or Connect
AppleInsider › Forums › General › General Discussion › Amazon exec says Apple's agency model was designed to hinder Kindle
New Posts  All Forums:Forum Nav:

Amazon exec says Apple's agency model was designed to hinder Kindle - Page 2

post #41 of 105
Quote:
Originally Posted by AppleInsider View Post

"We wanted to avoid losing most or all of their titles from our store," Gartinetti said of MacMillan.

 

Yeah, right.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #42 of 105
Quote:
Originally Posted by yousuck View Post

Apple freaks here are amazing when it comes to their unconditional love toward Apple. We're talking about Apple conspiring to charge more money to you and us. These people will ask Apple did you like it if Apple rapes their girl friend.

A newbie troll, but a troll none the less. Apple never set the price, the publishers did. Show me any proof that Apple set the prices even the publishers admit to setting set the prices. DOJ is way off base with this lawsuit.                                                         

Artificial intelligence is no match for natural stupidity.

 

"A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete...

Reply

Artificial intelligence is no match for natural stupidity.

 

"A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete...

Reply
post #43 of 105

And Amazon's deals are designed to destroy all its competitors. News at 11.

post #44 of 105
Quote:
Originally Posted by shahhet2 View Post

Experts can help me here, but am I thinking this right way?

Lets take one example.

There are two real estate brokers X and Y selling lots of homes named  1,2,3,4,5

X charges commission of $100 and says price of home 1 is $1000+$100 = $1100 to buyer (Consumer)

Y guarantees seller that he will get his $1000 but on condition that Y takes 30% profit and he has to change price to $1300 to buyer (Consumer)

Now Seller of home 1(to5) forces agent X to raise price of 1 to be $1300 as well else he will not list his home with X.

 

Is this analogy correct?

Aren't the consumer at loss here?

 

I am sorry if I thought this wrong way, may be end consumer will think wrong way like me and needs to corrected similarly.

Since the seller is making $1000 whether he uses X or Y, why would he force X to raise his price to $1300? 

 

But suppose the seller also has properties that he's trying to sell with other brokers, in the same area as the homes he has listed with X. By X selling at $1100, which is below market value, it will drive down the price of the other properties he's trying to sell. And his other brokers might stop listing his properties because they can't afford to make only $100 commission per sale. Soon only X will be listing properties in the area and he can raise his commission to $300. With the extra $200 coming out of the seller pocket as X will still be selling homes at $1100 and the seller won't have a choice but to use him. 

post #45 of 105

Amazon's wholesale discounting was built on Amazon's web dominance and designed and intended to hurt any-and-all potential competitors. This is akin to abusing a monopoly to exert leverage over another market niche. Selling product at a loss can never be justified by the government.

post #46 of 105
Quote:
Originally Posted by dasanman69 View Post

And how about all the music stores gone now because of iTunes?
Actually I thought all the big discounters - Walmart, Target, Best Buy, and (earlier) Circuit City - killed the music stores. iTunes is actually late to the party.

We've always been at war with Eastasia...

Reply

We've always been at war with Eastasia...

Reply
post #47 of 105
Quote:
Originally Posted by shahhet2 View Post

Amazon for sure is the reason for fall of big stores like Circuity City, Best Buy, CompUSA and many many more and all jobs related to that.  (By avoiding sales tax )
In my state, I still save tax on Amazon purchase but as far as I find price same, I prefer to buy from local store then giving all business to Amazon.
I hate Amazon in that regard. Maybe they would have done same thing to small book-sellers if Apple didn't joined the business.
So even if Apple did it right way or wrong way, I like it that way which avoids monopoly of one source.
They already had. They ran all but two major bookstores out of business and prevented any small ebook stores from forming until Apple got involved
post #48 of 105
Quote:
Originally Posted by shahhet2 View Post

Experts can help me here, but am I thinking this right way?

Lets take one example.

There are two real estate brokers X and Y selling lots of homes named  1,2,3,4,5

X charges commission of $100 and says price of home 1 is $1000+$100 = $1100 to buyer (Consumer)

Y guarantees seller that he will get his $1000 but on condition that Y takes 30% profit and he has to change price to $1300 to buyer (Consumer)

Now Seller of home 1(to5) forces agent X to raise price of 1 to be $1300 as well else he will not list his home with X.

 

Is this analogy correct?

Aren't the consumer at loss here?

