Stars fall in Amazon protest about ebook prices

[Kali Yuga]

Originally Posted by Worldwalker

In short, retailers can't be retailers.

I wouldn't go that far. But yes, they do get treated as agents of the publisher, hence the name.

Originally Posted by Worldwalker

That's not true, and you've been here long enough to know it's not true. That's not true of what people want, and it's not true of what people do. Trying to pretend otherwise is disingenuous at best.

Actually, my opinions of "what people want" have been partially shaped by MR poster reactions.

I firmly believe most people have emotional reactions to the price, and work backwards from there.

Originally Posted by Worldwalker

Readers want the free market to control book pricing.

No, they want cheap books. Heck, I want cheap books. I just recognize that is not how things work.

Originally Posted by Worldwalker

I'm afraid I'm too much of a capitalist to think that centralized, single-point control of the book market is a good thing.

OK, so Apple setting the $1-per-song price point was a terrible thing? Or Amazon demanding $10 per ebook is also bad? Got it.

And let's be real here. The price for many ebooks was over $10, if you bought it from Sony or B&N. Amazon basically subsidized ebook purchases in order to dominate the market and *cough* centrally set prices for their customers once they had a lock.

Originally Posted by Worldwalker

Like some people are "differently abled" because they can't walk?

No.

Paper is restricted in ways that digital is not, and vice versa. We are simply all very comfortable with paper's restrictions -- to the point where we accept it as a physical given and don't even think about it.

Originally Posted by Worldwalker

You're forgetting one other critical thing that sets that price: what the buyer is willing to pay.

Not at all. I've been talking about demand and tiered pricing quite a bit. Feel free to re-read my posts at your leisure.

Originally Posted by Worldwalker

Except that the publisher isn't making $10 from the $25 hardcover....

Allow me to clarify.

A publisher most likely receives $10 in revenues for a $25 hardcover, and $3 in revenues from a $10 ebook.

In order to generate identical revenues, in that circumstance they need to sell 3.3 times as many copies.

The "paper" costs for the publisher are only around 15% of the book's cost. So to make the same profits, they need to sell 2.85 times more books.

It takes more than just a low price to double or triple your sales -- all of your sales, by the way. You also need to market aggressively, which in turn (surprise!) negatively impacts your margins. There are no free lunches.

I.e. that brief blip did not discuss costs at all -- most of which stay the same: advance, royalty rate, editing costs, marketing, PR, overhead, taxes, and so forth.

Originally Posted by Worldwalker

....For MR members, we buy books at the expense of other books (if I buy Book A, I won't have that time to read Book B). Our book purchase are constrained by our available time. For average people, their book purchases are constrained by their available budget -- if a book is cheaper than the alternatives, they're more likely to buy the book.

Yeah, I dunno.

You may be right that for the big book buyers, it's a zero-sum game. However, I don't believe Joe Target is dealing with low budgets, they're just not interested in books -- regardless of pricing.

Plus, if the only way to get Joe Target to buy dozens of books is to slash margins to the bone, why bother?

Sorry to remind you that this is a business, and it's driven by margins. Publishing is not charity work.

Originally Posted by Worldwalker

Cut your $25 book to $10, and you may very well sell 2.5x as many of them.

Perhaps. But what are you basing this on? Market research, perhaps? Analysis of sales?

If you re-read my posts, I have not excluded the possibility that you could have a big jump in sales to match revenues/profits. My point is that as ordinary consumers, few people realize exactly how many more books need to be sold to make up for the lost revenues.

Originally Posted by Worldwalker

So do mass market paperbacks cheapen the value of books?

Pretty much

Originally Posted by Worldwalker

If so, why do publishers print so many of them? Why do so many books appear only as MM paperbacks?

• To capture more revenue, after the initial high demand has dropped.
• Not all books are (or need to be) high-value.

Originally Posted by Worldwalker

I remember the old Gramercy Park Clothes commercials. Particularly, I remember "We'd rather sell a million suits at a buck profit than one suit at a million profit." As I understand it, they were quite successful.

Oh? I've never heard of them, and they may not be in business any more. Meanwhile, Macy's charges full price most of the time and is still around. Go figure.

Some publishers do just fine with a low-margin, low-cost model -- e.g. genre publishers like Harlequin do very well. And if that's how they run their business, I have no problems with that. Big publishers even occasionally have smaller imprints that do the same thing.

