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.
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.
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.
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.
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.
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.
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.
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?
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.
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.
Not a good sign though when Apple's general counsel calls Steve Jobs "incredibly stupid" in an email for a comment he made publicly about pricing.
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
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.
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.
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?
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).
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?
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.
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
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!
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.
Comments
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.
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.
Selling below cost is not illegal. Many retailers do it to clear out stock and as loss leaders.
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.
Quote:
Originally Posted by Suddenly Newton
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.
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.
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.
Quote:
Originally Posted by Gatorguy
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.
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.
Not a good sign though when Apple's general counsel calls Steve Jobs "incredibly stupid" in an email for a comment he made publicly about pricing.
Quote:
Originally Posted by Frood
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.
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",
http://www.digitalbookworld.com/2013/self-published-ebooks-are-nos-1-and-2-best-sellers-average-price-drops-to-all-time-low/
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).
Selling below cost is not per se illegal. However, it can be illegal in some circumstances. Look up 'predatory pricing'.
I believe The labels demanded higher prices on recent hits and allowed lower prices on old songs.
Quote:
Originally Posted by jungmark
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
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.
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
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!
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.
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?
Common business practice. Thanks for playing.