Apple says DoJ lawsuit 'fundamentally flawed,' could harm consumers - Page 2

And Apple doesn't have exclusive rights to anything it sells in iTunes? Like the entire Beatles library.

I believe that was only for a limited time.

There are plenty of music from The Beatles to be had in stores all over the world, including on Amazon.

• http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Dpopular&field-keywords=the+beatles

The difference you're failing to see is that Apple has secured digital (download) rights for a period whilst Amazon has secured rights to all forms of many books and publishers. This means it's not just Apple's iBookstore that won't get access to the digital content but Barnes & Noble, Wal-Mart, and any other store that would sell the printed medium.

On a 40 year old catalog? Another difference is you can rip CDs yourself to get it on your portable music file player. You can't "rip" a paper book like that.

It's rough being the new Microsoft. There once was a time when Microsoft didn't have a single lobbyist then they learned you take it hard and deep when you don't. Apple is the new Microsoft they better get use to this. 

 

You could scan a book as pdf's, but who'd want to.

Can you tell me what period of time? It could be said that Apple killed competition with $.99 songs that its competitors could not match.

It's possible, but the level of inconvenience is off the charts in comparison, days vs. five minutes for just one work. Not something most regular someone would do for themselves.

A best seller is a best seller whether its 40 yrs old or 40 days old. Ripping a book? Good idea for a app.

Good point. Another distinct difference is that if you want to purchase The Beatles on a song-by-song basis to listen via your Amazon Fire or non-Apple device you can do so as there is no DRM, yet with Amazon's eBooks there is no DRM-free model that would allow you to transfer the content to another app.

At least Amazon has put their app on pretty much every device imaginable but there formatting is wretched which does take away from the reading experience. It's akin to Amazon selling DRMed 64Kbps MP3s.

That said, I don't see anything overtly illegal about Amazon's exclusive deals even though I agree with the OP about DoJ priorities and why this (and there loss-leader eBook sales) aren't being looked into.
Edited by SolipsismX - 5/23/12 at 8:16pm

They killed competition by creating a revenue stream for internet-based music when thievery was the only outlet?

They killed competition with 99¢ songs by not creating exclusive deals that other vendors could use?

I think you're really reaching now.
Edited by SolipsismX - 5/23/12 at 8:25pm

"In short, the agency model allows publishers to set content prices in exchange for a "most favored nations clause" that bars the houses from selling e-books to competing retailers at lower prices. The strategy is diametrically opposed by the "wholesale model" used by Amazon which lets resellers incentivize purchasing by offering products at below-cost prices."

 

The second sentence in the above quote from the article is categorically wrong.  The so-called "wholesale model" was the industry standard at the time - all book sellers, including Amazon, Barnes and Noble etc. sold books under this model.  The Agency Model, with support from Apple, was designed to impede Amazon's success in selling ebooks. The model gave an opening for Apple's ebook store and gave Publishers absolute control over prices.  I fail to see how this whole fiasco has benefited consumers other than giving them the ability to pay higher prices. 
 

You can't see how the agency model has any validity in business or are you saying that it, in itself, is an illegal practice?

The only questionable part is the most favored nations clause but that doesn't mean that Apple and the publishers colluded to artificially set prices.

I'm reaching? Where are all the brick and morter stores that sold music? Entire nationwide chains gone because they could not compete with the $.99 per song. Now the thievery is almost all gone and is iTunes the saviour to the music industry?

B&M stores were withering out before the iTMS was around. The internet not only brought with it the ability to steal music easily but to purchase CDs online at reduced costs. You can blame all you want but the causation but it's wrong.

Apple telling the government that their suit is essentially idiotic, while true, will probably result in additional punitive measures by our all-powerful, all-knowing overlords.

It sure as hell didn't help now did it? Nobody here was crying stop the monopoly when B&M music stores was closing down and the cheapest place to buy music was on iTunes. And there was no "well you can set the price and we'll take 30%" it was ""sell the songs for $.99 or we wont sell it"

I cited a report in the last Apple/DOJ thread from a publisher that stated that Apple's agency model caused the average price of the books they sold to decrease. I don't think there's any evidence for the market as a whole. Lots of people ASSUME that the agency model will increase prices, but there's no evidence to support that. For at least one publisher, the priced dropped.


Where is the evidence of collusion? So far, there's none. Apple proposed a new pricing model and even suggested that the publishers would benefit. But neither of those is collusion - and the DOJ hasn't provided any evidence of collusion, either. So where's the evidence?

