With Apple's hands tied in e-book market, Amazon stops taking some preorders from publisher Hachette

Posted:
in General Discussion edited June 2014
Amazon is currently in the midst of a fight with Hachette, one of the so-called "Big Five" largest publishing companies, and has stopped taking preorders for high-profile upcoming titles, including the latest from "Harry Potter" series author J.K. Rowling.




The market dominating book seller on Thursday began refusing preorders for several upcoming Hachette titles including Rowling's latest, "The Silkworm," written under the pseudonym Robert Galbraith. The latest moves by Amazon, detailed by The New York Times, come as the retailer is involved in ongoing negotiations with Hachette, which is the smallest of the top five publishers.

Hachette has also seen higher prices on physical books, slower shipping times, much cheaper prices via the Kindle platform, and recommendations for alternative titles in their Amazon listings. The moves are widely believed to be designed to discourage sales of physical books sold by Hachette.

In addition, Amazon is also at odds with Bonnier, a major international publisher, by delaying deliveries of its titles in Germany.

Industry watchers believe Amazon is using its power to frustrate writers, hoping they will help pressure publishers like Hachette and Bonnier to give a more favorable --?and profitable --?contract to the online mega-retailer. Amazon is facing its own pressure from investors, who want to see the company's razor-thin margins improve.

All of this comes after the U.S. government sided with Amazon and punished Apple for its own moves in the e-book market with the launch of iBooks. Last year, the government successfully sued Apple in an antitrust trial, as a judge ruled that the iPad maker was guilty of conspiring with book publishers to raise e-book prices, and as a result hurt consumers.

Summation
Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court


Apple led the charge in convincing publishers to switch to a so-called "agency" pricing model. That prevented content owners from being able to sell the same titles at a lower price elsewhere, without offering the same price on Apple's iBooks platform -- a "most favored nations" clause.

In contrast, the e-book industry prior to the launch of the first iPad was under the "wholesale model" preferred by market leader Amazon. In that model, resellers such as Amazon had the power to set prices, selling titles at or below cost if they chose to do so.

As part of the ruling against Apple, the company was saddled with an injunction barring the company from entering into any unsavory deals with publishers. Antitrust watchdog Michael Bromwich was also assigned to keep an eye on Apple. Bromwich and Apple have butted heads since he was installed last October.

Apple has formally appealed the antitrust ruling, asking for either a dismissal of the verdict or a complete retrial. Apple continues to believe that the iBookstore and iPad created competition in the e-book space, where Amazon's Kindle platform controlled some 90 percent of the market as of 2009.
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Comments

  • Reply 1 of 82
    bighypebighype Posts: 148member
    Interesting how government is not going against the real monopoly in the book/ebook market: the Amazon store.

    Are Amazon lobbyists paying better than Apple's? Apple is still a giant neophyte in the lobby area. Google and Amazon have strong lobbies in Washington, Apple has a small one. And it shows. Google is a monopoly in search and government is not going after them. Amazon is a monopoly in online sales and books, and government is not going after them either.

    Time for T.Diddy to wake up and hire some real lobbyists and start defending Apple from government goons.
  • Reply 2 of 82
    suddenly newtonsuddenly newton Posts: 13,715member
    The Times needs to leave St. Bezos alone.
  • Reply 3 of 82
    SpamSandwichSpamSandwich Posts: 29,485member
    A publisher could always drop Amazon and give Apple the exclusive...just thinking out loud here.
  • Reply 4 of 82
    tallest skiltallest skil Posts: 43,315member
    Originally Posted by SpamSandwich View Post

    A publisher could always drop Amazon and give Apple the exclusive...just thinking out loud here.



    DoJ then sues Apple, forcing them to nullify the deal.

  • Reply 5 of 82
    anantksundaramanantksundaram Posts: 18,583member

    Heh heh. Predictable (although, I would not have expected it so soon).

     

    These fools -- including a whole bunch of authors as well as Amazon users, Cote, Bromwich, and the US DoJ -- are simply reaping what they sowed.

  • Reply 6 of 82
    john.bjohn.b Posts: 2,714member

    Only the current DoJ would use anti-trust law to grant a de facto monopoly to Amazon.  And, of course, this is how Amazon behaves as a result.

  • Reply 7 of 82
    snovasnova Posts: 1,281member

    While I doubt it, I secretly hope this is the beginning of the end of Amazon's ebook business.  Their stock has been taking a beating by wall street, now lets pile it on with more publishers who refuse to meet their terms.

  • Reply 8 of 82
    timgriff84timgriff84 Posts: 909member
    Are Apples hands really that tied? If they had the power for force publishers into a deal where books couldn't be offered cheaper than the iBooks price then they must have enough power to buy then at the cheapest wholesale price.
  • Reply 9 of 82
    snovasnova Posts: 1,281member
    Quote:
    Originally Posted by timgriff84 View Post



    Are Apples hands really that tied? If they had the power for force publishers into a deal where books couldn't be offered cheaper than the iBooks price then they must have enough power to buy then at the cheapest wholesale price.

    all I know is the books are being offered in the Apple bookstore for those not offered in Amazon.   Keep it going Amazon, piss off some more publishers.  No doubt the other 4 publisher are watching this closely as it could happen to them also.

  • Reply 10 of 82
    adrayvenadrayven Posts: 460member
    Amazon - Gov't Supported, Legalized, eBook Mafia
  • Reply 11 of 82
    inklinginkling Posts: 731member
    undefined
  • Reply 12 of 82
    applesauce007applesauce007 Posts: 1,532member

    I hope they kick Amazon's butt.  They most certainly deserve it.

  • Reply 13 of 82
    jony0jony0 Posts: 264member

    Wel, well, well, who could've seen this coming ?

