Amazon says 'will have to capitulate and accept Macmillan's terms' - Page 9

kilron · 02-01-2010, 01:10 PM

there's no anti-trust issues in agency pricing. the publishers own the content and they can sell it for whatever they want. its that simple. your correlation to physical goods doesn't work (clothes, appliances, etc.) because physical goods are much more complex, but if they wanted to, manufacturers could do that as well. its just that with very small data sized electronic content, the agency model is ideal. but there's no anti-trust issues there. if you own something that is for sale, you're entitled to sell it for whatever price you want. period.

what you leave out in explaining agency pricing vs. retail pricing is that neither of those was explicitly what amazon was doing with their kindle ebooks. in short though, they were more or less doing agency pricing, but with the percentages flipped so that amazon kept 70%, and also dictated pricing, thus completely screwing the publishers. amazon could make their ebooks less expensive than the physical books, make the majority of the profit and the publishers were left with no other coice. if you wanted a better cut like 50% then you had to guarantee amazon exclusivity and other things.

apple entering this business is what the publishers have been waiting for, though if agency pricing really takes hold, it could just as easily bring about a new wave of self-publishing as well, which also would be a very good thing in some ways.

DawnFalcon · 02-01-2010, 01:15 PM

Kilron - If all the major book publishers set the same basic price? That's a cartel.

And lol 70%

kilron · 02-01-2010, 01:45 PM

why would they have to set the same basic price? i don't think i wrote that. i wrote that they (meaning the publishers as individual companies) are free to price their books and sell them for whatever they want. you're not being forced to buy them.

why is 70% so amusing? can you show me that it was otherwise before their recent announcement?

mcl · 02-01-2010, 01:49 PM

Quote:

Originally Posted by kilron

why would they have to set the same basic price? i don't think i wrote that. i wrote that they (meaning the publishers as individual companies) are free to price their books and sell them for whatever they want. you're not being forced to buy them.

why is 70% so amusing? can you show me that it was otherwise before their recent announcement?

Amazon paid 50% of hardcover list for titles.

Avarwen · 02-01-2010, 02:01 PM

Bummer but people will make their choice I'm hoping that people will just flat out refuse to buy them at this price. I'll just continue as I am and wait for paper back versions to come out or buy them used.

zerospinboson · 02-01-2010, 02:03 PM

Quote:

Originally Posted by kilron

there's no anti-trust issues in agency pricing. the publishers own the content and they can sell it for whatever they want. its that simple. your correlation to physical goods doesn't work (clothes, appliances, etc.) because physical goods are much more complex, but if they wanted to, manufacturers could do that as well. its just that with very small data sized electronic content, the agency model is ideal. but there's no anti-trust issues there. if you own something that is for sale, you're entitled to sell it for whatever price you want. period.

Yet agency pricing in a "new market" will mean a huge inflexibility on the part of the publishers in even experimenting with lowering the book prices to see if the volume increase weighs up against the lower profit/item. The reason this model is stupid is because it assumes Publishers have perfect information wrt interest, sales, etc., and will be able to respond quickly to changes in the market. This is one of the major reasons why retailers have a role to play in this process. From now on, you won't even see temporary price reductions any more.
Yet because the publishers currently seem to think that the market is still so new that they can get more of what they claim is 'competitive rent', due to some sort of silly first-mover advantage.
Only because there is a legal monopoly at work, there is no downward push through new entrants. Which means that it may very well be that they will in the end make more profits from the increased volume from selling at a lower price point, but they have no incentive whatsoever to see if this is 'already' the case.
Basically, competition is a joke here. And it saddens me to no end that this is all pushed and even actively made possible by the paragons of "free market capitalism".

Daithi · 02-01-2010, 02:34 PM

Quote:

Originally Posted by kilron

there's no anti-trust issues in agency pricing... [snip]... period...

I don't know if there are anti-trust issues or not. However, the nature of copyright law is that an author, and by extention their publisher, are granted a monopoly. If Amazon chose to sue on the basis that an "agency pricing" scheme harmed the public because of the monopoly then they may have an argument. Then again, maybe they wouldn't. Nobody can know unless it is tried, and it doesn't look like Amazon will do this. Upon reflection, I doubt there is an anti-trust issue here, but I don't think it is cut and dried.

Quote:

Originally Posted by kilron

What you leave out in explaining agency pricing vs. retail pricing is that neither of those was explicitly what amazon was doing with their kindle ebooks. in short though, they were more or less doing agency pricing, but with the percentages flipped so that amazon kept 70%, and also dictated pricing, thus completely screwing the publishers...

Your understanding of Amazon's business model is simply wrong. Amazon does not keep 70% of ebook sales (or any sales). That's why people were laughing at you. Amazon was paying self-publishers, and tiny publishers, 30% of the list price. Amazon then discounted this list price by 20% and sold it to the public. On average this gave self-publishers and tiny publishers a 45% cut and Amazon a 55% cut.