However, not all books are generic genre works that can be cranked out like sausage, albeit by enthusiastic authors for an enthusiastic audience.

[Worldwalker]

Originally Posted by Kali Yuga

Ahh, so much to respond to...

And so little that you responded to as a consumer ... so much you responded to as a shill.

Yes, I agreed with your assertion that retailers can't discount, and can't use pricing as an advantage. However, the publishers can and do discount.

And?

In a free market, any seller in that market can set their price at whatever they feel like. If Fred's Bookstore feels like giving me a free mystery with every SF purchase this week, it can do it; if it goes bust in the process, well, that's Fred's problem. Pbooks work that way. Ebooks used to work that way. One group of publishers decided to wrest control of publishing from market forces. Market forces, it appears, are wresting back.

Like I said, they do not want to pay hardcover prices. However, they still want to pay a low price for a high-demand good. And it's pretty clear they no longer want to wait to pay a lower price.

*sigh* I'm used to arguing with my fellow capitalists, so this isn't easy, but I'll try: Buyers don't want to pay hardcover prices for ebooks, just like they don't want to pay hardcover prices for mass market paperbacks. The price used to be set by the market. It is now set by the cabal. The buyers, being the "demand" side of the whole "supply and demand" thing, don't like the prices. That's what they're supposed to do: Decide if they like a price or not, rather than just docilely hand over their money as they would in a socialist economy.

Then you can wait 6 months until the price drops.

It's not that simple. It's not close to that simple. In a year or more (not six months), when the MM paperback comes out, the price of the ebook is still frequently more than the price of the paperback. Pay more, get less.

There is absolutely nothing immoral about charging more when demand is high, especially for a non-essential good.

And absolutely noting immoral about saying you don't like that price, and acting accordingly. You're arguing as if only the publishers have rights here -- as if the booksellers have no rights and the buyers have no rights. That's why I'm calling you a publisher's shill, by the way: an honest person would acknowledge that the publishers, the booksellers, and the buyers (which would be us) all have their own sets of rights, which in this case the publishers have attempted to extinguish. You're only admitting to rights for one of those parties; your attitude is "only publishers have rights; booksellers and customers can take it or leave it." Hence my opinion that whether or not you admit to working for a publisher, you're taking strictly their side for your own purposes.

I'm not saying you have to like it, but the reality is that "I want this book the instant it comes out at $10 instead of $15!" basically has zero moral force.

This is (or used to be) a free market. Capitalism, don't'cha know. Moral force has nothing to do with it. Money has everything to do with it. And publishers are not the only ones with money.

A paper book has, as a part of its physical characteristics, a set of built-in restrictions.

Okay, let's compare restrictions, specifically those of the cabal:

E.g. you can't duplicate it an unlimited number of times for personal use....

You can't duplicate an ebook an unlimited number of times for personal use, either. If I buy an ebook for my Sony 505, and get a Kindle tomorrow, I have to buy the book again.

[quote]... you can't sell your copy and simultaneously keep it for yourself,...[quote]
Compared to a cabal ebook, where you can't sell your copy AT ALL? You consider this an improvement?

Pbook: You can sell your copy to the used bookstore.
Ebook: You can't sell your copy to the used bookstore.
Kali: Ebooks are better because of this.
Worldwalker: HUH????????

...and so forth.

You seem to have run out of advantages. "And so forth" doesn't go very far, does it? One of your "advantages" would require illegal actions (breaking DRM so that you could read the book on a different reader) and the other "advantage" is a huge disadvantage of ebooks and you're hoping we're stupid enough to take you're word that they're somehow advantages? We might be dumb here, but we're not that dumb.

[quote]Paper winds up like a "built-in DRM" that restricts your actions -- it's just a different set of restrictions..

And I can't walk for every long (frankly, after that hospital visit, I'm grateful to be able to walk at all). So my mobility is "different" from people who can, eh? There are people who would trade their ability to hike the Appalachian Trail for my ability to walk into a bookstore because it's not "better", just "different"?

