Tor delays new-release sales to library ebook supplier Overdrive

[darryl]

@pwalker8. You can download the original opinion and order in the Apple case here:

https://www.justice.gov/atr/case-doc...86691/download

Amazon's agency agreement with MacMillan was signed on 5 February 2010. By the end of March Amazon had signed agency agreements with all but Penguin. My comments on both Fictionwise and Books on Board from my previous post remain unaffected, as does my timeline. Books on Board did indeed stop carrying Big 5 books, but not voluntarily. Please read the Publishers Weekly article I linked to in my last post, and the quote from that article. The owner of Books on Board blamed not only the deep pockets of his competitors but also the loss of 70% of his customers after the introduction of agency.

[pwalker8]

Originally Posted by darryl

@pwalker8. You can download the original opinion and order in the Apple case here:

https://www.justice.gov/atr/case-doc...86691/download

Amazon's agency agreement with MacMillan was signed on 5 February 2010. By the end of March Amazon had signed agency agreements with all but Penguin. My comments on both Fictionwise and Books on Board from my previous post remain unaffected, as does my timeline. Books on Board did indeed stop carrying Big 5 books, but not voluntarily. Please read the Publishers Weekly article I linked to in my last post, and the quote from that article. The owner of Books on Board blamed not only the deep pockets of his competitors but also the loss of 70% of his customers after the introduction of agency.

You still have to figure out some way around the fact that Fictionwise was sold to B&N 10 months before Apple ever started talking to the publishers. After that point Fictionwise was B&N. Why do you think Fictionwise was sold to B&N for a mere $15.7 M, which is basically pocket change to the big boys, 10 months prior to the agency rearing it's evil head? I doubt it was because they were making money hand over fist. My guess is that the Pendergrast brothers saw the writing on the wall and were cashing out.

March 2010 was exactly one year from the date that B&N bought Fictionwise and was 4 months after the Nook was released (Nov 30th, 2009). That strikes me as a lot more relevant.

The other issue is that the overall market share figures don't match the agency killed the book stores narrative. Prior to B&N and Apple entering the market in late Nov 2009 and March 31st, 2010 respectively, Amazon controlled 90% of the market. That doesn't exactly argue healthy independent ebook stores given that the Sony ebook store was in operation then as well.

So you are a independent ebook seller with Amazon having 90% of the market and with B&N and Apple, both with presumed deep pockets just starting to jump into the market. That decision to sell out a year prior is starting to look pretty good.

By 2011, it was roughly 60% Amazon, 27% B&N and 5% Apple. Amazon has slowly been rebuilding it's market share and it's back up to around 83% now.

There have been many examples of smaller front runners falling by the wayside when companies with deep pockets jump into the market. Anyone remember what mp3 player they were using before the iPod hit the market? It doesn't require some convoluted conspiracy theory to explain it.

[DuckieTigger]

@pwalker8: If I didn't know any better, you almost make it sound like Amazon is the only deep pocketed company that pays a ton of money for market share. Apple is not very innocent either in that aspect. They didn't plan to spend that much, but in the end the money they did spent was well worth it to get to #2 practically over night.

[darryl]

@pwalker8. A mere $15.7M dollars! If only. But you are right about Fictionwise. As I said agency probably didn't cause its demise. B&N did. What I expect happened is that B&N had plans for Fictionwise which it abandoned. What role agency played in B&N's decision I don't know. However, I do suspect that it probably played some role if B&N had been playing to grow the Fictionwise business, as a business based on discounting does seem to be in a little bit of trouble if it can no longer discount. Though as part of B&N it probably would have had better luck sourcing Big 5 ebooks than Books on Board did. However, B&N may well have abandoned its plans for Fictionwise well before agency.

[Fbone]

Regarding Books on Board, it was not profitable before Agency started and Overdrive offered to buy them but Mr LiVolsi could not convince his investors to accept their offer.
He stated in court documents he could not offer the deep discounts of other retailers nor did his company have the infrastructure to compete with the larger companies.

Judge dismissed case.
https://the-digital-reader.com/wp-co...6/01/Abbey.pdf

[ottdmk]

As much as Agency is loathed in these parts, I have to admit, I rather like it. It has its problems (the only thing I miss about buying paperbacks is Chapters' buy 3 get 4 sales, which Agency precludes) but without Agency, there would be no Kobo. And I like Kobo quite a bit.

