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06-07-2012, 03:38 PM | #1 | ||
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Barnes & Noble claims price fixing settlement will raise e-book prices
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06-07-2012, 03:45 PM | #2 |
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All these sob stories may turn out to be true, however that still doesn't excuse the collusive behaviour (if proven as such) nor should the possibility of bad things sway the DoJ from dealing harshly with those who colluded (if proven). They can tackle the future anti-consumer/competitive behaviour if/when it ever happens.
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06-07-2012, 04:26 PM | #3 |
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It's so sad. B&N doesn't want done unto them what they done unto others.
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06-07-2012, 06:28 PM | #4 |
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06-07-2012, 09:34 PM | #5 |
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This idea that price fixing and collusion are good for consumers is funny.
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06-08-2012, 04:28 AM | #6 |
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How can Barnes and Noble lose money on selling ebook when
1) it is forbidden to sell a publisher’s “entire catalogue at a sustained loss.” (SEE BELOW) 2) makes good margin on agency from the 3 Publishers that still use agency 3) makes good margin on other ebooks (smaller publishers, self-publishing etc..) http://paidcontent.org/2012/04/16/wh...r-readers-now/ Some limits Amazon cannot now, for example, make every single HarperCollins title it carries free (even if it were inclined to do so). When it comes time for Simon & Schuster, HarperCollins and Hachette to negotiate their new contracts, the settlement allows them to “negotiate a commitment from an e-book retailer that a retailer’s aggregate expenditure on discounts and promotions of the Settling Defendant’s e-books will not exceed the retailer’s aggregate commission under an agency agreement in which the publisher sets the e-book price and the retailer is compensated through a commission.” The settling publishers can also negotiate one-year contracts that “prevent e-book retailers from cumulatively selling that Settling Defendant’s e-books at a loss over the period of the contract.” In other words, under that type of contract, Amazon (or any other retailer who agrees to the contract) could discount certain titles as much as it wants, or give them away for free. But it could not sell a publisher’s “entire catalogue at a sustained loss.” So if Amazon and a settling publisher sign a contract that gives Amazon a 30 percent commission on each title sold, Amazon cannot discount that publisher’s entire catalogue by more than the total amount of the commission it receives. One thing to keep in mind though: Before the switch to agency, Barnes and Noble was selling ebooks using WHOLESALE. If they thought they couldn't compete, why did they start building the Nook 2 years before agency was implemented? They knew they could compete because they have 1 huge advantage over Amazon. Their physical stores. The Nook success is largely thank to that fact. Book lovers walk into a B&N and see Nook. Maybe be tempted to try it out and maybe buy one. Last edited by Top100EbooksRank; 06-08-2012 at 04:33 AM. |
06-08-2012, 04:58 AM | #7 | |
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Agree with the rest of your assessment though. |
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06-08-2012, 05:21 AM | #8 | |
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You lose money on some ebooks but you make more money on others. It's a strategy retailers have been doing for decades. In addition, Barnes and Noble can discount less than Amazon. According to the DOJ, Amazon has been "consistently profitable selling ebooks." |
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06-08-2012, 06:03 AM | #9 | |
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That is, there must be some money left once they have handed over the 70% (or whatever figures is negotiated) to the publisher. They cannot discount more than their 30% share. It doesn't seem to require them to make a net profit. That it, it does not seem to require that the money left over is enough to cover the cost of sales. It which case it would allow a retailer to run at a loss. |
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06-08-2012, 08:02 AM | #10 |
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It's quite simple. Barnes and Noble needs to separate the nook and eliminate their operating costs by running smaller kiosks and a purely online store.