Thanks TBell, I missed by that much.

 

Amazon have always and continue to sell goods for below their actual market value in order to push sales of their hardware. This is probably more anti-competitive than what occurred with the iBookstore.

 

What would have happened if Apple had not opened a book store and B&N and the others trying to open eBook stores had failed because of Amazon's tactics?

 

The same as what always happens when someone is in a monopoly position. Look at the mobile phone industry.

 

Your tax payer's dollars are being wasted on this action. I would rather it was spent trying to find out who was the instigator of it. If it came from Amazon then there are much bigger questions for Bezos and the DoJ to answer

[quote name="jragosta" url="/t/150257/apple-says-doj-lawsuit
-fundamentally-flawed-could-harm-consumers/40#post_2114877"]
I cited a report in the last Apple/DOJ thread from a publisher that stated that Apple's agency model caused the average price of the books they sold to decrease. I don't think there's any evidence for the market as a whole. Lots of people ASSUME that the agency model will increase prices, but there's no evidence to support that. For at least one publisher, the priced dropped.
Where is the evidence of collusion? So far, there's none. Apple proposed a new pricing model and even suggested that the publishers would benefit. But neither of those is collusion - and the DOJ hasn't provided any evidence of collusion, either.
So where's the evidence?[/quote]

Well lets see if the agency model does truly lower prices. Songs that used to cost $.99 on iTunes are now $1.29, nope that's a increase. Did Apple so graciously let the record labels set the price and merely act as the "agent" or did it strong arm them into agreeing to $.99 a song. The competition could not of offer this same predatory price so they're mostly now gone.

B&M book stores were disappearing long before the iBooks store thanks in no part to Amazon and other internet traders. Amazon selling ebooks below cost certainly played a part in that.

 

The music industry only exists as it does now thanks to iTunes. Piracy levels have fallen dramatically (much to the chagrin of the RIAA) as new owners of digital music devices have a legitimate method of purchasing digital content.

 

The record industry left to it's own devices and pricing and multiple DRM'd stores was not working.

 

The publishing industry left to their own devices and guided by Amazon was facing the same abyss. Imagine how many independent authors would have received a chance to enter the market under that model.

 

Apple have even supplied the tools for writers to create and publish works.

 

What was Amazon's plan? Oh, that's right... pilfer existing authors from the existing publishing houses. Really innovative

So in short, there'd be no music at all if it weren't for iTunes and nobody knows what's good for them, they need Apple to tell them? You OD'd on kool-aid today.

Walmart, you could buy cheap music at Walmart, matter of fact you still can.

 

Artificially high would imply there is a 'correct' price for ebooks. That is a rather baseless assumption since you can't qualify a book like you can a pound of fruit or a gallon of gas. 

 

And even if there is collusion it's between the publishers. the DOJ has provided zero evidence that Apple was part of anything of such nature and Apple should be removed from their investigation as, pointed out by others, a sales model is NOT the same as collusion. 

 

Before 2010 Amazon was THE source for ebooks which allowed them to use predatory pricing tactics such as favored nation clauses and undercutting prices using the ebooks as a kind of loss leader so that they could get all the sales since no one else could price under them or even afford to since they didn't have all of Amazon's various stock to offset profit losses created by selling at or below cost. 

 

The favored nation clauses (used by Apple and Amazon) keep the playing field level so that consumers really do have a choice. They aren't punished for choosing ibooks over Kindle by having to pay tons more. And despite the tin foil hat crew saying that the publishers are jacking up the prices, you'll actually find that a good number of the mid and back list are as low as $5.99 and that was set by the publishers. Yes they put up a lot of new titles still around $19.99 but that's still a good $5-10 less than the hardcover 'real' book and the prices come down. Most of us are used to waiting for the paperback so it shouldn't be that hard to wait a few months for the price to drop to 'paperback levels'

 

No it isn't. It's the definition of Steve Jobs going to ONE publisher that was hesitant to sign up to personally try to change his mind. And one publisher isn't collusion. 

 

so the authors publish it themselves. You don't have to be signed up with a big 5 to submit to the iBooks store. And very likely not Kindle either. 

 

And the best part is that the author gets to keep the whole 70% instead of ending up with more like 5% of the 70%

 

ANd where was the DOJ during this. Where were they checking the questions of predatory pricing etc. 

 

no where. As you say they are doing it cause Apple has big cash and investigating Apple makes it look like they are doing their jobs and gets that effort big press. 

