When does the agent control the price. If it is my book, I want to sell it at a profitable level. Allowing Amazon to sell below market and destroy my hard cover sales is unfair. As publisher, I think I can say sell it for x or no books for you.
What you're describing was illegal per se (in all cases) for decades. In 2007 the Supreme Court ruled that price fixing is not illegal per se, and that it depends on the circumstances.
For instance, it's not illegal (most likely) if Manufacture A tells Reseller B that they can't sell their product for less that $XX.xx in order to protect against intrabrand competition and foster interbrand competition. The rationale being that if consumers don't like it, they can go to another brand.
It is still potentially illegal if Manufacturer A has a product that is hard to find a comparable competing brand, or if Manufacturer A makes a deal with Manufacturers B-D to all set their prices at a certain level (collusion).
I'm guessing the same principles apply to digital content. Not sure how it works with the agency model, but it seems essentially the same.
No one in the publishing world thinks Amazon is a victim here. This is just DOJ's BS and waste of tax dollars. I'm glad to see Apple putting up the fight against this nonsense.
IF anything at all, the outcome will only prove these publisher CEOs were guilty as charged. Apple only provided a platform for them as an excuse to team-up against Amazon. The guilt is with these CEOs. Amazon's low-ball pricing practices basically forces these CEOs in a position to doing something, anything to stop their loses. If only one or two publishers changed to agency model, it wouldn't have the impact to affect Amazon. This is competition. The kind of stuff politicians argues for in a "free market".
The way I see this, DOJ is wasting resources here. I'm still waiting for wall street and greedy bankers put away behind bars.
I think Amazon would have been looked at for monopolistic behavior for selling books at or below cost to drown the smaller competition had Apple not jumped into the mix. But now there is real competition.
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.
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.
[quote] name="starbird73 url="/t/157880/amazon-exec-says-apples-agency-model-was-designed-to-hinder-kindle#post_2339604"] Actually, if you remember, all songs were 99¢ and albums were $9.99. Record labels wanted to charge the same as they did for CDs. Apple wanted realistic prices.
When it came to books, all Apple did was say, "What ever the lowest price [B]you[/B], the publisher, set the price at is what we have it at. At no point was Apple setting the price.[/quote]
And how did Apple get the 'realistic price' for albums?
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.
And how about all the music stores gone now because of iTunes?
And how about all the music stores gone now because of iTunes?
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!!!)
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.
Once Amazon owned the market, how long do you think they'd keep their razor margins or lose money on best sellers?
Would you rather Amazon have a near monopoly? Because that's where things were headed.
On the surface nothing being done is illegal. It's not illegal to adopt agency pricing. It's not illegal for the publisher to set minimum retail pricing. It's not illegal to get a favored nation clause.
What would potentially make it illegal is how the agreements came into being. If Apple et al got together and worked it out between all the parties. Or if the publishers got together and worked it out amongst themselves. But, If Apple worked out individual agreements, without the colusion, it should be legal.
The publishers settling prior to trial could be a result of the colluding separately from Apple. Something like... You gonna do it? I'll do it if you do it. Well, I'll do it if he does. And they all did it.
Hence publishers pleaded guilty. DOJ is just dragging everyone out to play along against Apple to squeeze a few more dollars out of them. As if that tax return BS wasn't enough of a show from our politicians. The way I see it, Apple can easily prove their point by stopping all sales of consumer ebooks for a year or require all sales of ebooks be created with iBook Author. Problem solved.
Let's see how much more these same publishers will go back to crying again. Less buying options, more power to Amazon again...and they are the victim how???
Simply unbelievable. Amazon engaged in predatory pricing, plain and simple. From the Wikipedia article on predatory pricing:
"In business and economics, predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a de facto monopoly."
Many small retailers and even online book sellers have complained about Amazon's predatory pricing. Amazon sells books at a loss to gain market share and exclude competition. Amazon sold it's first book in 1995 and didn't post a profit until 2001. How many competitors could loose money for 6 years and still stay in business?
Selling products below cost, if sustained, and used to corner a market is called "dumping" and at least in the U.S. is an anti-trust violation. In fact, just yesterday France's cultural Minister accused Amazon of dumping and being a "quasi-monopoly", and called it a "destroyer of bookshops".
Yes, it is absolutely true at in the short term Apple's actions caused e-book prices to rise. And that hurts the consumer. But they rose to their fair market value. And in a open competitive market, eventually competition drives prices down again. 200 years of capitalism has proven it time and again.
I really hope Apple accuses Amazon of dumping and predatory pricing. The publishers in this case are testifying to the power (without Apple) that Amazon commands in the publishing market to force publishers into unfavorable terms. Amazon was using e-book pricing (selling at a loss) to push Kindle into the market and exclude other e-book competitors who do not have the financial power of Amazon to receive in-kind wholesale pricing.