 

I am sorry if I thought this wrong way, may be end consumer will think wrong way like me and needs to corrected similarly.

 

No, it's more like this:

 

Seller wants 1000 for his house. Broker X actually puts it on the market for 999 or less. Broker X waives all fees, and promises to pay the seller a dollar out of his own pocket when it sells. Turns out Broker X just wants to sell all the houses on the street as fast as possible, because his real game is to raise the value of his other properties in the neighbourhood, particularly commercial property, and those values are down because no-one lives there.

 

Seller is not happy because Broker X bought already bought the commercial property from the seller for a song, well under value, because Broker X convinced the Seller that the commercial property would never attract buyers and was not worth much. Broker X pulled this convincing presentation by taking over all marketing and PR for the property and keeping it out of the nicer magazines and listings -- "see, no interest in your property"

 

Now, Broker Y comes along and says, "hey Mr Seller, we also think your property is worth 1000, but we won't attempt to devalue it in order to pursue an agenda of our own. We aren't using you to manipulate the value of our other properties and transactions. We will showcase your property and build it up for what it is. It gets front page treatment. We have a glossy property magazine and great photographers, and will put your home in front of 500 million parties who get our magazine. We will take care of everything. What we ask is that you give us a 30% fee when your property actually sells. The selling price is up to you. If you really must receive 1000, then you must sell for a little higher because we cannot waive our fee; however, if you list the property with more than one broker, please work it so the asking price is the same or less at our agency, not more.

 

"The advantage of listing with us, is that you have these other houses (2- 5) that have variable values, each on its own merits, due to its architect, building materials, newness, grounds, placement on the street, etc. You will be able to price house 2 at 1200, house 3 at 1500 and so on, as a fair valuation would indicate. Broker X baulks at making any differentiation between your properties and he would be trying to get you to come down to standard pricing agreements, even if it means reducing his fee in the process. He can afford to do this, because he owns all the other property-related businesses in town (lawn maintenance, contractors, etc.), and he wants to become the only game in town; he wants to control the expectations around property transactions."

post #49 of 105
Quote:
Originally Posted by TheMacadvocate View Post

That's what I get for using Wikipedia as a source. :/

 

"In June 2010, Amazon released a "Kindle for Android" version. With the Google Android application release, versions for the Apple iPhone, the iPad, Windows and Mac computers, and BlackBerry cellphones are also available"

Guess you're retracting your previous statements?

post #50 of 105
Quote:
Originally Posted by charlituna View Post

no sheet sherlock. of course it was. But it doesn't equal Apple having anything to do with the publishers deciding they had a better deal and could lose Amazon without a fuss

 

Except you had that pesky Steve Jobs popping up telling the publishers what the price needed to be set at.

 

Apple will be found guilty and than the states will sue them.

post #51 of 105
Quote:
Originally Posted by Realistic View Post

A newbie troll, but a troll none the less. Apple never set the price, the publishers did. Show me any proof that Apple set the prices even the publishers admit to setting set the prices. DOJ is way off base with this lawsuit.                                                         

 

I guess you refuse to acknowledge those emails from that pesky Steve Jobs telling the publishers what priced needed to be.

 

Apple has dirty hands in this no doubt about it. Once they are found guilty the state will be suing then next.

post #52 of 105

Given the total inability of the DoJ to go after blatant and overt financial crime, they spend their time finding people to deport and now going after Apple to justify their paychecks.

post #53 of 105
I have been disappointed at the high price of ebooks. To me, a hard back book should cost more than a digital book. Because you don't have to pay to print it, you don't have to pay to ship it, and you don't have to pay for it to sit in air conditioned prime real estate for x months. After its been written and edited, you pretty much hit the publish button. As a consumer, shouldn't I expect to get some of the passed on savings? Not even all the savings. I really like Apple, but I don't like it if they told the publishers to bump up the cost. I know they've gone to app makers and told them to up the prices of their games, so I could see them doing this.
post #54 of 105
Quote:
Reidy testified that Grandinetti said, "If you're going to do this, we have to look at the whole business."
That's a hell of a "threat", CEO Reidy, actually frightening.
post #55 of 105
Quote:
Originally Posted by Victory2013 View Post

 

I guess you refuse to acknowledge those emails from that pesky Steve Jobs telling the publishers what priced needed to be.

 

Apple has dirty hands in this no doubt about it. Once they are found guilty the state will be suing then next.

 

Amazon was selling DISCOUNTED eBooks so what was the "normal" price before the discount was applied?

