2 of 3 Judges appear to favor Apple in ebook appeal

[Fbone]

A few "facts" seem inconsistent or maybe I just don't understand:

This "90%" Amazon market share figure thrown about is one. What share did B&N and Sony have? This would make the sales at the many other retailers negligible. Were they profitable? Mr Coker says Smashwords achieved profitability in 2010 after Agency. The others we don't know.

BoB and Diesel both claim that it took over a year (up to 18 months) to re-establish contracts with the Big 5. And there may have been one or two publishers that never returned. What was the holdup? More facts are needed. Amazon, B&N, Sony, Borders, Apple had contracts on day one. Why didn't BoB, Diesel and others at least use a distributor like Overdrive who supplied ebooks to several retailers including Borders? If you know a few months ahead of time that most of your product is disappearing, you better have a contingency plan after pulling 80 hour weeks trying to make deals.

I believe these other stores wouldn't have been able to handle the increased competition of Apple, Google and Kobo who all started in 2010 even without Agency. Frankly, they didn't have significant market share to begin with.
I also believe the newly released $139 Kindle Keyboard, Amazon Publishing and KDP Select also were factors in these other retailer's declines starting in 2010.

[JSWolf]

pwalker8, in the case of Fictionwise, please tell us how they were able to keep the business model they had before agency after agency struck?

[murg]

Originally Posted by pwalker8

Therefore Apple could not have put them out of business. Companies that buy competitors don't normally keep them in business for long.

Amazon does.

So, based on your example, let see: B&N buys fictionwise and 'plans' to close it down soon. Yet takes years to do so. And B&N is not doing very well.

Amazon buys Book Depository (and a bunch of other competitors). Keeps them running for years (in fact, has no plans to shut them down). And Amazon is doing very well.

Maybe the strategy of buying competitors to shut them down isn't a very good strategy.

[JSWolf]

I don't think B&N would have closed Fictionwise if Fictionwise was profitable. Fictionwise was profitable before agency. Agency caused Fictionwise to close because Fictionwise was unable to keep their business model.

[murg]

Originally Posted by pwalker8

Apple's market share has been estimated at from 10% to 20% making them either the 3rd ranked ebook store or 2nd ranked, behind Amazon (60%) and B&N (25%). It's a pretty far stretch to claim that the 3rd ranked store drove all these stores out of business when they were not the ones who were selling ebooks at below cost.

Apple illegally colluded with the publishers to remove the price advantage that their larger competitors were using to hurt Apple (mainly because Apple believes in charging as much as possible).

So, yes, the 3rd ranked store drove many of the smaller stores out of business when they removed their price advantage. However, as most strategies to hurt Amazon work out, this plan only made Amazon stronger.

And I find it interesting that you list the stores larger than Apple as the examples, then talk about Apple not being able to force smaller stores out of business.

Originally Posted by pwalker8

Yes, I know that several of those companies are suing Apple, but that is more along the lines of "You have money, we want money, you pay us money to go away" lawsuits than any proof of cause/effect.

They are suing Apple because Apple was illegally colluding with the publishers, and forced these companies out of business. When that happens, the companies who were illegally harmed tend to take umbrage at the situation, and the proper way to address the situation in modern society is to use the courts for compensation.

[pwalker8]

Boy, some of you really, really need to go back and refresh your narratives to match the facts on the ground.

1) The publishers were the ones who wanted Agency pricing, not Apple. Apple originally suggested a tiered pricing structure.

2) At the time of the negotiations, the Apple iBook store did not exists. Thus, there was no "price advantage that their larger competitors were using to hurt Apple" because Apple wasn't even in that line of business yet.

3) Once Apple entered the market, Amazon went from 90 % of the market, to 60 % of the market.

I'm waiting for some of you to start talking about Apple's Black Helicopters. Geeze.

[pwalker8]

Originally Posted by murg

Amazon does.

So, based on your example, let see: B&N buys fictionwise and 'plans' to close it down soon. Yet takes years to do so. And B&N is not doing very well.

Amazon buys Book Depository (and a bunch of other competitors). Keeps them running for years (in fact, has no plans to shut them down). And Amazon is doing very well.

Maybe the strategy of buying competitors to shut them down isn't a very good strategy.

Or maybe being a small fish in a bigger pond just isn't very profitable.

[pwalker8]

Originally Posted by Fbone

A few "facts" seem inconsistent or maybe I just don't understand:

This "90%" Amazon market share figure thrown about is one. What share did B&N and Sony have? This would make the sales at the many other retailers negligible. Were they profitable? Mr Coker says Smashwords achieved profitability in 2010 after Agency. The others we don't know.