It's a travesty of justice. The company in the DOJ's crosshairs should be Amazon, not Apple.
"I'd lay my head on the railroad tracks and wait for the double-E but the rail road don't run no more poor, poor, pitiful me Lord, have mercy on me woe is me"
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!
... So case doesn't makes sense. But in reality do people really buys hardcover books? How many percentage of hard cover vs digital as of now?
As end consumer, anyone would always go for lower price for exactly same digital item.
So a family of four goes to a new movie at a local theater, cost for the evening - $70, including refreshments. Compare with, a family of four stays home and rents a movie online, cost, $15, including refreshments from their cupboards. Same item, same content owner, different venue/format.
So I ask you - does the owner of the content have a right to decide how the content is distributed? Does the owner of the content decide how long after the theatrical release the movie is available as a rental, as a DVD? Does the owner of the content have a right to cleverly maximize profits in whatever why they can according to what the market will bear, even if that means a consumer has to wait for a digital rental? Is a digital rental of a new release on the same day as a theatrical release a right that the government should protect because its cheaper for the consumer?
{As a disclaimer, when it comes to books, which I value immensely, I buy hard covers of a few choice titles, a buy paperbacks of others, I buy used paperback copies of others, and some I buy as ebooks. It depends on the title and whether I want to spend a lot of time with it, use it as a reference, use it as a gift, take it traveling, etc etc.}
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
I think Amazon would have been looked at for monopolistic behavior for selling books at or below cost to drown the smaller competition had Apple not jumped into the mix. But now there is real competition.
Certainly if they are going to try to dump on Apple for the favored nation clause they need to look at Amazon's deals which had the same clause
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.
anti trust is not just about consumers, it's about competitors too. Broker X has 90% of the market and charges only $10 per sale. How can broker Y or any other broker compete with that?
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.
Almost had a point until you used "rape". A lot of us are stockholders too.
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.
I think a more appropriate analogy would be:
A farmer sells his apples in bulk to retailers.
Retailer X (Amazon), buys this fruit in bulk for $1000 per 1000 lbs, then turns around and sells it for 95 cents per lb (taking a loss of $50 per 1000 lbs), but they are getting people into their store to buy other stuff.
Retailer Y (Apple), takes shipment of fruit from buyer, allowing them to set their own price, but taking a 30% commission on the sale, setting the price at $1.42 lb (70% of $1.42 is $1)
This does raise the price to the consumer and creates a profit to all involved in the process, rather than taking a loss in the hopes of selling other products.
This analogy does not work entirely, as the idea behind the publishers view, is that Amazon was selling books at a discounted price at the same time as the hardcover release, taking away would be buyers and additional profit to them.
Yes, the price goes up to consumers, but Amazon is creating a unnatural low price to consumers by taking a loss. That is certainly their right, but it also effectively boxes out the competition that are unwilling to take a loss selling books below cost, and screws those who actually produce a product. Look at all the PC manufacturers selling their computers for pennies, but making no profit. 10x the work than apple in volume, but 10x less profit. The question is, is that a sustainable practice and what are the trade offs. Amazon has been in business for a while and treated like a champion of industry, yet they make no money. Q4 2012, they earned $97 million on ~22 BILLION in revenue. That means they earned 0.0044 cents of profit per dollar of revenue. in March 2013, Apple reported $9.5 BILLION in profits on $43.6 BILLION of revenue, earning 0.2178 cents profit per dollar revenue. Can Amazon continue to practice its operations making no money?
And how about all the music stores gone now because of iTunes?
Wrong. All the smaller music store are gone because they couldn't compete with the likes of big B&M like Walmart, Target, Best Buy and Costco. And of course online Amazon. These big retailers were selling CDs as lost leaders to drive customers into their stores. These store could make up the lost of selling cheap CDs by the sales of other high profit items that they sell in their stores
How can you possibly say that iTunes was responsible for the demise of small music stores when iTunes only accounted for less than 10% of music sales when most these stores went under. Including the bigger Tower Records. It's only been since last year that digital downloads began surpassing physical CD's.
And how did Apple get the 'realistic price' for albums?
I believe $9.99 was about the average the music label made per CD (that sold from $12.99 to $16.99 retail) after deducting the cost of pressing, packaging, shipping, storing and returns of a physical CD. So the music label was making the same amount by selling a digital CD for $9.99. Anything above that would be look as getting greedy because most consumers already thinks that it cost next to nothing to sell a digital download.
Edit- Now that think about it, the $9.99 is what is split between the retailer and music label. So when Apple take their cut from the $9.99, the music label will be making about the same amount.