 

Could it possibly have been $12.99, $15.99, something based on the rrp of equivalent paperbacks?

 

Too bad for the DoJ that this hearsay evidence cannot be clarified.

 

Apple has done nothing wrong and will be exonerated, the DoJ smell funny because they can't tell shit from shinola, as can be seen by this farce of a lawsuit.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #56 of 105
Quote:
Originally Posted by daveinpublic View Post

I have been disappointed at the high price of ebooks. To me, a hard back book should cost more than a digital book. Because you don't have to pay to print it, you don't have to pay to ship it, and you don't have to pay for it to sit in air conditioned prime real estate for x months. After its been written and edited, you pretty much hit the publish button. As a consumer, shouldn't I expect to get some of the passed on savings? Not even all the savings. I really like Apple, but I don't like it if they told the publishers to bump up the cost. I know they've gone to app makers and told them to up the prices of their games, so I could see them doing this.

 

So how much should the author and an editor to clean up the work be paid?

 

Should they get less because there is no physical book.

 

What about marketing and promotion?

 

Seen any self published works on the best sellers list lately.

 

I'll bet it costs a lot to be noticed by the New York Times or show up on TV shows.

 

The physical cost of printed pieces of paper is a small part of the cost of publishing a book.

 

There is nothing to stop you from self publishing eBooks, in any store.

 

Good luck with getting noticed without a publisher.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #57 of 105
Quote:
Originally Posted by hill60 View Post

So how much should the author and an editor to clean up the work be paid?

Should they get less because there is no physical book.

What about marketing and promotion?

Seen any self published works on the best sellers list lately.

I'll bet it costs a lot to be noticed by the New York Times or show up on TV shows.

The physical cost of printed pieces of paper is a small part of the cost of publishing a book.

There is nothing to stop you from self publishing eBooks, in any store.

Good luck with getting noticed without a publisher.

The publishers have already decided that authors shouldn't be paid as well for an eBook, so yeah I guess they get paid less because there's no physical book. The authors are the ones being taken advantage of. By the way, poor MacMillan may be the worst of the big publishers in that regard. Yet you feel sorry for the publishers rather than the authors?
http://mediadecoder.blogs.nytimes.com/2009/10/28/macmillan-lowers-e-book-payments-for-authors/

And good luck with getting a publisher to pay attention to you as a new author anyway.
http://online.wsj.com/article/SB10001424052748703369704575461542987870022.html
Edited by Gatorguy - 6/6/13 at 5:48am
melior diabolus quem scies
Reply
melior diabolus quem scies
Reply
post #58 of 105
Quote:
Originally Posted by dasanman69 View Post


Amazon wasn't taking a commission on certain books, they were actually taking a loss but you pretty much got the gist of it.

What I'd like to know is what if there was no Amazon and Apple was first to market what prices would have Apple forced on the publishers? They didn't give the music industry the benefit of setting their own price and now we're supposed to believe Apple is concerned about the publishers and has their best interest in mind?

 

Your last part is kind of the funny thing and the true genius and deviousness of Apple.  If you listen to some of the comments here you'd think people believe Apple was on a mission to save publishers...

 

Amazon sells book at $9.99 with 2% margin....  effective price to publisher..... $9.99

Apple sells book at $12.99.  Takes extortionary 30% cut...   effective price to publisher $9.99

 

So Apple was not helping the publishers at all...  The genius of it is that in order to make the same money on iBooks that they did on the other platforms they would be force to raise their prices or take a huge loss.  The MFN clause ensured that that higher price would also have to be applied to other vendors...  So Amazon would now have to jack prices to $12.99- but they weren't guaranteed the 30% cut.  So Apples whole plan was to give the publishers nothing, but force all their competitors to subsidize the lack of profits publishers would make on iBooks.  Profits from iBooks would all go to Apple, profits from all the other stores would go to the publishers not the sellers.

 

Thats just friggin evil genius at work.

 

Should be an interesting trial.  I love Apples lawyers opening remarks/evidence.  'I was carefully involved in crafting these documents and you can clearly see they state that Apple has no interest in Amazons prices'  Meanwhile most of the conversation between publishers and Eddy cue revolve around the Amazon problem and how 'if it is going to work, they all need to be in this together'  Articles 20 and 29 are pretty damning IMO, because they show all the publisher relying on Eddy to get everyone on board.  'Eddy, marching orders from London, we won't sign on unless you get 3 other publishers to sign on'  Another publisher had a similar comment.  It shows they were all relying on Apple to orchestrate it so they could all jack prices at the same time without actually directly talking to one another.