    Certainly not the hapless DOJ or all the greedy short-sighted consumers. This was Amazon's plan all along.

     

    Quote:

    Originally Posted by bighype View Post



    Interesting how government is not going against the real monopoly in the book/ebook market: the Amazon store.



    Are Amazon lobbyists paying better than Apple's?

     

    That's the general consensus it seems amongst Apple followers of this case. Interesting is an interesting PC choice of words.

     

    Quote:
    Originally Posted by AppleInsider View Post



    Apple led the charge in convincing publishers to switch to a so-called "agency" pricing model.

     

    No, they did not. AppleInsider please stop writing this. Eddy Cue approached the publishers with the wholesale model and they came back proposing the agency model. When Cue forwarded this along with sample wholesale prices to Jobs he famously responded in his infamously unsent draft email :

    "I can live with this, as long as they move Amazon to the agent model too for new releases for the first year, […] If they don't, I'm not sure we can be competetive (sic) …".

     

    Quote:
    Originally Posted by AppleInsider View Post



    That prevented content owners from being able to sell the same titles at a lower price elsewhere, without offering the same price on Apple's iBooks platform --


     


    No, it didn't ! The agency model does not do that.



    Quote:
    Originally Posted by AppleInsider View Post



    -- a "most favored nations" clause.


     


    This is what prevented them !


    These are 2 separate concepts, neither of which by themselves or combined are wrong or illegal, h.





     




    Quote:
    Originally Posted by AppleInsider View Post



    In contrast, the e-book industry prior to the launch of the first iPad was under the "wholesale model" preferred by market leader Amazon. the market as of 2009.


     


    Which is exactly why Eddy Cue first approached the publishers with this model.


     



    These fallacies are being repeated constantly everywhere. I wish that at least AppleInsider would stick to the real facts on this. Daniel, please get the rest of the staff on track.

  • Reply 14 of 82
    snovasnova Posts: 1,281member
    Quote:
    Originally Posted by timgriff84 View Post



    Are Apples hands really that tied? If they had the power for force publishers into a deal where books couldn't be offered cheaper than the iBooks price then they must have enough power to buy then at the cheapest wholesale price.

    Why would Apple want to buy at cheapest wholesale price? They wanted an agency model which was designed such that Apple always gets 30% profit, regardless of price to be set by the publishers.

  • Reply 15 of 82
    trumptmantrumptman Posts: 16,447member
    Quote:

    Originally Posted by SpamSandwich View Post



    A publisher could always drop Amazon and give Apple the exclusive...just thinking out loud here.

     

    Of they could but considering Apple doesn't offer an iBook for Android, Windows (phone, tablet or PC) and barely offers a decent client for Mac, it would significantly limit their market. The publisher could offer it on the Google Play Store as well. In fact the Play Store shows it available for pre-sale for $12.74. Apple hasn't been stopped from offering it either and has it for $12.99.

     

    Quote:

    Originally Posted by Tallest Skil View Post

     
    Originally Posted by SpamSandwich View Post

    A publisher could always drop Amazon and give Apple the exclusive...just thinking out loud here.



    DoJ then sues Apple, forcing them to nullify the deal.


     

    No. Apple hasn't been stopped from taking such actions. However Apple's current attitude regarding these matters makes them an unviable solution for exclusives in the e-pub market because their solutions are inferior, incomplete and exclusive to Apple products.

     

    Quote:

    Originally Posted by timgriff84 View Post



    Are Apples hands really that tied? If they had the power for force publishers into a deal where books couldn't be offered cheaper than the iBooks price then they must have enough power to buy then at the cheapest wholesale price.

     

    Apple doesn't compete on price. They want their 30% and a tidy profit. That is what the whole epub lawsuit was about in the first place.

  • Reply 16 of 82
    SpamSandwichSpamSandwich Posts: 29,485member
    Quote:
    Originally Posted by Tallest Skil View Post

     



    DoJ then sues Apple, forcing them to nullify the deal.


     

     

    What a country!

  • Reply 17 of 82
    jungmarkjungmark Posts: 6,547member
    trumptman wrote: »

    Apple doesn't compete on price. They want their 30% and a tidy profit. That is what the whole epub lawsuit was about in the first place.

    And how much was Amazon taking prior to Apple being in the market?

    Thank God the DOJ allowed Amazon to keep a monopoly.
  • Reply 18 of 82

    So when JK Rowling publishes her next book (via Hachette), I will order direct and expect delivery by owl, rather than by drone.  Seems preferable in any event!

     

    More seriously, doesn't this make ya wish mainstream bookstores were still around? Thank goodness at least Barnes & Noble survives with Apple, as they're the only two real competitors to the Kindle (with their iPad & Nook).  Too bad we lost Borders.  And so many others.  Competition is good!  (And mergers & monopolies are bad!)

  • Reply 19 of 82
    trumptmantrumptman Posts: 16,447member
    Quote:

    Originally Posted by jungmark View Post

     
    Quote:

    Originally Posted by trumptman View Post





    Apple doesn't compete on price. They want their 30% and a tidy profit. That is what the whole epub lawsuit was about in the first place.




    And how much was Amazon taking prior to Apple being in the market?



    Thank God the DOJ allowed Amazon to keep a monopoly.

     

    Are you seriously suggesting that Amazon's margins are higher than Apple's? That would be the most absurd statement I've read in a while.

     

    Apple's goal with pricefixing was the raise margins for everyone by raising prices.

     

    Amazon is no more a monopoly in epub than Apple is with iTunes.

  • Reply 20 of 82
    danoxdanox Posts: 348member
    Quote:

    Originally Posted by jungmark View Post





    And how much was Amazon taking prior to Apple being in the market?



    Thank God the DOJ allowed Amazon to keep a monopoly.

     

    More than 50%?

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