Judge approves settlement. Says It's In The Public Interest To Stop Price Fixing

[vxf]

Nice!

I am ever puzzled by how people seem to think that, somehow, they should have the right to regulate commerce between two willing parties. Amazon wants to sell, I want to buy, why should Apple have a say?

Regardless, I have absolutely no doubts that, in the long term, this will mean lower prices for everyone. And if Amazon captures the market, I see no ill. They can have 99% market share, for all I care. The day they decide to raise prices, restrict supply, or whatever, someone will spring in and fill that gap. Market share does not equal market power, in the absence of significant barriers to entry.

At the end of the day, forcing everyone to pay a higher price to allow the non-competitive sellers to survive means imposing a tax on everyone so that a minority preserves its freedom of choice. You want your indie bookseller? Go and pay its higher prices, but don't force me to. Because I don't care. If a minority of customers wants choice, they should pay for it out of their own pockets - not from mine.

[SeaKing]

Originally Posted by fjtorres

There's the comments to this report:
http://www.publishersweekly.com/pw/b...book-case.html

But they're probably thinking the sky *did* fall because of this:

Yup!
5 years of Government oversight on their contract negotiations and book-keeping.

As hilariously clueless as some of the comments there are, I rather like this one:

I guess techies have cooties.
And the publishers have to staff and pay hordes of them!
Worse, they might even (shudder) try to *mingle* with the superiors, the producers of culture!
Brrr!

I have to say it.
It couldn't have happened to a nastier bunch of a.. h.....

[fjtorres]

Originally Posted by SeaKing

I have to say it.
It couldn't have happened to a nastier bunch of a.. h.....

A more deserving bunch of Bizzaro World geniuses will suffice as a description.

Who else can imagine that somebody sued by the frakking government can recover damages from an uninvolved bystander?!!

[fjtorres]

Originally Posted by vxf

At the end of the day, forcing everyone to pay a higher price to allow the non-competitive sellers to survive means imposing a tax on everyone so that a minority preserves its freedom of choice. You want your indie bookseller? Go and pay its higher prices, but don't force me to. Because I don't care. If a minority of customers wants choice, they should pay for it out of their own pockets - not from mine.

I'm pretty sure that if everybody that "supports indie bookstores" actually *bought* from Indie bookstores, there would be no B&N or Amazon.

[SeaKing]

Originally Posted by DiapDealer

I think rescuers are still shoveling sky as fast as they can in hopes of getting to those trapped beneath it, but time is quickly running out.

Where can we speed up the clocks?

[tubemonkey]

Originally Posted by fjtorres

I guess techies have cooties.
And the publishers have to staff and pay hordes of them!
Worse, they might even (shudder) try to *mingle* with the superiors, the producers of culture!
Brrr!

[SteveEisenberg]

Originally Posted by vxf

Regardless, I have absolutely no doubts that, in the long term, this will mean lower prices for everyone.

Amazon stock has a current price to earnings ratio of 319.93. This compares to 15.47 for Microsoft and 15.99 for Apple. Even if you think the stock market valuation is based on Amazon revenue one day matching that of WalMart (maybe 9.5 times higher today), the Amazon valuation still can't be justified except with the idea that Amazon is going to substantially increase margins. If you go with the more plausible idea that the market doesn't think Amazon will get quite as big as WalMart, the implication is even stronger that Amazon will move towards the high profit margin model we see with other tech companies.

Stock market valuations are sometimes driven by emotions rather than facts. But there is something to weak versions of the efficient market hypothesis that would imply we can't know in advance if the valuation is irrational. I don't think the PE ratio's implication that Amazon is going to gain enormous market power, so as to become a profit machine, can be dismissed.

Market share does not equal market power, in the absence of significant barriers to entry.

Computer programming is hard work. I can't put a dollar amount on it, but creating a good web site for books is a high barrier to entry, if only because you mostly make your money off the backlist, which needs to contain hundreds of thousands of items.

EDITED: Perhaps more important as a barrier to entry than the cost of the programming is how long it takes us to finish big projects. Amazon.com, and barnesandnoble.com, required years to gradually build up to what they now have.

[fjtorres]

Originally Posted by tubemonkey

It's high school all over again, huh?
The geeks went on to be epub formatters while the cheerleaders and jocks went on to be purveyors of culture.
And now they are forced to rely on the geeks to getthe culture out to the unwashed masses just as they had to rely on the geeks to tutor them past math in High School.
Life is sooo un-fair!

[fjtorres]

Originally Posted by SteveEisenberg

Amazon stock has a current price to earnings ratio of 319.93. This compares to 15.47 for Microsoft and 15.99 for Apple.

Here: https://www.mobileread.com/forums/sho...d.php?t=190528

From the source, Jeff Bezos answers you:

By the way, one thing I should tell you is that our approach is our approach, and we don’t even claim it’s the right approach. It’s not something that’s new, but it’s something we’ve done since the founding of the company. In my view, you set up the business in a way that is aligned with the customer, or you can set it up in odds with the customer. When you have the option, you should figure out a way to be in alignment. Sometimes that requires you to be more patient, so it’s part and parcel with long-term thinking.