Comments
What you're describing was illegal per se (in all cases) for decades. In 2007 the Supreme Court ruled that price fixing is not illegal per se, and that it depends on the circumstances.
For instance, it's not illegal (most likely) if Manufacture A tells Reseller B that they can't sell their product for less that $XX.xx in order to protect against intrabrand competition and foster interbrand competition. The rationale being that if consumers don't like it, they can go to another brand.
It is still potentially illegal if Manufacturer A has a product that is hard to find a comparable competing brand, or if Manufacturer A makes a deal with Manufacturers B-D to all set their prices at a certain level (collusion).
I'm guessing the same principles apply to digital content. Not sure how it works with the agency model, but it seems essentially the same.
No one in the publishing world thinks Amazon is a victim here. This is just DOJ's BS and waste of tax dollars. I'm glad to see Apple putting up the fight against this nonsense.
IF anything at all, the outcome will only prove these publisher CEOs were guilty as charged. Apple only provided a platform for them as an excuse to team-up against Amazon. The guilt is with these CEOs. Amazon's low-ball pricing practices basically forces these CEOs in a position to doing something, anything to stop their loses. If only one or two publishers changed to agency model, it wouldn't have the impact to affect Amazon. This is competition. The kind of stuff politicians argues for in a "free market".
The way I see this, DOJ is wasting resources here. I'm still waiting for wall street and greedy bankers put away behind bars.
Quote:
Originally Posted by CustomTB
I think Amazon would have been looked at for monopolistic behavior for selling books at or below cost to drown the smaller competition had Apple not jumped into the mix. But now there is real competition.
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.
Actually, if you remember, all songs were 99¢ and albums were $9.99. Record labels wanted to charge the same as they did for CDs. Apple wanted realistic prices.
When it came to books, all Apple did was say, "What ever the lowest price [B]you[/B], the publisher, set the price at is what we have it at. At no point was Apple setting the price.[/quote]
And how did Apple get the 'realistic price' for albums?
And how about all the music stores gone now because of iTunes?
Quote:
Originally Posted by dasanman69
And how about all the music stores gone now because of iTunes?
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!!!)
Once Amazon owned the market, how long do you think they'd keep their razor margins or lose money on best sellers?
Would you rather Amazon have a near monopoly? Because that's where things were headed.
Quote:
Originally Posted by CustomTB
On the surface nothing being done is illegal. It's not illegal to adopt agency pricing. It's not illegal for the publisher to set minimum retail pricing. It's not illegal to get a favored nation clause.
What would potentially make it illegal is how the agreements came into being. If Apple et al got together and worked it out between all the parties. Or if the publishers got together and worked it out amongst themselves. But, If Apple worked out individual agreements, without the colusion, it should be legal.
The publishers settling prior to trial could be a result of the colluding separately from Apple. Something like... You gonna do it? I'll do it if you do it. Well, I'll do it if he does. And they all did it.
Hence publishers pleaded guilty. DOJ is just dragging everyone out to play along against Apple to squeeze a few more dollars out of them. As if that tax return BS wasn't enough of a show from our politicians. The way I see it, Apple can easily prove their point by stopping all sales of consumer ebooks for a year or require all sales of ebooks be created with iBook Author. Problem solved.
Let's see how much more these same publishers will go back to crying again. Less buying options, more power to Amazon again...and they are the victim how???
"In business and economics, predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a de facto monopoly."
Many small retailers and even online book sellers have complained about Amazon's predatory pricing. Amazon sells books at a loss to gain market share and exclude competition. Amazon sold it's first book in 1995 and didn't post a profit until 2001. How many competitors could loose money for 6 years and still stay in business?
Selling products below cost, if sustained, and used to corner a market is called "dumping" and at least in the U.S. is an anti-trust violation. In fact, just yesterday France's cultural Minister accused Amazon of dumping and being a "quasi-monopoly", and called it a "destroyer of bookshops".
http://www.ft.com/cms/s/0/213fc8ce-cc9d-11e2-9cf7-00144feab7de.html#axzz2VP4O244t
Yes, it is absolutely true at in the short term Apple's actions caused e-book prices to rise. And that hurts the consumer. But they rose to their fair market value. And in a open competitive market, eventually competition drives prices down again. 200 years of capitalism has proven it time and again.
I really hope Apple accuses Amazon of dumping and predatory pricing. The publishers in this case are testifying to the power (without Apple) that Amazon commands in the publishing market to force publishers into unfavorable terms. Amazon was using e-book pricing (selling at a loss) to push Kindle into the market and exclude other e-book competitors who do not have the financial power of Amazon to receive in-kind wholesale pricing.
It's a travesty of justice. The company in the DOJ's crosshairs should be Amazon, not Apple.
and wait for the double-E
but the rail road don't run no more
poor, poor, pitiful me
Lord, have mercy on me
woe is me"
said Russell Grandinetti
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!