Ebooks do have some advantages -- some that you quite noticeably missed, which is another reason I suspect you're shilling for a publisher: they're the same ones the publishers don't understand. The big one is portability: I have 2500 ebooks on my Sony 505 (and no, I don't reboot it much; startup is slow). Even with the fancy cover, I can put 2500 books in the space that one trade paperback occupies. That's a big advantage. There's the whole adjustable font size thing; that saved my sanity in aforementioned hospital visit. There's the accessibility of out-of-print ebooks -- I collect old boys' books, like the original Tom Swift series, and with many of them available as ebooks, I can read them before I physically acquire them, and often after I acquire them, since the physical books are often in poor shape; they were never meant to last a hundred years, and few do it well. I can read Project Gutenberg in bed. Those are the reasons I paid retail for my Sony 505, and I would do it again in a split second. Notice how none of those have anything to do with your purported "advantages".

Now, what are the advantages and disadvantages of me buying a pbook or an ebook from the cabal?

Ebook Plus:

It's more portable than its physical version.
I can buy it instantly (effectively) via download.

Ebook minus:

I can't read it on every device I own today.
I can't read it on any device I buy in the future.
I can't resell it.
I can't lend it.
I can't give it away.
I have to pay more money for it.
The publisher, not the retailer, sets that price.

Pbook plus:

I can read it anywhere.
I can read it forever, or at least until it falls apart (rarely happens).
I can sell it to a used bookstore.
I can lend it to my mother-in-law.
I can give it to the charity sale.
I can buy it cheap, or with coupons, remaindered, or used.
I can buy it cheap.
The retailer (adn therefore the free market) sets the price.

Pbook minus:

It's less portable than the ebook version.
I have to wait 48 hours to read it unless I want to go to a bookstore.

You were talking about illegal but moral things to do with ebooks, such as DRM removal. I wouldn't suggest that you open that particular can of worms. If you do, people will point out that pbooks can be (and are) scanned by their buyers, and thereby removing all the "restrictions" you claimed were specific to pbooks.

In addition, the idea that "ebooks have a lower value" willfully ignores the fact that ebooks give you other cost-saving or added-value aspects. Yes, you lose X Y and Z, but you gain A B and C.

See above.

And once again, we're talking about the free market here. We're talking about whether the market should set prices, or a cabal of oligarchs should set prices. I'm enough of a capitalist to go for #1.

Ebooks give me added value over hardcovers, just like mass-market paperbacks give me added value over hardcovers. I've been known to sell hardcovers in order to buy MM paperbacks because of the limitations of my shelf stability and overall cubic footage. So should mass-market paperbacks sell for more than hardcovers because they're more portable? If they were invented today, in this day of cabal control of pricing, they probably would. But since they came out when market forces determined the price, they retail for a fraction of the HC price, and are often discounted (directly or via coupon) far below that.

I.e. if you're going to demand that ebooks cost less, you ought to figure in the "zero cost for delivery" to your calculations. (And yes, believe it or not, shipping and handling are usually very profitable for retailers.)

What world are you living on? I'm seriously staring at the screen in bewilderment right now.

I've been a retailer. Shipping can eat their lunches. Out of, say, the $6.99 for a paperback, you have to pay the wholesale price, a share of the cost of your retail store, a share of the cost of your staff, a share of your advertising, and what it cost to send that thing to you -- that is, shipping and handling. Do you seriously think that Border's gets to keep $6.99 for every paperback book they sell? If they're lucky (based on other industries, as I haven't been a retailer of books), they get to keep $.50 of the price of that book. And I seriously doubt that they do that well. Brick-and-mortar retailers run on very small profit margins. Shipping is an expense.

And don't forget, to the publisher asking $15 for a new ebook, when the cover price on the hardcover is $25, is a huge price cut. When you buy the hardcover at a steep discount, the retailer is subsidizing your purchase.

Not as big as you think, because with books they know will be heavily discounted (new Harry Potter releases, for instance) the retailers negotiate a whopping discount from the rest of the supply chain -- in the case of the big bookstores, directly from the publisher.

But the point is, however, that even if the retailers were paying full price for those pbooks, they can chose to discount those books. They can look at their numbers and say "well, if we sell Book A as a loss leader, then people who buy it will buy Book B and Book C too, and we make a profit." With the cabal pricing, that decision is taken out of the hands of the retailers. The market isn't setting the prices; the cabal is. I don't like oligarchy.