But if you were a short-term-oriented share owner, you might say let’s get the money up front. That’s where I decline to say that approach is wrong. I won’t say that. But it’s not ours.

Translation, Amazon makes its money in small chunks over a long period of time rather than big chunks up-front. It's long-tail thinking applied to their entire company.

So, the people that value amazon stock have to value them more as bonds or munis rather than short-term day-trader investments. And at a time of effective negative interest rates on bonds, Amazon's slow but steady approach obviously appeals to enough people to bid up their stock.

As Bezos says, its not a matter of a right way or a wrong way; just people liking *their* way. Whether it be consumers or investors. It is what it is and it is not going to change soon.

[JSWolf]

Originally Posted by frahse

These are all approximate costs, but I think realistic in time.

A new digital book (fiction) should normally cost $9.99.
In 2 years, the cost of the 9.99 book should be no more than 7.99. (This is because there is not a used market.)
Exceptions for the above would be
1. If it is a really greatly anticipated book and then for the first year it should cost as much as the market will bear. Also it might be a very large book. Or a great author.
2. If it is an author trying to get a build up acceptance and their name and willing to cut prices in order to gain a following.

If a book comes out as a hardcover, the eBook should be no more then $9.99. When the book goes paperback regardless of price & format of paperback, the eBook should cost no more then $4.99. I think those prices are very fair.

[vxf]

Originally Posted by SteveEisenberg

Amazon stock has a current price to earnings ratio of 319.93. This compares to 15.47 for Microsoft and 15.99 for Apple. Even if you think the stock market valuation is based on Amazon revenue one day matching that of WalMart (maybe 9.5 times higher today), the Amazon valuation still can't be justified except with the idea that Amazon is going to substantially increase margins. If you go with the more plausible idea that the market doesn't think Amazon will get quite as big as WalMart, the implication is even stronger that Amazon will move towards the high profit margin model we see with other tech companies.

Stock market valuations are sometimes driven by emotions rather than facts. But there is something to weak versions of the efficient market hypothesis that would imply we can't know in advance if the valuation is irrational. I don't think the PE ratio's implication that Amazon is going to gain enormous market power, so as to become a profit machine, can be dismissed.


Computer programming is hard work. I can't put a dollar amount on it, but creating a good web site for books is a high barrier to entry, if only because you mostly make your money off the backlist, which needs to contain hundreds of thousands of items.

You want me to believe that Amazon's high PE ratio is an indication of the fact that they will increase, and successfully protect, higher profit margins? That's just perverse logic. An expectation of higher profit margins might explain a high PE, but claiming causality is perverse. This reasoning is just a non sequitur.

First, high PE could reflect an expectation for growth (and PE is generally assume to be, first of all, a proxy for growth), rather than for increased profit margins.

Second, we are talking about EXPECTATIONS. Are you trying to claim that Amazon has some secret plan to raise prices, but that the financial industry someone knows about it, while us ebook consumers are being drawn into the trap? Ya....

Third, higher profit margins don't necessarily mean higher prices, which you seem to imply. They could result from a different product mix and economies of scale (especially in a business that is dominated by fixed costs, such as e-commerce).

Barriers to entry? In no way will you convince me that barriers to entry in ebooks are anywhere comparable to those of setting up any brick-and-mortar type of outlet, or to retaining (even online) printed books.

[JSWolf]

So when do these publisher's eBooks become able to be discounted, put on sale, and have more realistic prices?

[fjtorres]

Originally Posted by JSWolf

So when do these publisher's eBooks become able to be discounted, put on sale, and have more realistic prices?

Theoretically, about a month.
But don't expect realistic list prices. As Meat Loaf said: "Two out of three ain't bad."

[JSWolf]

Originally Posted by fjtorres

Theoretically, about a month.
But don't expect realistic list prices. As Meat Loaf said: "Two out of three ain't bad."

But, if I can get a book now at $7.99 with say a discount of 35% from Kobo, I'd be good to go.

[SteveEisenberg]

Originally Posted by vxf

You want me to believe . . . .

Maybe this is just your rhetorical style here and should be ignored. But, for the record, I do not ask you to match your beliefs to mine. I'm here for fun, not to bend minds.

Are you trying to claim that Amazon has some secret plan to raise prices, but that the financial industry someone knows about it, while us ebook consumers are being drawn into the trap?

No, I'm just trying to claim what I've previously claimed.

Jeff Bezos is already an unusually long-tenured CEO. In a few years, there could be a whole different management team. So any plan, secret or public, may not matter.

In no way will you convince me that barriers to entry in ebooks are anywhere comparable to those of setting up any brick-and-mortar type of outlet, or to retaining (even online) printed books.

Of course I won't convince you. But for the record, I did not compare the barrier to entry to brick and mortar, but rather to the barrier to entry of a new on-line book store with a big inventory.

Now, it's true that someone could, in a few months, set up a bookstore for just best-sellers. Amazon has to protect against this by being willing to take losses on those few titles. If all you read is fiction best-sellers, and you purchase them as eBooks, perhaps the settlement is in your financial interest.