BoB and Diesel both claim that it took over a year (up to 18 months) to re-establish contracts with the Big 5. And there may have been one or two publishers that never returned. What was the holdup? More facts are needed. Amazon, B&N, Sony, Borders, Apple had contracts on day one. Why didn't BoB, Diesel and others at least use a distributor like Overdrive who supplied ebooks to several retailers including Borders? If you know a few months ahead of time that most of your product is disappearing, you better have a contingency plan after pulling 80 hour weeks trying to make deals.

I believe these other stores wouldn't have been able to handle the increased competition of Apple, Google and Kobo who all started in 2010 even without Agency. Frankly, they didn't have significant market share to begin with.
I also believe the newly released $139 Kindle Keyboard, Amazon Publishing and KDP Select also were factors in these other retailer's declines starting in 2010.

Another possibility is that the rise of the tablets and ebook apps gave an advantage to ebook stores that had associated apps and methods for easily downloading books into those apps.

In economics, this cycle is called creative destruction. As the market changes, some companies prosper and other companies fall to the way side. The same thing happened to the mall based bookstores when the mega bookstores such as Barnes and Noble took hold. Then when Amazon got going, it was the mega bookstores turn to suffer. In the phone market, Blackberry and Nokia once reigned supreme. But neither could ride the smart phone wave.

[murg]

Originally Posted by pwalker8

Boy, some of you really, really need to go back and refresh your narratives to match the facts on the ground.

1) The publishers were the ones who wanted Agency pricing, not Apple. Apple originally suggested a tiered pricing structure.

And then Apple and the publishers quickly agreed to Agency.

Originally Posted by pwalker8

2) At the time of the negotiations, the Apple iBook store did not exists. Thus, there was no "price advantage that their larger competitors were using to hurt Apple" because Apple wasn't even in that line of business yet.

Apple's illegal price-fixing was necessary for them to consider starting the iBook store. The fact that it didn't exist yet is even more of an indictment of Apple's behaviour.

Originally Posted by pwalker8

3) Once Apple entered the market, Amazon went from 90 % of the market, to 60 % of the market.

This is when Amazon's ability to compete on price was illegally constrained by Apple. Yet again, this is an indictment of Apple's behaviour.

Originally Posted by pwalker8

I'm waiting for some of you to start talking about Apple's Black Helicopters. Geeze.

Apple would have White Helicopters...

[JSWolf]

Originally Posted by murg

Apple would have White Helicopters...

Apple had black ninjas.

[shalym]

Originally Posted by JSWolf

Apple had black ninjas.

...in turtlenecks.

[pwalker8]

Originally Posted by murg

And then Apple and the publishers quickly agreed to Agency.



Apple's illegal price-fixing was necessary for them to consider starting the iBook store. The fact that it didn't exist yet is even more of an indictment of Apple's behaviour.



This is when Amazon's ability to compete on price was illegally constrained by Apple. Yet again, this is an indictment of Apple's behaviour.



Apple would have White Helicopters...

Once again, the agency model is quite legal and is not pricing fixing. Neither the publishers nor Apple were ever changed with price fixing. The publishers were charged with per se anti-trust violations for agreeing among themselves to insist on the agency model and settled before trial. Apple was charged with per se anti-trust violations for negotiating contracts with the big five publishers. Price fixing involves, well you know, fixing prices. If you are going to engage in conspiracy theories, at least get the nomenclature right.

[Shades]

Originally Posted by pwalker8

Once again, the agency model is quite legal and is not pricing fixing. Neither the publishers nor Apple were ever changed with price fixing. The publishers were charged with per se anti-trust violations for agreeing among themselves to insist on the agency model and settled before trial. Apple was charged with per se anti-trust violations for negotiating contracts with the big five publishers. Price fixing involves, well you know, fixing prices. If you are going to engage in conspiracy theories, at least get the nomenclature right.

Isn't it price fixing when a retailer can't lower the price of an item because the supplier is telling them they can't or else?

And collusion between parties to set prices for items...

This whole case just reeks of antitrust violations any way you try to split it.

[eschwartz]

Originally Posted by pwalker8

Or maybe being a small fish in a bigger pond just isn't very profitable.

Those small fish were profitable in a big pond right up until Agency.

[eschwartz]

Originally Posted by pwalker8

Once again, the agency model is quite legal and is not pricing fixing. Neither the publishers nor Apple were ever changed with price fixing. The publishers were charged with per se anti-trust violations for agreeing among themselves to insist on the agency model and settled before trial. Apple was charged with per se anti-trust violations for negotiating contracts with the big five publishers. Price fixing involves, well you know, fixing prices. If you are going to engage in conspiracy theories, at least get the nomenclature right.

If you are going to engage in fanboi debate, at least get your listening skills right -- oh wait, that's the whole point.

In any event, it may have eluded your notice, but you are the only person who says things, and keeps saying them, about Agency and price-fixing being syonymous.

Why yes, they did fix prices. Yes, they forced the agency model. No, those aren't the same thing, and no, we don't think they are anyway -- no matter how much you accuse us of it.

You do the same thing every time you get backed into a hole.