If you believe all brand-new ebooks should only ever cost $5, perhaps you are not a customer worth having.

So my money is not worth spending?

That's exactly how the cabal thinks. They'd rather sell one suit at a million profit than a million suits at a buck profit. They're not selling very many suits, though.

Free books are done as a promo, and Baen probably believes (with good reason) that it's cheaper than spending ad dollars.

Actually, they run ads, too. They don't hide their new books under a barrel.

Many of their books are in series, so give away one free, and if the customer likes it they may buy 3+ other books.

Which they sell for no more than $6, and often less if they're older or bundled, unlike the cabal and their "readers have to be trained to expect to pay $15 for an ebook." Yes, they said that.

They largely cut out the middle-man, which most publishers can't do.

They sell through Webscriptions, which isn't exactly them. I'm a little unclear on how the pricing breaks down, but there's at least something of a middleman, at least someone else besides the publisher directly dipping a finger in the pie. Any publisher who wants to can do exactly the same thing. Or they can set up their own sales website ... in fact, quite a few do.

I assume they pay authors lower royalties per copy (lower cover price = lower royalties).

You assume.

I assume they pay authors much smaller advances.

You assume.

Some of the top names in science fiction choose to sell their books to Baen instead of the cabal publishers. Why is that, I wonder? Genre authors are a notoriously money-minded bunch. I think it comes from not knowing where next weeks' groceries are coming from if you don't sell books. So why do they choose to take their books to Baen (which is not an easy market by a long shot; quite the opposite) instead of elsewhere? Without asking them individually, I'd have to go with the obvious answer: because they make more money there. It's definite that Baen has gone from a small specialty hose to a major SF publisher in the time they've been giving away ebooks. Maybe that was just coincidence -- they do have some of the best authors in the field, after all -- or ... maybe not.

[quote]By the way, numerous other publishers also issue ebooks for free as promos, check out Amazon's "Top 100 Free" -- http://www.amazon.com/gp/bestsellers/digital-text
Baen doesn't just temporarily issue books for free; they put them up free essentially forever. And don't forget the CDs, which they encourage people to duplicate and pass around to their friends, and online -- they want people reading those books.

Looking at the first page (20) of Amazon's "free" books, what do I find ...

8 of them are public domain.
1 of them is dubiously copyrightable (a phrasebook).
1 is fungible (a Sudoku puzzle book).
2 are public domain games (seriously, Minesweeper?).

Out of the remaining 8, two (that I know of without checking) are the first books in series, and at least several appear to be indie books.

That's not going to impress me very much. So Amazon "gives away" DRM-locked versions of free books? And this is a Good Thing in your world?

I'm actually on the fence about agency pricing.

Like hades you are. You're defending it up, down, and sideways, even if you have to make up "reasons" to defend it.

However, the reality is that the ONLY reason, IMO, that anyone objects to it is because some people are insanely sensitive to certain forms of pricing.

In your opinion.

Speaking as a capitalist, I can safely say that it's not MY opinion. And while we do have a few socialists here (most notably one guy with a very high opinion of himself down in the intro forum) most of us are, in fact, capitalists, and we don't like oligarchies. Especially really, really blatant ones, like the cabal.

If agency pricing resulted in a flat $10-per-title price, and retailer pricing resulted in $15 for a new ebook, I wonder how these conversations would go. Hmmm....

So people would prefer socialism if it was cheaper?

But in general I support the ability of a company to survive and actually turn a reasonable profit.

So they should be immunized from market forces? In order to "survive" they need to not be subjected to the same supply and demand that other businesses face? That's an ... interesting ... way of looking at things.

What other businesses would you say need that kind of protection in order to "survive and actually turn a reasonable profit"? How long should that protection last? Forever? When did you last buy a buggy whip?

I also recognize that book publishers are saints compared to the music and movie industries, which are notorious for abusing their financial obligations to many artists. As such I do not resent book publishers (of ANY size) for having the "temerity" to try and run a business.

Nor do I. Nor do any of us. Once again, you're putting words in our mouths, and presenting your highly-biased point of view as a given. Once again, you're setting up a straw man you can easily kick over.

Book publishers are not saints. They're businesses. In this case, they're businesses who have found a way to enforce the will of a cabal over the forces of the free market. The free market is fighting back. That's what you, it appears, can't handle.

