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Amazon exec says Apple's agency model was designed to hinder Kindle - Page 3

post #81 of 105
Quote:
Originally Posted by dasanman69 View Post

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.

But they were losing Money. The ebooks were priced significantly lower than hard covers that people just didn't want to pay for them anymore.
post #82 of 105
Quote:
Originally Posted by jragosta View Post

Selling below cost is not per se illegal. However, it can be illegal in some circumstances. Look up 'predatory pricing'.

 

Just like how 'price fixing' is not per se illegal anymore, either.

 

Everything in context, and courts still have teeth to rule either illegal.

post #83 of 105
Quote:
Originally Posted by jungmark View Post


But they were losing Money. The ebooks were priced significantly lower than hard covers that people just didn't want to pay for them anymore.

 

Technically, that would be more of an indirect loss of potential revenue that simply saying "they were losing money". 

 

But yeah, they weren't happy.

 

Also, taking this to its logical conclusion, once they cornered the market, Amazon would likely be in a position to negotiate lower wholesale prices, so that they can actually make a profit too. Or they'd raise their prices to consumers in time. Businesses will operate at break-even or below-margin only for strategic short-term periods of time; otherwise it is not sustainable.

post #84 of 105
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.

 

You're telling a half truth. Selling below cost for the above reasons is legal. Consistently selling below cost for the purposes of running competitors out of business is not.

post #85 of 105
Quote:
Originally Posted by Pendergast View Post

Just like how 'price fixing' is not per se illegal anymore, either.

Everything in context, and courts still have teeth to rule either illegal.

True, but since there's still no evidence that Apple engaged in price fixing, it's a moot point.

OTOH, there's plenty of evidence that Amazon used their monopoly position to beat publishers into submission.
Quote:
Originally Posted by dasanman69 View Post

Common business practice. Thanks for playing.

It's a common business practice. However, it's illegal when you use a monopoly position to make deals to destroy your competition. You seem to have left that part out.
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post #86 of 105
Quote:
Originally Posted by Gatorguy View Post


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/

 

So what exactly IS the problem?

 

The price of eBooks has FALLEN dramatically since Apple entered the market, as can be easily seen in your links, in fact as your links show eBook prices are at RECORD LOWS due to Apple's free market model working exceptionally well and exactly as they predicted, from your link:-

 

"Driven in part by $0.99 titles capturing the top-two spots on the ebook best-seller list, the average price of a best-selling ebook hit a new low this week of $6.93, down from $7.43 last week and the previous all-time low of $7.21 two weeks ago."

 

The DoJ are f*cking insane.

 

Americans are f*cking insane if they swallow this shit, a diversion from their real problems which is basically in the same vein as these popular best selling books.


Edited by hill60 - 6/6/13 at 11:16am
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post #87 of 105
Quote:
Originally Posted by jungmark View Post


I believe The labels demanded higher prices on recent hits and allowed lower prices on old songs.

 

This is true. The labels allowed Amazon access to DRM free music, but forced Apple to remained locked down - at least until Apple caved on their 99 cent model and moved to a tiered pricing model.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #88 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.

 

 

 

No, because Amazon structured their contracts so that their 30% cut jumped to 70% if your eBook was priced too high.

 

The DoJ has no problems with this.

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post #89 of 105
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.

 

It's fine when you're dumping stock, or having a temporary sale on particular titles - this is done all the time. However, when you're in a monopoly position, selling at a loss to undercut competitors and keep others from entering the market, is illegal. Apple added the MFN clause, because they saw no point in entering a market where they couldn't make a profit due to Amazon's tactics.

 

 

By the way, The MFN clause does not force publishers to lower prices with other retailers, all it does is guarantee that Apple can lower their prices to meet competitors'.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #90 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.

 

The agency model allows the publishers to set whatever price they want...

 

Those emails expressed an opinion on what Steve thought a good average price should be (FOR HIS STORE). The publishers had the freedom to set whatever prices they wanted (FOR THEIR PRODUCT), however, Apple also set a pricing cap (FOR THEIR STORE) to make sure the publishers didn't try to gouge consumers.

