Apple + Agency Pubs Colluded on Price?

[Ravensknight]

Originally Posted by leebase

T

PLUS -- no one needs to buy a book. This is not milk, bread or gas.

Are you serious!? A human is NOT a sack of chemicals that only needs physical fuel.

A human has a mind to appreciate beauty. A soul that needs to be fed. We shrivel up and die without something that is "pretty as a picture". We become dried up husks without new ideas. Without trees, flowers and clouds, our soul turns inward and we become nothing more than an ant. Without words, interaction and ideas, our minds become ruts filled with a soup of popular culture detritus.

Now I know the above paragraph {could} sound corny, or whatever. But WE ARE NOT JUST BIO-BATTERIES!!!

[gets off soapbox]

[leebase]

There is no way to say there's a hardship because you can't buy the latest thriller at a discount. There are more books to read in the public domain, than anyone could read in a life time. There are more books being offered for free then anyone could read in a lifetime. There are more books being offered for $1 to $3 than anyone could read in a lifetime.

Plus, even having bought an ereader - you STILL can read paper books if the ebook is priced too high.

Vote with your wallet, folks. That's the only way.

Lee

[anamardoll]

@Sao

...except that it's very unlikely that ONLY Amazon would be losing money on eBooks.

Under normal pricing models, businesses "lose money" on sales all the time. Those items that lose money with each sale are called "loss leaders". The usual example is Thanksgiving turkeys -- those suckers don't actually cost $0.10 a pound.

Without agency pricing, Kobo could have coupons that apply to everything. B&N could have sales. Amazon could have "SciFi 99 cents day!" Stores could play around and see what works. With agency pricing... they can't.

Agency Pricing or no, Amazon is going to be just fine. B&N and Kobo need flexibility more than Amazon does -- and they aren't being given that opportunity. If you care about preventing an Amazon monopoly, you should be against agency pricing, imho, because once all the books cost the same, people usually go with the store that has the (perceived) bigger catalog. That would be Amazon at the moment. Kobo coupons could make a difference there, but they can't.

[Suzanna]

I know it sounds like I was defending agency pricing, but I wasn't. I just thought that article was an interesting examination of how it came into place. Many people assume that publishers are being greedy and jacking up the prices of ebooks in order to make more money, but in many cases they're actually making less money. They traded some of their profit for the ability to control prices. I'll admit I am wary of an Amazon-only future, but I do remember that when agency pricing came into effect it negatively impacted some online ebook retailers. Was it Fictionwise that had to close because they could no longer offer coupons? (I didn't use them myself, so my memory is hazy.)

I really am interested in seeing whether this class action lawsuit will get anywhere. Kobo still has coupons, but they can't be applied towards agency books. I know there was a book I wanted to buy recently, but it was $14.99 and I couldn't use a coupon. I understand *why* the price was set that high, but I just can't justify spending that much on one book.

[MzTinaFL]

Instead of lawsuits I suggest the ebook vendors need to use the opportunity to capture more market by offering one-time coupon...perhaps discounting one book a quarter or a small percent for signing an online boycott or something similar. Shoot if I were a ebook vendor, I'd have a facebook page titled "Boycott Ibook!"...just a thought.

[elcreative]

Originally Posted by MzTinaFL

Instead of lawsuits I suggest the ebook vendors need to use the opportunity to capture more market by offering one-time coupon...perhaps discounting one book a quarter or a small percent for signing an online boycott or something similar. Shoot if I were a ebook vendor, I'd have a facebook page titled "Boycott Ibook!"...just a thought.

Yes but under Agency (the major publishers), there are no vendors, they are selling the books for the pubs as agents, at no point do they own anything in the process... and if you're going to try boycotts then surely it should be boycott the Agency group... or are you another Apple hater (the supposedly mythical type not on MR)...

[Andrew H.]

[QUOTE=Sao;1697918]Amazon is hardly the good guy. Before Agency pricing, Amazon was losing money from the sale of each ebook, but they were willing to do so to undercut the competition and drive them out of business.
[quote]
I think it's fair to say that Amazon was the good guy here, at least if you are a consumer. Amazon was not acting altruistically, of course, but their pricing favored the consumer (at the expense of the publisher and retailer).