[JSWolf]

Originally Posted by JSWolf
It's not a matter of hacking and slashing. I get email from Borders that gives me 25-40% off. I cannot apply this to eBooks. Why? Because the Agency 5 say I cannot.

Yes, I agreed with your assertion that retailers can't discount, and can't use pricing as an advantage. However, the publishers can and do discount.

No, they don't. We have not had any sales nor temporary price reductions on eBooks from the Agency 5. They set the price and that's what we have to pay. They don't need nor want to give discounts. It's part of their contract.

Originally Posted by JSWolf
No, This is way wrong. A lot of people who read eBooks are doing so because they don't buy hardcovers....

One of the reasons a lot of people got into buying eBooks was because of the lower cost for the eBook then the pBook. Also, a lot of eBook readers do not purchase hardcovers to any great degree. Sure, we can wait until the paperback comes out to buy the eBook at a reasonable price. But, the issue is the eBook price doesn't always lower in a timely manor or at all.

http://www.amazon.com/Naamahs-Kiss-e...tag=inkmesh-20

Take a look at that link. Naamah's Kiss as an eBook is $12.99 and the paperback is $7.99 (without any discounts). So how is waiting helping? This is an example of how the Agency 5 has lied to us. They did not lower the price to match the paperback price.

Originally Posted by JSWolf
I was OK paying $9.99 for an eBook that was out in hardcover that I wanted there and then. I am not OK paying $12.99-$19.99 for an eBook.

In the example above, the price did not drop when it should have. In fact, it's been wrong for a good while now. If we have proof of eBook prices dropping when the paperback is released, maybe. But we don't have proof. Please, show me some eBooks from the Agency 5 where the price has dropped upon paperback release.

Originally Posted by JSWolf
But with an eBook, you are not allowed (supposedly) to remove the DRM....

If we go with DRM, then the eBook has even more restrictions then the pBook. Amazon used to sell eBooks in PDF, LIT, Mobi, eReader. The standard for back then. Now when Amazon stopped, people who needed to update the DRM on eBooks were unable to do so. So, what they ended up with was an eBook they were no longer able to access. When paperback digital went out of business, people were unable to modify the PID(s) in their Mobi eBooks so if they changed computers, the eBooks were useless on the new computer. DRM will someday bite your ass and it will hurt. It's not even a matter of format shifting. It's a matter of just wanting to read it. A pBook will never be locked tight so it's unreadable.

With DRM on an eBook, I cannot sell it as it's not usable by someone else. With a pBook, when I can done reading it and know I won't ever reread it and don't want it taking shelf space, I can sell it to make back some of the money I spent on it. an eBook I cannot sell. I cannot give it away. I'm not supposed to allow anyone else to even read it. I'm expected to buy multiple copies if my wife wants to read it. So when they price eBooks at the cost of hardcover books and give me less rights with it, that's wrong. It's also immoral.

Originally Posted by JSWolf
But the $3 profit they would be making from the eBook priced at $10 is $3 more then they would be making when the eBook is priced at $12.99-$19.99 and I'm not buying it.

I'm of the mind that an eBook priced at $9.99 is fair when the hardcover is the only version. When a paperback copy comes out (no matter the format), I feel then that eBook should then be lowered in price with the ability for retailer to offer discounts/sales. So if I get a coupon code from Kobo for say 20%, I can use it on all eBooks and not just the ones the Agency 5 do not have locked up good and tight. Once a book has made back all the initial costs, the pBook will have higher costs associated with it because of the physical form. The eBook will have much lower costs associated with it. A price of $12.99 on an eBook is a price point where a lot of people will have to stop and think about buying it if they even do. A reasonable price point of say $6 may be an impulse purchase for a lot of people. So, do you think it's better to have a sale of an eBook at $6 or no sale at $12.99?

Originally Posted by JSWolf
Look at BAEN. They sell eBooks reasonably and give away a lot for free and yet they MAKE A PROFIT WITH EBOOKS. How is that done?

Baen gets advertising from the customer base because they treat the customer with respect and fairness. So the customer tells others about the eBooks and then others go have a look and so on.

