answer is that no one has captured lightning in a bottle in recent years. We had a string of Harry Potter(1997 to 2007), Twilight (2005 to 2008) and The Hunger Games (2008 to 2010) as mega block busters and during that time period, several other big sellers (Wheel of Time - 1990 to 2013, A Song of Ice and Fire - 1996 to 2011, Percy Jackson 2005 to 2009, Divergent 2011-2013) and a number of authors who continue to produce books that sell very well. But consider this, during the 1980's and 1990's were there any books that sold remotely close to Harry Potter, Twilight and the Hunger Games? So it's entirely possible that the decade from 2000 to 2010 was an anomaly and we are reverting back to the norm. I think that it's also interesting that period is pretty close to the heyday of the Barnes and Noble. Remember the huge release night parties for Harry Potter at Barnes and Noble?

[darryl]

Originally Posted by pwalker8

Let's see now, earlier you said that only 7 judges vote on Cert and that the Apple had the chance to appeal on the facts and since the Supreme Court refused to hear the case, that validates her findings, now you admit that neither is true.

As far as the case being unremarkable, I would suggest that perhaps you don't understand the history of US anti-trust and thus don't understand why the case is remarkable. It undercuts a previous Supreme Court ruling (Leegin Creative Leather Prods. V. PSKS, Inc, 2007), which was based on Robert Bork's theory of the purpose of anti-trust. There is quite a bit of disagreement and controversy over per se illegality and the rule of reason. Two of the appellate judges upheld her finding, while the other rather strongly disagreed with it, which tends to argue that it wasn't nearly as straight forward as you declare.

This is what I said:

Also, if the judges were, as you say, "in a 4-4 ideological dead lock", cert would have been granted by 4 of your hypothetical pro-Apple justices. It only takes 4 justices to have the Court grant Cert and hear the case. Though a 4-4 deadlock would be interesting, since there are only 7 justices on the panel deciding Cert Applications.

My last sentence was incorrect. I made the mistake of assuming because only 4 justices were required to grant cert and there are 7 justices on the cert panel the requirement was for a majority of the Cert panel. I was mistaken on this, since it seems that to grant cert only 4 votes out of 9 justices are required. My misunderstanding is not material. If there was a 4-4 deadlock as you say Apple would have had its Cert.

Apple did appeal and the findings of fact were reviewed for clear error. Apparently none was found.

That you do not agree with the application of the rule of reason counts for nought. It does not mean the case is remarkable, certainly not in the sense that the Supreme Court should hear it. After all, that Court chose not to grant Cert. A more informed view was expressed by PG of the Passive Voice at the end of this 2017 Passive Voice post headed IBooks Author Conference

From an antitrust legal perspective, the verdict of the trial court was pretty much a foregone conclusion. None of the participants were in the least bit intelligent in their actions.

A lawyer friend of mine used to much prefer minority opinions to majority ones. It made for some interesting discussions but advanced neither his career nor the law.