I enjoyed reading Scalzi's article. I've only read Old Man's War from him, which was decent, but I've enjoyed reading his blog now and then.

As for the Tor thing... well, I'm used to waiting for books. Got that way from the windowing from hardcover to paperback. So even now, when I buy the few ebooks I buy, I really don't mind if they're not day-and-date with a hardcover edition. So waiting for them to hit the library? Don't mind that a bit.

Now if only all the publishers would see reason regarding the sales price and licensing terms they impose on libraries for ebooks...

[darryl]

@Fbone. Thanks for the link to the BOB summary judgement. The evidence makes it abundantly clear that BOB was in fact in trouble before agency. Whilst the transition to agency did result in BOB not having access to Big 6 ebooks for some period of time, the evidence shows that within a month and a half BOB had regained access to 3 of the 6 major publishers ebooks, including Penguin, Harper Collins and Simon & Schuster. It seems that BOB presented no evidence to back up the claims that it lost 70% of its customers because of this loss of access during transition.

It also appears that BOB was a very enthusiastic supporter of agency, since it was expected to eliminate the retail price competition and would negate the "deep pockets" advantage of its large competitors. It appears that the later legal proceedings were highly speculative. Whilst the allegations made, if true, may have resulted in a large payout, no evidence was provided to support these allegations. The court summed it up as follows:

Following the completion of discovery, the Publisher Defendants moved for summary judgment on the grounds that BOB has not shown that the alleged conspiracy caused the failure of its e-book business or that it suffered an antitrust injury. The motion is granted. The Publisher Defendants have provided an extensive record demonstrating that BOB was failing as a business before the Publisher Defendants implemented the agency model for distributing their e-books in 2010, and that BOB could not effectively compete through discounting or otherwise. Rather than identifying agency pricing as the cause of its demise, BOB instead touted agency pricing’s benefits to both investors and creditors. BOB fails to rebut this evidence and thus has not raised a disputed issue of material fact that would entitle it to a trial.

@pwalker8. Though I didn't find your timeline argument convincing, it is clear that agency was not the direct cause of the demise of either Fictionwise or BOB. In the case of BOB it appears to have played only a minor role if any. In the case of Fictionwise we can speculate that it may have played some role in B&N's decision to exclude it from future plans, though of course in the circumstances that must remain sheer speculation.

This is the first time I have actually looked into this, and I found the BOB summary judgement very interesting. I detest agency and would have preferred to find that the conspiracy was indeed to blame, so was sceptical. However, it seems that the conspiracy was little more than a convenient scapegoat in this instance.

[pwalker8]

Originally Posted by DuckieTigger

@pwalker8: If I didn't know any better, you almost make it sound like Amazon is the only deep pocketed company that pays a ton of money for market share. Apple is not very innocent either in that aspect. They didn't plan to spend that much, but in the end the money they did spent was well worth it to get to #2 practically over night.

No Amazon is not the only deep pockets company, thus my earlier comment about unable to compete with the deep pocketed Amazon, Apple and B&N. One sees the same dynamic in a lot of niches. Small indies jump in and establish a business. Once they proves that there is money to be made in the niche, the big boys jump in.

[pwalker8]

Originally Posted by darryl

@pwalker8. A mere $15.7M dollars! If only. But you are right about Fictionwise. As I said agency probably didn't cause its demise. B&N did. What I expect happened is that B&N had plans for Fictionwise which it abandoned. What role agency played in B&N's decision I don't know. However, I do suspect that it probably played some role if B&N had been playing to grow the Fictionwise business, as a business based on discounting does seem to be in a little bit of trouble if it can no longer discount. Though as part of B&N it probably would have had better luck sourcing Big 5 ebooks than Books on Board did. However, B&N may well have abandoned its plans for Fictionwise well before agency.

Yea, well for us mere mortals, $15.7 M is serious change, but take a look at what some of the big business have paid to buy various companies sometime. $15.7 M is way down there. One of my earliest jobs was working for a start up computer company providing access to legal databases. Their whole business model was getting bought out by one of the big boys (they were eventually bought out by Westlaw).

[pwalker8]

Originally Posted by ottdmk

As much as Agency is loathed in these parts, I have to admit, I rather like it. It has its problems (the only thing I miss about buying paperbacks is Chapters' buy 3 get 4 sales, which Agency precludes) but without Agency, there would be no Kobo. And I like Kobo quite a bit.
...