 

Its devious, sleazy and unethical for sure.  Apple may just have good enough lawyers to argue that it wasn't illegal.

 

Either way it worked out well for consumers.  If Apple and the publishers had gotten away with it we'd all be paying higher prices.  Because the DOJ stepped in and the fact that ebooks are actually profitable more entrants have come to market and prices have actually come down.   The hillarity is added to because Apple is now trying to take credit for that.  

post #59 of 105
Quote:
Originally Posted by shahhet2 View Post

Experts can help me here, but am I thinking this right way?
Lets take one example.
There are two real estate brokers X and Y selling lots of homes named  1,2,3,4,5
X charges commission of $100 and says price of home 1 is $1000+$100 = $1100 to buyer (Consumer)
Y guarantees seller that he will get his $1000 but on condition that Y takes 30% profit and he has to change price to $1300 to buyer (Consumer)
Now Seller of home 1(to5) forces agent X to raise price of 1 to be $1300 as well else he will not list his home with X.

Is this analogy correct?
Aren't the consumer at loss here?

I am sorry if I thought this wrong way, may be end consumer will think wrong way like me and needs to corrected similarly.

No you are not thinking of it the right way. Look at the movie industry. To maximize profits movie companies will engage in a windowing strategy. First a movie will be released to theaters where prices are highest to see the movie. When demand withers the movie will be released to DVD through places like Blockbuster and pay on demand services, which pay a premium for its users to see the content. Thirty days later the movie makes its way to regular cable channels and places like Red Box. Eventually it goes to places like Netflix and Amazon streaming. The government has no problem with this.

The publishing industry tries to do the same thing. A book first is released on more pricey and profitable hardcover. Then after demand falls it gets released on softcover. Amazon was screwing up this model to the detriment of publishers, consumers who want hardcovers, and brick and morter retailors like Barnes and Noble (and now defunct Borders). Amazon required publishers to release E Books at the same time as the hardcovers. Amazon was allowed to set the price on the books, including the hardcovers it carried. It would encourage the sale of the ebooks over the hardcover books by sometimes selling the e books at a loss all while keeping the price of the hardcovers higher. Since Amazon is the biggest book publisher, this resulted in hard cover book sales falling. It killed the publisher's tiered profit model and e books are less profitable.

To redress this, publishers wanted to set the price every where, but especially for new releases. They wanted to make the same profit on both e books and hardcovers especially when books were first released.
post #60 of 105
Quote:
Originally Posted by dasanman69 View Post

But it's illegal for Amazon to slow down the competition? What hypocrisy

No one ever said that. NIce straw man.

It's not illegal to slow down the competition and no one said that it was. I was objecting to the argument that Apple was guilty because they tried to slow Amazon down. It's a specious argument - no matter how it is presented.
Quote:
Originally Posted by shahhet2 View Post

Apple is to blame there. I am not taking any sides, just saying the facts here.  (Did We really had music stores:) Maybe too long ago,  don't recall many big B&M music stores!!!)

Wrong. iTunes didn't put B&M music stores out of business. There were two factors involved:
1. Enormous rise of massive stores (Walmart, Target, Best Buy, Amazon) selling music in quantities that the B&M stores couldn't match. It's hard for a small retailer to compete with Walmart for ANY goods - which is why Walmart has decimated small retailers of virtually all products.

2. Piracy. At the time iTunes came into being, piracy was so common that it had an enormous impact on music revenues. With iTunes offering a way for people to buy single tracks for a reasonable price ($0.99 instead of having to pay $14.99 for an album where you only want one song), it took a big chunk out of piracy. So, to a large extent, iTunes helped to save the industry rather than killing it.
Quote:
Originally Posted by Victory2013 View Post

Except you had that pesky Steve Jobs popping up telling the publishers what the price needed to be set at.

Apple will be found guilty and than the states will sue them.

Only problem with that is that Apple didn't tell the publishers what the price needed to be set at. You apparently don't understand the agency model at all.

Sure, Jobs expressed the obvious statement that the publishers would like to get more money than they were getting, but that's so obvious that it's silly to even consider it in the context of price fixing.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #61 of 105

I would like to know if this is AI words or in fact these statement was made in court

 

 

Quote:
Under Amazon's wholesale pricing, retailers buy content from publishers in bulk and are able to set resale prices at or below cost.