And - importantly - Amazon was not losing money from the sale of *each* ebook...even Amazon could not sustain that for long. Amazon was losing money from the sale of newly released hardback NY Times bestsellers. Amazon makes most of it's money from non-bestsellers, and these were not sold at a loss. The bestsellers were just a loss leader to get people in the door. So to speak.

In the short term, I can see people saying, "Who cares that Amazon loses money as long as I get to pay less!" The question, however, is what will happen in the future if one company gains the bulk of all ebook sales. Will Amazon be content to keep losing money forever? I doubt that.

People often raise the specter of low prices leading to complete market control, but it never happens in practice. There are too many competitors that would swoop in as soon as you tried to do this...and particularly in the case of books, there is competition from all forms of entertainment, not just from other books. And, essentially, this claim is that we should be happy that new books now cost $15 instead of $10, because if they cost $10, Amazon might gain control of the market...and what? Raise the price to $15?

[carld]

Originally Posted by MzTinaFL

Instead of lawsuits I suggest the ebook vendors need to use the opportunity to capture more market by offering one-time coupon...perhaps discounting one book a quarter or a small percent for signing an online boycott or something similar.

Agency pricing doesn't allow discounts of any kind as far as I know. That's why Fictionwise took such a big hit when this happened.

[DJHARKAVY]

Originally Posted by JSWolf

Is it legal to tell a shop that they cannot discount a product that they sell?

Originally Posted by carld

Agency pricing doesn't allow discounts of any kind as far as I know. That's why Fictionwise took such a big hit when this happened.

And that is my big problem with the Agency pricing.

I can get a hardcover (although I won't these days) for about half the cover price with discounts in various places.

I can't get any discount on the Agency price of the book. Anywhere. And it pretty much killed my favorite ebook source, Fictionwise.

[Elfwreck]

Originally Posted by DJHARKAVY

I can get a hardcover (although I won't these days) for about half the cover price with discounts in various places.

I can get most hardcovers for $.01+shipping, a few months after release. Publishers who want to protect their profits should be taking a hard look at the secondary markets, not ebooks, as competition.

Ebooks *could* be their ticket to competing with that market--$4 for the hardcover, delivered in 3-5 days, vs. $4 for the ebook, delivered now. Instead, they're trying to believe that the customers are choosing between ebook for $14 and new hardcover for $20, or ebook for $8 delivered now or paperback for $8+shipping, delivered in 3-5 days.

[DuskyRose]

Originally Posted by Elfwreck

Publishers who want to protect their profits should be taking a hard look at the secondary markets, not ebooks, as competition.

I agree. Besides flea markets, eBay, used book stores, and thrift stores, there's several on-line book trade sites where you can trade your used books for the cost of media mail or less.

The site I use has over 5 million used books on offer. (Don't know how much of that number are duplicates) but say that since they've been open have helped members trade over 11 million books, over 50,000 mailed in the last seven days, and over 2,000 dropped in the mail today.

Plus, with Wishlists, a lot of people are content to get their books used, for (many times) cheaper than a used book store, and bypass buying anything new and just getting in line for it.

That's a huge number of books being passed around.

In fact, many members won't go to eBooks because they'd have to be the 'first purchase' on the books they want to read, and then can't trade them back out for a new book afterwards. Although many have gotten eReaders just to be able to take advantage of the free eBooks and Kindle trades and never buy books. But I think those numbers are few in compared to the membership as a whole.

I think publishers suffer more impact by the secondary market than the eBook market. It's just that they can't do anything about it, so it's easier to just ignore it and blame something they think they can control.

[stonetools]

As a consumer, I don't like agency pricing, but let's face it- everybody except
Amazon welcomed agency pricing. The publishers, indie bookstores, Google, as well as Apple. Those who claimed that agency pricing somehow disfavored Kobo or the smaller players just don't understand the situation. There is universal consensus in the publishing industry that Amazon was discounting below cost on ebooks in order to gain market share and drive competitors from the ebook market.
I'm sure amazon has it's defenders because, hey, low prices, at least until Amazon drives everyone out, but let's not rewrite history and claim Amazon was baby Jesus innocent here.