It was my understanding that physical books don't fall under the agency model. Could be wrong on that though.

[pwalker8]

Originally Posted by darryl

@Fbone. Thanks for the link to the BOB summary judgement. The evidence makes it abundantly clear that BOB was in fact in trouble before agency. Whilst the transition to agency did result in BOB not having access to Big 6 ebooks for some period of time, the evidence shows that within a month and a half BOB had regained access to 3 of the 6 major publishers ebooks, including Penguin, Harper Collins and Simon & Schuster. It seems that BOB presented no evidence to back up the claims that it lost 70% of its customers because of this loss of access during transition.

It also appears that BOB was a very enthusiastic supporter of agency, since it was expected to eliminate the retail price competition and would negate the "deep pockets" advantage of its large competitors. It appears that the later legal proceedings were highly speculative. Whilst the allegations made, if true, may have resulted in a large payout, no evidence was provided to support these allegations. The court summed it up as follows:



@pwalker8. Though I didn't find your timeline argument convincing, it is clear that agency was not the direct cause of the demise of either Fictionwise or BOB. In the case of BOB it appears to have played only a minor role if any. In the case of Fictionwise we can speculate that it may have played some role in B&N's decision to exclude it from future plans, though of course in the circumstances that must remain sheer speculation.

This is the first time I have actually looked into this, and I found the BOB summary judgement very interesting. I detest agency and would have preferred to find that the conspiracy was indeed to blame, so was sceptical. However, it seems that the conspiracy was little more than a convenient scapegoat in this instance.

I've been following all this from the beginning and paid attention when various things happen. Sometimes it's hard to find the articles from 5 years ago on google now, but I generally can remember the gist of what happened.

When big companies collide, none of them have clean hands. Amazon used the government to do their dirty work and paid them well to do it. Most of the big tech companies are in the same boat. Call me cynical.

I have zero doubt that Apple knew that the five publishers were talking together. The only real question is was what Apple did against US law. I still think that it wasn't and that the case would have been overturned if Scallia not died. Either way, it's water under the bridge.

My personal feeling is that we would be in a better place now if the case had been dismissed and we had several seriously competing ebook stores forcing each other to be more responsive to consumers. Apple's ebook push now might have the effect of forcing Amazon to react and improve their store. We shall see.

[darryl]

Originally Posted by pwalker8

When big companies collide, none of them have clean hands. Amazon used the government to do their dirty work and paid them well to do it. Most of the big tech companies are in the same boat. Call me cynical.

I have zero doubt that Apple knew that the five publishers were talking together. The only real question is was what Apple did against US law. I still think that it wasn't and that the case would have been overturned if Scallia not died. Either way, it's water under the bridge.

My personal feeling is that we would be in a better place now if the case had been dismissed and we had several seriously competing ebook stores forcing each other to be more responsive to consumers. Apple's ebook push now might have the effect of forcing Amazon to react and improve their store. We shall see.

Not a very reasonable position. You are entitled to your opinion, but we have been over this many times. Amazon made a complaint in writing pointing out a breach of the law. A very straight forward, flagrant and stupid breach, and almost a textbook price fixing conspiracy. Which is of course what the trial court found and each successive court affirmed

I understand your personal feeling, which is just that, a feeling. How would this furious competition take place if prices were fixed at the retail level? Given that the DOJ only succeeded in averting the retail price fixing rather than stopping it, and that we now have it anyway and have had now for some time, what would be materially different?

[DuckieTigger]

Speaking about libraries. I recently installed Libby to have access to browsing Overdrive everywhere - not just at home. Does Libby give notifications on holds that come up, or do I have to check email / check in Libby myself?

[tomsem]

Originally Posted by DuckieTigger

Speaking about libraries. I recently installed Libby to have access to browsing Overdrive everywhere - not just at home. Does Libby give notifications on holds that come up, or do I have to check email / check in Libby myself?

Neither Overdrive or Libby do notifications for some reason (at least on iOS). Your library(s) will send email when your hold takes effect. Seems like it would be a worthwhile feature.

[DuckieTigger]

Originally Posted by tomsem

Neither Overdrive or Libby do notifications for some reason (at least on iOS). Your library(s) will send email when your hold takes effect. Seems like it would be a worthwhile feature.

That is too bad. I just check it daily.