 

 

If Amazon or the publisher are making statement about selling below costs, this is illegal, this is call dumping and predatory pricing, we all know Amazon is doing this as well as Walmart, however, they never come right out and say it.

 

Again i go back to the company who makes a product has every right to sell it for the price they want, and Publishers wishing not to allow Amazon to destroy their higher profit hard cover business is not a bad thing.

 

Everyone points to Apple and $.99 itunes, well the strategy actually worked for the music industry it turn around their loosing business, I believe they are now seeing more sales on music and less pirating, The books industries was heading down the same path, Amazon was killing their high margin hard bound business and people were pirating books on line.

post #62 of 105
Quote:
Originally Posted by Yojimbo007 View Post

It is all about profits..
Amazon wants to give things away and destroy everyone on the production side.
Apple says everyone needs to make a profit in the lineup..... And with a bit higher price everyone wins..
Not just the consumer.
Amazon has no regard for those who make a living producing things!

At the higher price only the retailer wins. The publishers are still only getting $10 per ebook the extra $2.99 goes solely to Apple.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #63 of 105
Quote:
Originally Posted by Maestro64 View Post

I would like to know if this is AI words or in fact these statement was made in court




If Amazon or the publisher are making statement about selling below costs, this is illegal, this is call dumping and predatory pricing, we all know Amazon is doing this as well as Walmart, however, they never come right out and say it.

Again i go back to the company who makes a product has every right to sell it for the price they want, and Publishers wishing not to allow Amazon to destroy their higher profit hard cover business is not a bad thing.

Everyone points to Apple and $.99 itunes, well the strategy actually worked for the music industry it turn around their loosing business, I believe they are now seeing more sales on music and less pirating, The books industries was heading down the same path, Amazon was killing their high margin hard bound business and people were pirating books on line.

Selling below cost is not illegal. Many retailers do it to clear out stock and as loss leaders.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #64 of 105
So let me think this through:

A new retailer of ebooks (Apple), with 0% share in that market, is about to launch a product (iPad) whose success is not guaranteed. They give publishers a contract with a MFN clause that they all hate and push back on. Apple sticks to its guns. Much like the record labels right now with iRadio, they can tell Apple to hit the road. Instead, they willingly sign the Apple contracts after many rounds of back and forth. Under the new contracts, even with a higher retail price for an ebook, they receive a lower net price (due to the 30% commission). They are now forced to take the Apple model to other retailers because if they do not, they might have to lower prices in iBooks depending on how an ebook is priced elsewhere, in which they would make even less money.

Now, Apple is under fire for introducing this model and working with publishers on its bookstore only and not requiring publishers move others to the same model. It was just trying to enter the market on its terms and so that it would be guaranteed some $ amount per ebook; they were looking at only their margins.

Meanwhile, before Apple begins its bookstore, you have Amazon with a dominant market share (90% ) pricing many, many ebooks below cost in order to develop its monopoly and prevent other entrants. As a retailer of publisher's physical book as well, it uses its pricing mechanisms to dictate terms and in many cases push consumers to an ebook version over a hardcover version. It is not hard to see the natural consequence of this: forcing publishers to sell it ebooks for even less so that is no longer loses money and threatening to drop physical books if its terms are not met... oh wait, they made that threat when a publisher wanted them to move to agency.

Now, even though average ebook prices went up for a short period to time, since then they are down, and there are other competitors (DOJ slide). Lastly, most publishers are back to the wholesale model, particularly with Amazon, and yet Amazon no longer prices all ebooks below $10 anymore; many are now a few dollars higher. Why don't they go back? Maybe they want to make some money after all? Maybe because originally when selling a Kindle for $300, they needed cheap ebooks; now they have cheap Kindles (or apps on other platforms) and decide to make some money on ebooks. The are looking at only their margins.
post #65 of 105
Quote:
Originally Posted by Suddenly Newton View Post

 

Nah. The principle here is "It's only evil when Apple does it."

 

No it's only Evil when Apple does it right and shames all the other players, especially those who have been at it longer without being able to figure it out on their own. 

post #66 of 105
Amazon were happy to make a loss on high profile day one releases as they were planning on this as one tactic to grow their kindle platform to try and get to a monopoly position for e-books.