In the case of large publishers like Macmillan things worked differently. Amazon paid them 50% of the list price. Then Amazon sold it for $9.99 which is less than they had paid for the book. Amazon did this to help create the ebook market. What this means is that the publishers where getting 100% of the profits on ebooks based on hardcover prices. So far from "screwing" the publishers, Amazon wasn't even asking them to contribute in helping to establish the ebook market.

kacir · 02-01-2010, 03:11 PM

Quote:

Originally Posted by Rob G.

Now, maybe someone can explain this to me, because I'm not sure I understand what's happening here. Amazon is paying everyone's wholesale price but then they're choosing to sell at $9.99, which would seem to be a loss. Is this correct?

Yes. That is correct.
I have been trying to get this message through for days.

JSWolf · 02-01-2010, 03:19 PM

Quote:

Originally Posted by rmclachlan

Surely the Publisher and the Authors have a right to make a decent living. I have no sympathy at all for Amazon - about time someone stood up to them.

The cost to make eBooks is cheaper then a hardcover. So I'm not paying that much for an eBook that is still in hardcover. If we go on the premise that the extra $$$ is going to the hardcover binding, then eBooks should be less then paperback prices from day one as there is no expensive binding to pay for.

cvkemp · 02-01-2010, 03:22 PM

Jon
I agree with you completely

Chuck
PS I belive in paying a fair price, but I do not believe that I should be paying the same for digital as paper.

kilron · 02-01-2010, 03:29 PM

i'll have to find where i got that figure from regarding amazon. i'm pretty sure it was a 70/30 split for the most part. at least until their recent change a couple weeks ago.

getting back to the point, i honestly don't see what all worrying is about. so publishers want more control. so what? as an end user, what will that matter? we should be more worried about the fragmented eBook format system and interoperability issues between eBook readers. Amazon surely doesn't seem to care very much about that do they? is that a lesser problem than paying a few extra dollars on occasion per book?

to me, the agency system makes sense because we're dealing with minute data files (by today's standards) that simply need to be delivered over the internet. we're no longer dealing with physical books that have to be laid out, produced and then shipped to warehouses where they'll be shipped somewhere else after that. to that end, the multi-national store now has the same power as the mom-and-pop store. right? in the same way, you could have the publishers cease to have anyone sell their ebooks besides themselves. what if the big publishers opened their own online storefront where all of their eBooks were for sale (in the various eBook formats, whichever you needed for your device accordingly) and that was the only place you could purchase them. what's to stop them from doing that? why would this be a bad thing?

these are books of original content and thus are subject to copyright law. books are unique things in this way. why shouldn't the publisher/owner have ultimate control over it? it works much the same way with recorded original music and also pieces of artwork.

like the music? support the musician. like the artwork? support the artist. like books? support those authors and their rights over their works, not the stores trying to dictate terms of sale.

EowynCarter · 02-01-2010, 03:54 PM

Quote:

Originally Posted by JSWolf

The cost to make eBooks is cheaper then a hardcover. So I'm not paying that much for an eBook that is still in hardcover. If we go on the premise that the extra $$$ is going to the hardcover binding, then eBooks should be less then paperback prices from day one as there is no expensive binding to pay for.

No, but you have to pay developers for the website, servers, power, support.. all that...

Daithi · 02-01-2010, 04:08 PM

Yes, it works just like the music industry. The producer/publisher screws over the artists.

I won't feel a bit sorry for the producers/publishers when artists start cutting them out completely and selling directly through big retailers like Amazon. BTW, Amazon is now paying authors 70% for ebooks offered between $9.99 and $3.99, compared to publishers who typically give them a platry 8% of list price.

guyanonymous · 02-01-2010, 04:10 PM

Quote:

Originally Posted by EowynCarter

No, but you have to pay developers for the website, servers, power, support.. all that...

All minimal, I believe, when compared the costs associated with purchase and mere maintenance of printing equipment used in the publishing industry (not even considering materials) if they go beyond basic print-on-demand of a few copies at a time.

I admit, though, I'd love to have some of the print-on-demand equipment and digital press stuff for personal projects

TallMomof2 · 02-01-2010, 04:15 PM

Even though I won't be paying the extra money I'll be curious to see if the extra cost for ebooks results in better formatted books and maybe even cover art. Over half of the DRMed titles I purchase don't come with cover art beyond either a scanned title page or a generic cover. If the publishers insist on higher prices then I sincerely hope that they provide a better product.

02-01-2010, 01:10 PM	#121
kilron Connoisseur Posts: 87 Karma: 150 Join Date: Jan 2010 Device: iPod touch	there's no anti-trust issues in agency pricing. the publishers own the content and they can sell it for whatever they want. its that simple. your correlation to physical goods doesn't work (clothes, appliances, etc.) because physical goods are much more complex, but if they wanted to, manufacturers could do that as well. its just that with very small data sized electronic content, the agency model is ideal. but there's no anti-trust issues there. if you own something that is for sale, you're entitled to sell it for whatever price you want. period. what you leave out in explaining agency pricing vs. retail pricing is that neither of those was explicitly what amazon was doing with their kindle ebooks. in short though, they were more or less doing agency pricing, but with the percentages flipped so that amazon kept 70%, and also dictated pricing, thus completely screwing the publishers. amazon could make their ebooks less expensive than the physical books, make the majority of the profit and the publishers were left with no other coice. if you wanted a better cut like 50% then you had to guarantee amazon exclusivity and other things. apple entering this business is what the publishers have been waiting for, though if agency pricing really takes hold, it could just as easily bring about a new wave of self-publishing as well, which also would be a very good thing in some ways. Last edited by kilron; 02-01-2010 at 01:15 PM.