 

There is nothing illegal about any of that.

 

The DOJ is trying to make sure that Apple didn't collude with the publishers to raise prices elsewhere. They are trying to use the MFN clause as its proof, which is asinine. That clause only guarantees if the publishers work out a better deal with a competitor, Apple has the right to lower THEIR prices to meet it. This makes sure Apple can always maintain a fair price for their customers. APPLE IS PROTECTING THEIR CUSTOMERS.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #91 of 105
Quote:
Originally Posted by jragosta View Post


True, but since there's still no evidence that Apple engaged in price fixing, it's a moot point.

 

No, in the allegation, it would be the publishers who supposedly engaged in price fixing, not Apple. Even then, the issue would be collusion, which is one of the things that can cause 'price fixing' to become illegal.

 

Apple is just getting dragged along, accused of being a party to said alleged collusion. 

 

Of note, 'price fixing' can also be illegal if caused by undo pressure by a retailer forcing the manufacturer's hand, although I would imagine this would be the case mainly when said retailer is in a strong market position. Which Apple wasn't, considering they were just entering the market.

 

 

This whole thing is asinine, considering that before Apple, Amazon had an effective monopoly on ebook sales (which is never good in the long run), and Apple's entrance (while potentially causing the raising of some prices) ended up causing a more balanced market. Interestingly, the average price of ebooks has gone down since then. No kidding.

post #92 of 105
It is an e-Book there is no wholesale volume discount - they are not moving a physical product - Amazon was raping the publishers and not allowing anyone else into the e-Book space -
post #93 of 105

You are all looking at it wrong - it takes no additional cost to make the second copy of an e-Book - It is not like a hard back book or 100lbs of fruit - it is an e-Book. Amazon was keeping it so no one else could get into e-Books. There is no wholesale pricing or volume discounts on a digital copy of a book. 

post #94 of 105
Quote:
Originally Posted by Wizardddd View Post

It is an e-Book there is no wholesale volume discount - they are not moving a physical product - Amazon was raping the publishers and not allowing anyone else into the e-Book space -

Making it hard to compete does not equate not allowing anyone else into the market. B&N and Sony's ebook store have been around for quite some time with Sony's predating Amazon's.
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post #95 of 105
It's a bit difficult to swallow all this whining by an Amazon executive. At the time of Apple's alleged crime, Amazon owned 90% of the ebook market in the U.S. and was selling many ebooks belong their cost to crush competitors. Now their market share is in the 70% range, still too high for a healthy competitive market but better. Not dominating the market is what has Amazon hot and bothered.

Apple's problem isn't an excess of zeal or any effort to dominate the ebook market by any means necessary. At the executive level there seems to be an indifference that translates into too little effort being devoted to the iBookstore. Apple is giving Amazon some healthy competition. My latest ebook looks far better in iBooks than its equivalent does in Amazon's Kindle app. But it's not doing as much as it ought and it's certainly not the Great Satan of the DOJ and many in the media.

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post #96 of 105
Quote:
Originally Posted by dasanman69 View Post

Making it hard to compete does not equate not allowing anyone else into the market. B&N and Sony's ebook store have been around for quite some time with Sony's predating Amazon's.

Yet Amazon had something like 90% of the eBook market. When you combine that with the threats and tantrums thrown by Amazon, it looks pretty suspicious.
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post #97 of 105
"Shanks also noted that Amazon would routinely price new titles at $9.99 through its Kindle store, when the same book would sell for $26 as a hardcover. Wholesale pricing was cannibalizing profitable hardcover sales, he said." The ENTIRE struggle is between the booksellers and Amazon. The booksellers don't want digital to replace profits of hard copies -- but that's the future. Apple adopted the agency model because they mostly care about being the provider of the device. Amazon wants to undercut the book publishers and become the distributor -- just like the WalMart tactic of squeezing the suppliers. Margins on books are going to come down eventually -- but the battle right now is between Amazon and everyone else. Apple being part of "price fixing" is a load of crap as far as I can tell -- they've got no advantage having higher prices than Amazon. The "kindle" has been hindered by being ONLy an e-book reader and second class to Samsung -- and very third rate to an iPad. The "Fire" is a pretty good device -- if you've never seen an iPad. Amazon is just riding this trend of making Apple the fall guy -- apparently they should have spent less money developing and more buying up congressmen. And I'm sure Forbes magazine has an article about this -- they seem more devoted to Apple saucing than anything else these days.
post #98 of 105
Quote:
Originally Posted by jragosta View Post