[Elfwreck]

Originally Posted by stonetools

As a consumer, I don't like agency pricing, but let's face it- everybody except Amazon welcomed agency pricing.

Several million customers did not "welcome" agency pricing. Fictionwise did not welcome agency pricing.

The publishers, indie bookstores, Google, as well as Apple. Those who claimed that agency pricing somehow disfavored Kobo or the smaller players just don't understand the situation.

Agency pricing has basically destroyed Fictionwise; their entire economic model was based on features that are incompatible with agency pricing. It's damaged several other sites that counted on the ability to offer coupons and promo discounts to compete with larger ebook stores.

There is universal consensus in the publishing industry that Amazon was discounting below cost on ebooks in order to gain market share and drive competitors from the ebook market.

Amazon was indeed running popular books at a loss in order to drive sales in other areas, and Amazon had enough diversity of content to do that. Agreeing that this was at least somewhat problematic, however, doesn't mean one needs to hail agency pricing as a good solution.

And whether or not agency pricing is "evil," the way it was established may well be an anti-trust violation; businesses aren't allowed to coordinate with each other to keep prices above a certain level so they'll all get profits they're happy with. And several publishers did say the problem with Amazon's sales wasn't that they weren't making money--it was that the general public was getting used to the idea of $10 books, and they didn't want to allow that.

[bgalbrecht]

Originally Posted by Elfwreck

I can get most hardcovers for $.01+shipping, a few months after release. Publishers who want to protect their profits should be taking a hard look at the secondary markets, not ebooks, as competition.

Ebooks *could* be their ticket to competing with that market--$4 for the hardcover, delivered in 3-5 days, vs. $4 for the ebook, delivered now. Instead, they're trying to believe that the customers are choosing between ebook for $14 and new hardcover for $20, or ebook for $8 delivered now or paperback for $8+shipping, delivered in 3-5 days.

My point all along has been that the book industry has 4 price points, hardcover, trade paperback, mass market paperback, and used (approximately half MMPB price), and book buyers tend to choose their price based on how long they're willing to wait to buy it. The publishers want to ignore the used price point. I suspect that it's because they're convinced that if they sell ebooks that are now out of print in paper at used book prices, it will cannibalize the new book sales.

Even more outrageous are all of the "contemporary classics", which have been in print in one form or another since they were first published sometime within the last 50 years, which get a trade paperback price for the ebook edition. I think most of these books would end up recovering the cost of creating ebook editions faster if they priced them to be between used and MMPB. I know the high prices stops me from replacing my paper copies with ebooks.

[stonetools]

Several million customers did not "welcome" agency pricing. Fictionwise did not welcome agency pricing.

Fictionwise is owned by Barnes & Noble-a supporter of agency pricing. As for consumers, well, of course, they like low prices in the short term! I was talking about publishers and booksellers, as you well know.

Agency pricing has basically destroyed Fictionwise; their entire economic model was based on features that are incompatible with agency pricing. It's damaged several other sites that counted on the ability to offer coupons and promo discounts to compete with larger ebook stores.

Yet Fictionwise still exists. Now you are right, they can't gain market share by offering discounts as much as they used to. But companies exist not merely to gain market share; rather they exist to make PROFIT.Now I don't know what Fictionwise's long term prospects are now: I do know that they would have been unlikely to survive a price war with Amazon, which would have eaten the big fish first, then the little fish.
Anyway, I know there is no way to convince ebook consumers who are focused on low prices that agency pricing could possibly be good, so I'm not going to try.
In any case, this is moot. The lawsuit will most likely fail, because there is simply no EVIDENCE that Apple and the Big Six publishers colluded to fix prices: innuendo and conspiracy theories aren't evidence. Now something may turn up in the discovery process as the lawsuit goes forward, but if nothing does, then the case will be dismissed. That's the likely result, by at least 4 to 1.
Now this doesn't mean that I am happy with publisher pricing: they definitely need to be more flexible on their pricing. But in the long term, we are better off with lots of players with the ability to set pricing, rather than one BIG player, who can lower prices short term, then jack them up long term.