As for series, this is one place the mainstream publisher fall flat on their face. A lot of series are incomplete in eBook. That make it not worth it to by any of the books in an incomplete series. Also, we get eBooks that are in different formats. As in #1 & #2 are not available in ePub but #3-#5 are. Or maybe the series is missing #1 & #2 and the rest are available. Or the newest book is an eBook but the publisher is unwilling to go back and release the rest of the series in eBook.

Originally Posted by JSWolf
Give your answers, it looks like you work for the Agency 5 and agree with their tactics.

I too support the ability of the publishers to make a profit. But to make a profit, they have to sell product. And to sell a product, they have to have it priced reasonable. Charging as much or more for an eBook as a pBook is unreasonable. Before the Agency 5 took over, sales of eBooks was on the rise. Its not good business to take a product that sells and raise the prices. It is bad business when you have something that works and you rise the prices so it no longer works.

If your example was to come to be, it would still be a bad idea. The Agency 5 are trying to cheat and steal from the customer. An example is the Star Trek SCE/CoE series. This is a series of short stories. Now would you pay $5.99 for a short story? That's what they are priced at now that The Agency 5 exist.

The Agency 5 had a model that worked. It needed some work for sure. It wasn't perfect. Yes it could have been improved. But overall it wasn't fully unreasonable. Now they've gone and scrapped what could have been fixed and put in place something that's broken with the only way to fix it is to scrap it and start over.

We are not stupid. Don't treat us that way.

[brecklundin]

Originally Posted by JSWolf

I'm of the mind that an eBook priced at $9.99 is fair when the hardcover is the only version. When a paperback copy comes out (no matter the format), I feel then that eBook should then be lowered in price with the ability for retailer to offer discounts/sales. So if I get a coupon code from Kobo for say 20%, I can use it on all eBooks and not just the ones the Agency 5 do not have locked up good and tight. Once a book has made back all the initial costs, the pBook will have higher costs associated with it because of the physical form. The eBook will have much lower costs associated with it. A price of $12.99 on an eBook is a price point where a lot of people will have to stop and think about buying it if they even do. A reasonable price point of say $6 may be an impulse purchase for a lot of people. So, do you think it's better to have a sale of an eBook at $6 or no sale at $12.99?

That was what it appeared the rhetoric from the Fab-5+1 tried to imply in their public statements without actually committing to it in practice. We even had threads discussing it here for a few weeks following the change. Unfortunately in practice it has not happened and shows no sign of ever happening.

What is worse is the Fab-5 alone really have no retail experience or support infrastructure that I can discern. They simply seem to fail to understand the whole relationship between the increase in profits if your customers feel they are getting fair value for their money and are treated as more than a cash-machine.

[brecklundin]

Originally Posted by LakeLoon

Since the term "price-fixing" is being thrown around, we should be careful about how we're using it. The "Agency 5" agreements may indeed restrain a certain amount of competition, but not in a way that is normally termed "price-fixing."

We normally think of anticompetitive agreements, such as price-fixing, in two ways: "horizontal" and "vertical." A horizontal restraint is one between direct competitors: for example, between different publishing houses. If two publishers said "we're both going to charge $20 for every new release," that would be a naked horizontal price-fix and almost certainly illegal per se.

A "vertical" agreement involves different steps of the production or distribution chain. For example, if manufacturer A makes widgets, and sells them to retailer B, and they agree that B will resell those widgets for $20, that is a vertical restraint. These types of agreements are sometimes illegal, but not automatically. The circumstances of the agreement must be examined carefully, and various factors considered, pro and con.

An "agency" agreement is a type of vertical arrangement that is often considered legal. An agent acts on behalf of someone else; it does not have independent authority. The publishers hiring Amazon as an agent is a little like hiring a guy off the street and telling him "go sell these books to whoever you can for $20." If the guy sold the books at a discount, he'd be violating the terms of his agency agreement.

There appears to be no evidence (of which I'm aware) that the prices of ebooks are uniform across publishers--in fact, the opposite is true: we have more variety now. Nor do I know of any direct agreements between Amazon and another retailer (e.g., Amazon and B&N agreeing with each other on retail prices). So, we do not appear to have a case of "horizontal" price-fixing here. Rather, we have a vertical restraint in the resale market. Amazon, by switching from an independent reseller to an agent, no longer has the ability to compete with other resellers by cutting prices through reducing its own margins.