This is the same as their web-store, they didn't make any money for years as they play the long game and want to own all internet sales and then control the market charging what they like.

In the short term the consumer might gain with Amazon's strategy, but long term the consumer will lose out and Amazon will be shown to be evil like google.
post #67 of 105
Quote:
Originally Posted by dasanman69 View Post

At the higher price only the retailer wins. The publishers are still only getting $10 per ebook the extra $2.99 goes solely to Apple.

In the short term, yes.

In the long term? With a near monopoly, do you think Amazon would continue to always have razor thin or negative margins? Instead of paying $9.99 to the publisher, they would be in a position to strongly negotiate it down lower.
post #68 of 105
Quote:
Originally Posted by Gatorguy View Post


The publishers have already decided that authors shouldn't be paid as well for an eBook, so yeah I guess they get paid less because there's no physical book. The authors are the ones being taken advantage of. By the way, poor MacMillan may be the worst of the big publishers in that regard. Yet you feel sorry for the publishers rather than the authors?
http://mediadecoder.blogs.nytimes.com/2009/10/28/macmillan-lowers-e-book-payments-for-authors/

And good luck with getting a publisher to pay attention to you as a new author anyway.
http://online.wsj.com/article/SB10001424052748703369704575461542987870022.html

 

I have no opinion one way or the other, I was outlining the costs involved in book publishing, including the most important part, getting works noticed so people buy them.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #69 of 105
Quote:
Originally Posted by Frood View Post

 

Your last part is kind of the funny thing and the true genius and deviousness of Apple.  If you listen to some of the comments here you'd think people believe Apple was on a mission to save publishers...

 

Amazon sells book at $9.99 with 2% margin....  effective price to publisher..... $9.99

Apple sells book at $12.99.  Takes extortionary 30% cut...   effective price to publisher $9.99

Uh, Amazon is known to have taken 70% cuts. Here for example: http://www.engadget.com/2009/05/07/amazon-takes-70-percent-of-kindle-newspaper-revenues/

 

The whole point of the wholesale model is for the Distributor to control supply and demand and dictate all kinds of terms -- if not the whole market. This is the world of Walmart and Amazon -- their mission is to demand lower and lower prices from their suppliers year on year, or the supplier finds himself cut off. Other stores can't compete, period. Amazon was reserving the right to dictate terms at its whim. That's devious.

 

Apple devious? The Agency Model only has two terms: we take 30% across the board, whatever it is, whatever you sell it for. Apple is asking its suppliers to please allow Apple to sell at same price of other stores if the supplier allows the competition to sell lower. End of story. No deviousness. As far as agency models go, 30% is actually on the low side. Flat rate, simple terms, always the same, no matter the price or perceived value of the product.

 

Apple believes it can ask for that MostFavoredNation clause because it has 500 million users with credit cards, etc. who love using Apple's great devices propelling them to the highest mobile browsing and ecommerce usage stats on the planet (as opposed to users of limited devices distributed only in the States displaying force-fed ads and making use of dubious and intrusive tactics designed to recoup the cost of the device and leading to uncomfortable relationships all round).

 

So, what's not to like? Sell a million copies on Amazon AND sell two million on iTunes at the same time, potentially netting up to 30% less on each of those extra two million sales from iTunes depending on Amazon's fee. Stops Amazon from pulling shananigans and trying to get the 70% on different things.


Edited by krabbelen - 6/6/13 at 7:22am
post #70 of 105
Quote:
Originally Posted by hill60 View Post

I have no opinion one way or the other, I was outlining the costs involved in book publishing, including the most important part, getting works noticed so people buy them.

If you're going to outline the costs why not put some numbers with it?
http://www.nytimes.com/2010/03/01/business/media/01ebooks.html?partner=rss&emc=rss&_r=0

As far as the wisdom of skipping over the publishers altogether you might have missed some of the recent best-sellers that were self-published. That's what the publishers should be addressing for self-preservation. They can't continue to "abuse their market position", 1wink.gif taking advantage of authors.
http://www.digitalbookworld.com/2013/self-published-ebooks-are-nos-1-and-2-best-sellers-average-price-drops-to-all-time-low/
melior diabolus quem scies
Reply
melior diabolus quem scies
Reply
post #71 of 105
Quote:
Originally Posted by Pendergast View Post

In the short term, yes.

In the long term? With a near monopoly, do you think Amazon would continue to always have razor thin or negative margins? Instead of paying $9.99 to the publisher, they would be in a position to strongly negotiate it down lower.