Yet Amazon had something like 90% of the eBook market. When you combine that with the threats and tantrums thrown by Amazon, it looks pretty suspicious.

 

Yes, but 90% is merely an inconvenient fact. Screams of "price fixing" merely need to find the ears of well greased palms for a verdict and the media will dutifully echo whatever the conventional wisdom utters -- without doing any math that would spoil the fun. *sigh* I just don't know how this price fixing nonsense even has legs --- it's as if everyone screamed about Apple using FoxConn and didn't notice EVERYONE uses FoxConn and Apple was about the only company trying to improve conditions. I'm not holding Apple blameless for being a soul-less greedy corporation, but they seem a bit more lifelike than the rest of the zombies who seem above reproach.
post #99 of 105
So true -- Apple was if anything a victim of the Agency Model. They'd sell an eBook for $.99 if they could. They probably expediently went along with it because they had to play catchup with Amazon's domination in the market. Yes, it could be "collusion" but more likely it was extortion. Yet who can blame the publishers who are getting squeezed out -- nobody really needs their services anymore if you look at it.
post #100 of 105
Quote:
Originally Posted by jragosta View Post

Yet Amazon had something like 90% of the eBook market. When you combine that with the threats and tantrums thrown by Amazon, it looks pretty suspicious.

How about the threats and tantrums thrown by the publishers? That's not suspicious?

Being the most popular does not a monopoly make. Sony's ebook store existed a year before Amazon's and shortly after B&N's store. The consumers chose with their wallets, and the vast majority chose Amazon.
Edited by dasanman69 - 6/6/13 at 7:12pm
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post #101 of 105
Quote:
Originally Posted by Fake_William_Shatner View Post

 

Yes, but 90% is merely an inconvenient fact. Screams of "price fixing" merely need to find the ears of well greased palms for a verdict and the media will dutifully echo whatever the conventional wisdom utters -- without doing any math that would spoil the fun. *sigh* I just don't know how this price fixing nonsense even has legs --- it's as if everyone screamed about Apple using FoxConn and didn't notice EVERYONE uses FoxConn and Apple was about the only company trying to improve conditions. I'm not holding Apple blameless for being a soul-less greedy corporation, but they seem a bit more lifelike than the rest of the zombies who seem above reproach.

 

I wish the judge would hurry up and find Apple guilty as she said she was going to do, so Apple can move this travesty into the Supreme Court on appeal.

 

That's when this mess will get sorted out.

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post #102 of 105
Quote:
Originally Posted by dasanman69 View Post

How about the threats and tantrums thrown by the publishers? That's not suspicious?

Being the most popular does not a monopoly make. Sony's ebook store existed a year before Amazon's and shortly after B&N's store. The consumers chose with their wallets, and the vast majority chose Amazon.

Yes but undercutting your competitors where no one can make a profit is illegal.
post #103 of 105
Quote:
Originally Posted by jungmark View Post

Yes but undercutting your competitors where no one can make a profit is illegal.

It obviously is either not happening or it's not illegal.
"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
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #104 of 105
Quote:
Originally Posted by Frood View Post

 

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

 

 

if Apple sells at $12.99 and takes a 30% cut it would be $3.90, leaving the publisher with only $9.09, not $9.99

post #105 of 105
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.
Haters... So sad. Just like the App store, the publisher sets the price. Not Apple. If the set the price to zero Apple is fine with that too. The key is it is the publisher or owner that determines the price. In a sense the previous model should be considered collusion if any thing. Amazon setup exclusive contracts with the same wholesale price from each major publisher.
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