However, it's important to note that no other retailer sells Kindle-format ebooks anyway. There is no direct competition to Amazon, only indirect competition from paper books and ebooks in incompatible formats. And the publishers have a legal monopoly, via the copyright laws, on their content, so they have more leeway regarding how their works are ultimately sold.

Now, with all of that said, I find the "Agency 5" agreements unfortunate, because so far they have led to price increases in some cases. I prefer Amazon's having the ability to cut prices by reducing its margins; I like lower prices. Accordingly, I think it's appropriate for regulators to go through the (detailed, fact-dependent) analysis of whether these restraints unreasonably harm competition. But calling them "price-fixing" is not really accurate, unless there's something going on we don't know about.

Interesting explanation of the subtleties of these laws. I would ask how the Maryland consumer protection law wrt MAP agreements might apply here.

As a reference, it's one I had on hand:

http://online.wsj.com/article/SB124087840110661643.html
The Wall St Journal
Apr 28, 2009
In a move that could lead to lower prices for consumers across the country, Maryland has passed a law that prohibits manufacturers from requiring retailers to charge minimum prices for their goods.
The law, which takes effect Oct. 1, takes aim at agreements that many manufacturers have been forcing on retailers, requiring them to charge minimum prices on certain products. The practice has surged since a controversial 2007 U.S. Supreme Court ruling that no longer makes such agreements automatically illegal under federal antitrust law.
Under the new state law, retailers doing business in Maryland -- as well as state officials -- can sue manufacturers that impose minimum-pricing agreements. The law also covers transactions in which consumers in Maryland buy goods on the Internet, even when the retailer is based out of state. That could potentially affect manufacturers throughout the country.
--
Henry Posner
B&H Photo-Video

Link to original: http://forums.dpreview.com/forums/re...8&changemode=1

The thing about the law is it applies to internet merchants selling to Maryland residents. Far as I know it has yet to be run through the courts but I do remember that WSJ article referenced in the above quote indicated several other states had similar laws in the process of being voted on which were likely to pass easily. But I haven't followed it since last year.

And yes, I know it's not a Federal law but due to the inclusion of internet merchants there is the potential for other states to simply add the same law on their books. I understand it's more complicated but thought it was worth mentioning here.

[drofgnal]

Aside from the disturbing trend of new release books costing too much (my personnal favorite to pick on is Follet's Fall of Giants at 19.99), I'm much more concerned about the recent price hikes on paperback books. They seem to cost even more than their released paperback version.

Before ereaders, I was usually a paperback reader. I traveled alot and bought at the airport whatever struck my fancy. Now alot of what I read is still not read until a paperback release, but I'm finding more and more of it is now more expensive than paper.

[LakeLoon]

Originally Posted by brecklundin

Interesting explanation of the subtleties of these laws. I would ask how the Maryland consumer protection law wrt MAP agreements might apply here.

Yes, that is interesting. For reference, the relevant provision is Maryland Commercial Law S. 11-204(b).

States frequently take, or try to take, a more proactive stance regarding competition than the federal laws. Whether this is wise, or even constitutionally permissible, varies from case to case. Here, the change was a response to a particular U.S. Supreme Court decision about the federal antitrust laws.

The potential application of the Maryland law is too complex to make a snap judgment about. But I would flag as important the question of whether the law applies to an "agent." An agent is arguably different from a "retailer, wholesaler, or distributor." We normally think of an agent as an extension of the principal--in other words, there are not two separate entities that can agree with one another; there is just a single entity that can price as it pleases. Essentially, it is as if the publishers decided to sell the books themselves, and hired Amazon to coordinate the logistics.

Would/will that argument prevail? Hard to say.

[Dulin's Books]

Originally Posted by JSWolf

Bravo? You think defending the Agency 5's tactics is worthy of bravo?

I believe that Kali wrote a very reasoned, reasonable, realistic post that expressed Kali's point in a way which avoided the normal pitfalls of internet debates. and yes I agree with what Kali wrote.

[Grimm]

Originally Posted by thrawn_aj

The Agency model is a capitalist's worst nightmare.

That bears repeating.

[Dulin's Books]

i should say also that i continue to agree with what Kali wrote https://www.mobileread.com/forums/sho...&postcount=106

I notice that others have resorted to name calling like "shill".

Also the retailers are still able to be retailers if they are creative. For instance Sony was offering gift cards at a discount that could be used for ebook purchasing. Others could do so as well.