Isn't iTunes run as a break even business? And isn't Apple the dominant player? Have they risen the price of songs or negotiated even lower terms?
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #72 of 105
Quote:
Originally Posted by dasanman69 View Post

Isn't iTunes run as a break even business? And isn't Apple the dominant player? Have they risen the price of songs or negotiated even lower terms?

No. iTunes was initially a break-even business, but I believe they make money on it now.

Yes, Apple is the dominant player - but they don't have to resort to illegal behavior to stay there. Unlike Amazon.

Yes, the price of songs has changed over time - both up and down. Apple offers certain price points ($0.69, $0.99, $1.29, etc) and the copyright owner chooses the price to sell at (or not to sell at all, of course).

Quote:
Originally Posted by dasanman69 View Post

Selling below cost is not illegal. Many retailers do it to clear out stock and as loss leaders.

Selling below cost is not per se illegal. However, it can be illegal in some circumstances. Look up 'predatory pricing'.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #73 of 105
Quote:
Originally Posted by dasanman69 View Post

Isn't iTunes run as a break even business? And isn't Apple the dominant player? Have they risen the price of songs or negotiated even lower terms?

I believe The labels demanded higher prices on recent hits and allowed lower prices on old songs.
post #74 of 105
Quote:
Originally Posted by jungmark View Post

Let me get this straight: Amazon has razor thin margins on the kindle, offers the kindle app on iOS, and is crying foul when it has to offer ebooks at the same higher price as Apple?

FTFY

post #75 of 105
Quote:
Originally Posted by MacRulez View Post

FTFY

So amazon is whining because they are making more profit? And it doesn't have to be higher. If AZN was allowed to sell lower, Apple would match it too.
post #76 of 105

I am not flaming your logic - just asking a logical question(s) here  - DID not the publishers make their money on the WHOLESALE PRICE? could not the publiswrs raise the WHOLESALE price? if so the PUBLISHER GOT PAID FOR PRODUCT - even if amazon gave them away for free! the PUBLISER got paid the consumer gets what they bought or were given.

 

Sounds like IF APPLE had to compete to match amazons pricing - the publishers WOULD lose even more with APPLE taking 30%.  So as i see it - APPLE was in this to make its cut without hurting the publishers profit and the publishers would make more form the increased prices to what amazon now has to sell. 

 

At least thats how i see it - looking through the glass.

 

 

Quote:
Originally Posted by Yojimbo007 View Post

It is all about profits..
Amazon wants to give things away and destroy everyone on the production side.
Apple says everyone needs to make a profit in the lineup..... And with a bit higher price everyone wins..
Not just the consumer.
Amazon has no regard for those who make a living producing things!
post #77 of 105
Quote:
Originally Posted by holmstockd View Post

I am not flaming your logic - just asking a logical question(s) here  - DID not the publishers make their money on the WHOLESALE PRICE? could not the publiswrs raise the WHOLESALE price? if so the PUBLISHER GOT PAID FOR PRODUCT - even if amazon gave them away for free! the PUBLISER got paid the consumer gets what they bought or were given.

Sounds like IF APPLE had to compete to match amazons pricing - the publishers WOULD lose even more with APPLE taking 30%.  So as i see it - APPLE was in this to make its cut without hurting the publishers profit and the publishers would make more form the increased prices to what amazon now has to sell. 

At least thats how i see it - looking through the glass.


You got one part wrong. The publishers would not be making more money. They're making the same whether the ebook sells for $9.99 with Amazon or $12.99 with Apple.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #78 of 105

OK then maybe i am not fully in the loop - what was the PUBLISHER already making from the WHOLE sale price?

 

because bottom line if APPLE match amazon - the publishers would lose more money on the 30% take right?

post #79 of 105
Quote:
Originally Posted by Ronbo View Post

And Amazon's deals are designed to destroy all its competitors. News at 11.

Common business practice. Thanks for playing.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #80 of 105
Quote:
Originally Posted by holmstockd View Post

OK then maybe i am not fully in the loop - what was the PUBLISHER already making from the WHOLE sale price?

because bottom line if APPLE match amazon - the publishers would lose more money on the 30% take right?

Bingo, which was why they had to renegotiate their terms with Amazon because while they weren't losing money with Amazon they'd lose handsomely with the same price with Apple.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › Amazon exec says Apple's agency model was designed to hinder Kindle