Quote:
Originally Posted by shahhet2
... So case doesn't makes sense. But in reality do people really buys hardcover books? How many percentage of hard cover vs digital as of now?
As end consumer, anyone would always go for lower price for exactly same digital item.
So a family of four goes to a new movie at a local theater, cost for the evening - $70, including refreshments. Compare with, a family of four stays home and rents a movie online, cost, $15, including refreshments from their cupboards. Same item, same content owner, different venue/format.
So I ask you - does the owner of the content have a right to decide how the content is distributed? Does the owner of the content decide how long after the theatrical release the movie is available as a rental, as a DVD? Does the owner of the content have a right to cleverly maximize profits in whatever why they can according to what the market will bear, even if that means a consumer has to wait for a digital rental? Is a digital rental of a new release on the same day as a theatrical release a right that the government should protect because its cheaper for the consumer?
{As a disclaimer, when it comes to books, which I value immensely, I buy hard covers of a few choice titles, a buy paperbacks of others, I buy used paperback copies of others, and some I buy as ebooks. It depends on the title and whether I want to spend a lot of time with it, use it as a reference, use it as a gift, take it traveling, etc etc.}
Quote:
Originally Posted by dasanman69
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?
Possibly the same they are now. Publishers don't have fully free reign with Apple. there are limits.
Quote:
Originally Posted by CustomTB
I think Amazon would have been looked at for monopolistic behavior for selling books at or below cost to drown the smaller competition had Apple not jumped into the mix. But now there is real competition.
Certainly if they are going to try to dump on Apple for the favored nation clause they need to look at Amazon's deals which had the same clause
anti trust is not just about consumers, it's about competitors too. Broker X has 90% of the market and charges only $10 per sale. How can broker Y or any other broker compete with that?
Almost had a point until you used "rape". A lot of us are stockholders too.
Quote:
Originally Posted by shahhet2
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.
I think a more appropriate analogy would be:
A farmer sells his apples in bulk to retailers.
Retailer X (Amazon), buys this fruit in bulk for $1000 per 1000 lbs, then turns around and sells it for 95 cents per lb (taking a loss of $50 per 1000 lbs), but they are getting people into their store to buy other stuff.
Retailer Y (Apple), takes shipment of fruit from buyer, allowing them to set their own price, but taking a 30% commission on the sale, setting the price at $1.42 lb (70% of $1.42 is $1)
This does raise the price to the consumer and creates a profit to all involved in the process, rather than taking a loss in the hopes of selling other products.
This analogy does not work entirely, as the idea behind the publishers view, is that Amazon was selling books at a discounted price at the same time as the hardcover release, taking away would be buyers and additional profit to them.
Yes, the price goes up to consumers, but Amazon is creating a unnatural low price to consumers by taking a loss. That is certainly their right, but it also effectively boxes out the competition that are unwilling to take a loss selling books below cost, and screws those who actually produce a product. Look at all the PC manufacturers selling their computers for pennies, but making no profit. 10x the work than apple in volume, but 10x less profit. The question is, is that a sustainable practice and what are the trade offs. Amazon has been in business for a while and treated like a champion of industry, yet they make no money. Q4 2012, they earned $97 million on ~22 BILLION in revenue. That means they earned 0.0044 cents of profit per dollar of revenue. in March 2013, Apple reported $9.5 BILLION in profits on $43.6 BILLION of revenue, earning 0.2178 cents profit per dollar revenue. Can Amazon continue to practice its operations making no money?
Quote:
Originally Posted by dasanman69
And how about all the music stores gone now because of iTunes?
Wrong. All the smaller music store are gone because they couldn't compete with the likes of big B&M like Walmart, Target, Best Buy and Costco. And of course online Amazon. These big retailers were selling CDs as lost leaders to drive customers into their stores. These store could make up the lost of selling cheap CDs by the sales of other high profit items that they sell in their stores
How can you possibly say that iTunes was responsible for the demise of small music stores when iTunes only accounted for less than 10% of music sales when most these stores went under. Including the bigger Tower Records. It's only been since last year that digital downloads began surpassing physical CD's.
Quote:
Originally Posted by dasanman69
And how did Apple get the 'realistic price' for albums?
I believe $9.99 was about the average the music label made per CD (that sold from $12.99 to $16.99 retail) after deducting the cost of pressing, packaging, shipping, storing and returns of a physical CD. So the music label was making the same amount by selling a digital CD for $9.99. Anything above that would be look as getting greedy because most consumers already thinks that it cost next to nothing to sell a digital download.
Edit- Now that think about it, the $9.99 is what is split between the retailer and music label. So when Apple take their cut from the $9.99, the music label will be making about the same amount.