[brecklundin]

LakeLoon:

Thanks for the direct link to the provision itself. I have not read it completely before and was dependent on people such as WSJ to offer insight on the implications.

I agree that the relationship between the publishers and retailers now feels more like the relationship seems more like a consignor-consignee arrangement. If there was not that US Supreme Court decision in 2007 this could never have happened, or at least it would have been a lot harder to justify in the eyes of the Feds.

I have been waiting on the fallout from the Maryland law to start happening where it gets to the courts at some point in time. I haven't read anything where Maryland has taking a company to court over violating the law. But if it can be upheld and other states also adopt similar laws it might be possible to close one of the loopholes in the, I think I understand it from your explanation, vertical agreements like the books. Also, btw, camera makers such as Hoya/Pentax (Hoya has now owned Pentax for about 4-years now) require this same sort of agreement which has all but stifled competition between the retailers resulting in huge price jumps. We are talking around 30%-40% as a rule but in several instances it was as much as 50%-60% within the past 2-years. It's the same situation only not with multiple manufacturers acting in concert...

I am hoping it's the acting simultaneously in concert which eventually will be the undoing of the situation in the book world. I have understood this, for lack of a better word, collusion to still be a big no-no for corporations. But I'm no expert just a layperson trying to wade through it all out of curiosity if nothing else...it's fun!

As for the camera world, I don't see how, given the change in the law in 2007, that it will happen in a Federal Level. But thankfully we still have some semblance of states rights and states, as you mention, go to a level above the Federal Law.

But one thing for sure, there is no way anyone is going to get the Supreme Court to overturn a ruling they made only 3-years back that just does not happen. And we won't get into the fact the Supreme Court should not be ruling on this sort of thing but those days are long go as well... hehehehe... So anything tried, if it ever even happens, has to approach the matter from a different direction, if at all. Still, as you point out it's that pesky new relationship between the publishers and retailers. No matter it will be years before anything happens, even in Maryland. I have a sense with money the way it is right now, a state would be reluctant to dedicate the resources to something like this right now even if it has far reaching repercussions beyond the single industry of books.

Still that acting in concert is like a huge red flag and just looks too juicy for some prosecutor to not want a crack at this one...time will tell I suppose.

Thanks a lot for the nice explanation of the not so subtle difference in the new relationship between publishers and booksellers and link!! Just a complicated world...and then ya die...

[JSWolf]

Originally Posted by Dulin's Books

I believe that Kali wrote a very reasoned, reasonable, realistic post that expressed Kali's point in a way which avoided the normal pitfalls of internet debates. and yes I agree with what Kali wrote.

I do agree we are having a good difference of opinion here. And no, won't resort to name calling.

[Fbone]

[QUOTE=Dulin's Books;1205238
Also the retailers are still able to be retailers if they are creative. For instance Sony was offering gift cards at a discount that could be used for ebook purchasing. Others could do so as well.[/QUOTE]

Borders is doing so now.

http://www.borders.com/online/store/BGIView_giftcards

[LakeLoon]

@brecklundin: glad you find the issue interesting. There plenty of nuances here, some of which are probably interesting only to a limited audience. The main thing I would say is that the Supreme Court's Leegin decision did not suddenly make a broad category of conduct "legal"--it really was about the ease or difficulty of proving an antitrust violation. The court basically said that vertical price agreements are not "by definition" bad for competition; defendants can try to show that their arrangement was not harmful. This result was widely expected and applauded by many economists. The legislative proposals responding to this decision are not necessarily grounded in sound economic theory.

Moreover, the Supreme Court decision has no immediate relevance to the "agency" issue I mentioned. The "agency" defense would have been just as valid (or invalid) prior to the decision.

That's interesting about the cameras. 30-50% price jumps sound like a real concern. I have to wonder what was really going on there. Normally you would look to competition from other brands (rather than other retailers) to prevent increases like that. Now if the manufacturers were agreeing on price hikes, that's totally illegal. However, due to a phenomenon called "conscious parallelism" / "economic interdependence," it is very possible to see large parallel price increases in a small market that aren't the result of a conspiracy . . .

[Worldwalker]

Referring to a shill as a shill is no more "name-calling" than referring to a publisher as a publisher.