 

so what? that has zero to do with any of the issues in this case. 

 

and actually no Apple can't, because the publishers set the price. Just like they decide if the title will be in the iBookstore in the first place. Anyone that doesn't like that 'apple devices only' can choose not to sign up. 

 

And? What the record labels do is moot in regards to what the book publishers will do. 

 

Yeah, for a whopping 30 days. BFD. With so much of the business migrated away from paper and onto the ebook format, they'd only be hurting themselves if they tried to go back to that tactic anyway. Different times, different marker.

 

What needs to be expanded in these statements is the fact that Amazon was selling at a loss to grow market share for digital purchases against it's retail competitors. Therefore, fewer and fewer sales of the same book were being sold at a profit from the other retailers and thus forcing the Publishing Industry to accept Amazon's loss leading terms which then Publishers would have to raise the prices on traditional print or get out of the print business.

 

Apple's ecosystem being what it is offered their app model for the iBookstore and Publishers were thrilled, started making a profit again and broke Amazon's extortion.

 

End of story.

So where is proof of this "40% increase" in the average cost of eBooks?

Once again we are faced with a rubbish claim based on cherry picked examples with no actual basis in reality.

Feel free to post a link to back your post up.

It is often repeated that not average prices but only best sellers went up. You can call this cherry-picking if you like, but those are the books people actually buy; feel free to include in the average all classics below $1 if you think that's a point worth making.

 

Here's one link to an article form December 2011 talking about the price hike: http://www.dailymail.co.uk/sciencetech/article-2074946/An-eBook-reader-Christmas-tree-Bad-news--publishers-band-hike-prices-higher-real-books.html

I don't see anyone challenging the data in the comments and I wasn't able to find any rebuttals, so I take it that the few examples given in the article were representative of the market as a whole. You could perhaps provide your own proof of best sellers dropping in price for that time period... In the end, the DoJ will have to support its case with evidence and I suppose it is better positioned to find the relevant data, as suggested by the three companies that chose to settle.

Where were you when Apple priced songs lower than their competition could match?

WE WANT HIGHER PRICES!!!!!!

WE WANT HIGHER PRICES!!!!!!

WE WANT HIGHER PRICES!!!!!!

WE WANT HIGHER PRICES!!!!!!

WE WANT HIGHER PRICES!!!!!!

WE WANT HIGHER PRICES!!!!!!

WE WANT HIGHER PRICES!!!!!!

 

GOOOOOO APPLE!!

 

Hopefully they raise the price of mp3's and movies soon too. I'm so sick and tired of paying less than 5 dollars for a song. What i really want is a model that makes me pay a little bit more, because that is what the labels want anyway.
 

I don't think that happened, unless you mean the cell phone music services, where you paid $2.99 a track for the convenience of downloading to your phone, but I don't really think that counts as mobile was out of whack at that time. Amazon came along and sold the same tracks for $0.10 less each each than the price Apple had from the beginning. ($0.89 vs. $0.99)

I've never seen an analysis that showed Apple was losing money on iTunes.

Sure it did. Where's all the B&M music stores? Was $.99 the price the music industry set or the price Apple set?

I haven't ever seen proof that Amazon was losing money on it's eBook segment. They reportedly sold some best-sellers for under cost, but eBooks as a whole? Never seen it, so if you have some citation for the claim it would be helpful support for the argument.

 

So when the DoJ refers to "consumers" they are actually referring to a subset of consumers i.e. those who purchase new release best sellers.

 

To set up a book store you'd only need ten or so fiction books and ten or so non-fiction books because the rest is apparently irrelevant.

 

I now see where brick and mortar stores went wrong they were overstocked with irrelevant titles instead of only focussing on best sellers.

 

Like who needs choice anyway.

That's not a comparable product though, because the delivery method is very different. The cost of selling singles using physical medium makes it impractical to compete, but that's no reason to hamstring the new technology solution so that old technology can compete. I consider cost reductions because of advances in technology to be different from dumping - which is selling product below cost. When many of the B&Ms opened their own digital storefront, they were able to meet or beat Apple's pricing. Walmart sold for $0.88 a track last I recall. Amazon did $0.89, others had $0.99.

That said, the book market often doesn't reflect a similar reduction in price because of lower costs. Maybe there is something to this case, but I don't know. Before iBooks, I had been reading stories about Amazon paying 30% to publishers on best sellers, keeping 70% for themselves, those times are gone. Apple pays 70% to publishers, and taking their 30% cut.