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Kindle's Terms of Service	WebDesignEbooks	Amazon Kindle	2	09-01-2010 11:04 PM
When will amazon and apple accept manuscript submissions for publication?	bwana	General Discussions	2	04-09-2010 06:38 PM
Unutterably Silly Aussie terms: What do you think they mean?	sherman	Lounge	134	03-30-2010 02:51 AM
Speaking to me:Terms and Conditions	Bob Russell	Lounge	1	11-14-2005 09:01 AM

02-01-2010, 01:15 PM	#122
DawnFalcon Banned Posts: 2,094 Karma: 2682 Join Date: Aug 2009 Device: N/A	Kilron - If all the major book publishers set the same basic price? That's a cartel. And lol 70%

02-01-2010, 01:45 PM	#123
kilron Connoisseur Posts: 87 Karma: 150 Join Date: Jan 2010 Device: iPod touch	why would they have to set the same basic price? i don't think i wrote that. i wrote that they (meaning the publishers as individual companies) are free to price their books and sell them for whatever they want. you're not being forced to buy them. why is 70% so amusing? can you show me that it was otherwise before their recent announcement?

02-01-2010, 02:01 PM	#125
Avarwen Connoisseur Posts: 87 Karma: 12170 Join Date: Oct 2009 Device: EZ_ Reader, Nook wifi, Kindle 3G	Bummer but people will make their choice I'm hoping that people will just flat out refuse to buy them at this price. I'll just continue as I am and wait for paper back versions to come out or buy them used.

02-01-2010, 03:22 PM	#130
cvkemp Loving life Posts: 1,430 Karma: 7991496 Join Date: Mar 2009 Location: Hot Springs Village, Arkansas Device: PaperWhite 6 SE, Fire HD8	Jon I agree with you completely Chuck PS I belive in paying a fair price, but I do not believe that I should be paying the same for digital as paper.

02-01-2010, 03:29 PM	#131
kilron Connoisseur Posts: 87 Karma: 150 Join Date: Jan 2010 Device: iPod touch	i'll have to find where i got that figure from regarding amazon. i'm pretty sure it was a 70/30 split for the most part. at least until their recent change a couple weeks ago. getting back to the point, i honestly don't see what all worrying is about. so publishers want more control. so what? as an end user, what will that matter? we should be more worried about the fragmented eBook format system and interoperability issues between eBook readers. Amazon surely doesn't seem to care very much about that do they? is that a lesser problem than paying a few extra dollars on occasion per book? to me, the agency system makes sense because we're dealing with minute data files (by today's standards) that simply need to be delivered over the internet. we're no longer dealing with physical books that have to be laid out, produced and then shipped to warehouses where they'll be shipped somewhere else after that. to that end, the multi-national store now has the same power as the mom-and-pop store. right? in the same way, you could have the publishers cease to have anyone sell their ebooks besides themselves. what if the big publishers opened their own online storefront where all of their eBooks were for sale (in the various eBook formats, whichever you needed for your device accordingly) and that was the only place you could purchase them. what's to stop them from doing that? why would this be a bad thing? these are books of original content and thus are subject to copyright law. books are unique things in this way. why shouldn't the publisher/owner have ultimate control over it? it works much the same way with recorded original music and also pieces of artwork. like the music? support the musician. like the artwork? support the artist. like books? support those authors and their rights over their works, not the stores trying to dictate terms of sale.

02-01-2010, 04:08 PM	#133
Daithi Publishers are evil! Posts: 2,418 Karma: 36205264 Join Date: Mar 2008 Location: Rhode Island Device: Various Kindles	Yes, it works just like the music industry. The producer/publisher screws over the artists. I won't feel a bit sorry for the producers/publishers when artists start cutting them out completely and selling directly through big retailers like Amazon. BTW, Amazon is now paying authors 70% for ebooks offered between $9.99 and $3.99, compared to publishers who typically give them a platry 8% of list price.

02-01-2010, 04:15 PM	#135
TallMomof2 Kindlephilia Posts: 2,017 Karma: 1139255 Join Date: Nov 2007 Location: Snowpacolypse 2010 Device: Too many to count	Even though I won't be paying the extra money I'll be curious to see if the extra cost for ebooks results in better formatted books and maybe even cover art. Over half of the DRMed titles I purchase don't come with cover art beyond either a scanned title page or a generic cover. If the publishers insist on higher prices then I sincerely hope that they provide a better product.

Advert

Advert