Not rocket science here. The nook doesn't integrate well into store operations anyway. |
06-08-2012, 08:24 AM | #11 | |
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Maybe you're right but my view of that is not impartial. I really love going into a B&N bookstore; I'd hate to see them close shop (I admit though that I don't spend much money 'there'). I don't see why the nook shouldn't well-integrate though. Every nook they sell is a direct tie-in to the B&N ecosystem. It isn't an exclusive tie-in--not as tight as Kindle--but it's pretty close. They do a pretty good job of marketing the nook in the store. As soon as you walk into the store, there it is, front and center, usually with a dedicated info-clerk ready to show you the way. There's substantial floor space dedicated to showing off the devices. The only problem I really see is that the info-clerks are generally not very skilled in 'selling'; they're very passive. Perhaps what they need is a little more floorspace with comfy chairs so that perspective nook buyers can actually sit and read a nook for a few minutes, rather than using a tethered floor model. Perhaps I should stop derailing the thread. |
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06-08-2012, 08:25 AM | #12 | |
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Now, as repeatedly pointed out, Amazon does not in fact lose money selling ebooks so it is hypothethical rather than actual to suggest it as a reason for B&N's claimed inability to compete. More, that specific innabily presupposes that B&N *has* to price match Amazon across the board. There is no law that says they *have* to match every single last price on the Amazon catalog, though. Or any of them. Since Amazon's product line (Kindle-format ebooks) is not plug-compatible with Nook readers, one can argue that the two markets are distinct enough that B&N does not necessarily *have* to match Amazon prices across the board. That lock-in effect that Amazon detracts bring up every once in a while? B&N has its own lock-in; their customers have to jump through hoops to buy from Amazon and most don't. Having sold consumers on the glory that is epub or the their glowy nooks or their extensive line of Nook-exclusive books, B&N can afford not to price match every last Amazon title. They just *choose* to do so. (Monkey see, monkey do?) So their complaint starts out with a self-imposed condition: they *choose* to match all prices even when they dont have to and when doing so results in losses. Oh-kaaay... Now, you *do* have a valid point in that B&N operational costs *are* higher than Amazon. In several ways: debt servicing, revenue-sharing with partners, etc. Even if their NewCo were book-kept free of their B&M overhead and their Nook business were every bit as efficient as Amazon's in getting ebooks to customers, Nook has one added cost Amazon doesn't: ADOBE DRM costs. But that is another self-inflicted wound: surely it isn't Amazon's fault that B&N knowingly adopted a DRM scheme that increases their operational costs. Especially since B&N already *owned* a perfectly serviceable DRM server system in Fictiowise and their DRM servers. Purely as a WAG, I'm going to posit this was a case of the marketters ("We can use library ebook compatibility to claim we're better than Kindle!") winning out over the beancounters ("It increases our costs, reduces our margins, and reduces our attach rate--people reading library books aren't generating revenue for us!"). Whatever their reasoning, if their operating costs are higher, that is hardly Amazon's fault. If anything, I see it as further proof that the whole "Amazon is unfair" debate is based on treating operational costs as cast-in-concrete and fixed rather than variable, something a well-run company is constantly looking for ways to reduce. Their costs are higher and are going to stay higher until they *actively* find ways to bring them down; if not by getting rid of the ADOBE tax (unlikely by now) then by finding offsetting savings or revenues elsewhere, by being better than Amazon at *something*. Which is something the Nook hardware guys seem to get but not their ebook-peddling kin down the metaphorical hall. So we have a company *choosing* to compete on price, when they don't have to, even after *choosing* a production process that has higher inherent costs? B&N's whine is essentially saying they are incapable of competing on merit in a business they *chose* to get into and that consumers and authors should be penalized to protect B&N the consequences of their own actions. That sounds a lot like another bailout plea like the ones we've heard so much of late. So, is B&N "too big to fail"? Do we bail them out? Me, I think the real issue hidden behind the whining is that B&N got used to being top dog, after stomping half the indies in the land out of business, and they can't even conceive of a world where they are at best a distant second. So instead of looking for ways to be profitable and prosperous as number two, they pout, they whine and gripe, and keep looking for magic bullets to slay Amazon. I think they ought to stop whining and find a way to compete on something other than across the board price-matching. The way Target competes against Walmart without getting into a race to the bottom. In fact, Target forced Walmart to try to match *them* by being better in crucially profitable areas. Because that is what competitors do; they find ways to do what the other guy isn't doing or can't do. In other words: B&N grow up! (Kids these days...) |
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06-08-2012, 08:45 AM | #13 | |
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But the way they're doing it isn't the only way it *can* be done. Over in the Kindle robots thread this *product*came up: https://www.mobileread.com/forums/sho...0&postcount=99 People are *doing* this: http://www.deanwesleysmith.com/?p=5343 GAMESTOP and other B&M game retailers sell cards with download codes to sell digital currency, downloadable game add-ons (Right after selling you the DVD-based game), store-specific bonuses, and even full games. There is nothing to stop B&N from stocking ebook download codes on cards in their stores. Put a rack with the cards right next to the pbooks so people can browse and choose to buy the print or the ebook edition right there; just take the card to the register, have the card activated, and the user then inputs the download code on their Nook when they get home. A nice way to capture impulse buys in-store. (Or they could give each Nook user a loyalty card tied to their Nook--activating the ebook card at the checkout and running the Loyalty card queues the download automatically. Lots of ways to integrate ebooks and B&M retail.) Now, if B&N *chooses* not to explore those options, rest assured others are(see above) and will. The problem isn't lack of possibilities; it is lack of imagination and lack of will to compete. Edit: check the comments on the bottom of the page at Mr Smith's site. Lots of good ideas. Last edited by fjtorres; 06-08-2012 at 08:53 AM. |
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06-08-2012, 10:00 AM | #14 | |
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This is primarily how B&N lost most of my business to Amazon years ago. I'd go there looking for a book (often a new release) only to be told "we don't have that" "we don't get some new releases until a few weeks/months after release", etc. they would of course offer to order it, but it was just easier to go home and order it from Amazon. I'd actually never bought a book from Amazon until that kind of thing became prevalent at B&N and Borders as they devoted less and less of their square footage to books. |
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06-08-2012, 10:00 AM | #15 |
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