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

124

Comments

  • Reply 61 of 82
    snovasnova Posts: 1,281member
    Quote:
    Originally Posted by gctwnl View Post

     
    Quote:
    Originally Posted by TeaEarleGreyHot View Post

     

    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!)


    B&N and the Nook seem to be a lost cause under pressure of both Amazon & Apple.


    Most Favor Nation's clause would have helped B&N because it would put an end to Amazon's predatory pricing attacks which is killing off sellers like B&N.   The issue is the only thing B&N has to sell is books. They can't continue to take a loss in books and make it up in other areas like Amazon can. B&N's demise has little to do with competition from Apple's bookstore and all to do with Amazon's predatory pricing in books. 

     

    The Prime stuff is also upsetting and has turned out to be game for Amazon to get people to have additional motivation to buy from them exclusive; both product and digital content (I.e. vs. Netflix). They are purposely making non-Prime service horrible to get people to sign up for Prime.    I try to avoid Amazon whenever I can so I don't have Prime membership. Last time I bought something  "in-stock" w/o using Prime it took them 5 days to process the order and ship it out of their warehouse. The actual shipping time once to handed the box over to USPS was quick however.   5 days to "process" vs 2 days actually USPS travel time? Seriously Amazon?? I see your game Amazon, purposely slow down regular in-house processing service to a crawl so that overall door-to-door delivery always takes a week or longer.  Never again. I won't be pawn in your game to motiviate  people to sign up to Prime and won't be doing business anymore with you because of your purposeful regular service in-house processing "inefficiencies".   Non-Prime service order get placed at the back of some queue that takes 5 days to process? That's an entire work week. simply in-excusable. 

  • Reply 62 of 82
    suddenly newtonsuddenly newton Posts: 13,808member
    Quote:

    Originally Posted by pazuzu View Post



    Is better to lose money than Goodwill. Marketing 101.

     

    Better to generate revenues than market to the poor. Business 101.

  • Reply 63 of 82
    timgriff84timgriff84 Posts: 912member
    charlituna wrote: »
    Apple doesn't do the wholesale model. Not likely to ever. Agency where paying out is predicated on getting sales is safer.

    And right now yeah their hands are rather tied cause of the DOJ suit. Until they can get it overturned they are limited in their power to sign new contracts etc.
    That sounds like Apples hands are tied more by their own business model rather than anything the DOJ have done. Obviously getting a publisher to sign a contract saying you get 30% and the publisher cant have a book sold for less elsewhere is the ultimate deal for Apple. They can say there store is the cheapest, not have to do any work in setting prices, and never worry about publishers trying to increase there margins as there only option is to remove the books. They couldn't even give a competitor a price advantage to weaken Apple in the future. But not being able to do it having to operate like everyone else is hardly having your hands tied.
  • Reply 64 of 82
    froodfrood Posts: 771member
    Quote:

    Originally Posted by zoetmb View Post

     

     

    1.  There's nothing inherently illegal about the agency model.

     

    2.  The Supreme Court ruled a number of years ago that manufacturers could indeed set minimum selling prices.   Prior to that ruling, manufacturers could set only minimum advertised prices.    And companies such as Sony and Nikon are now enforcing minimum selling prices on their high-end products.    (Apple also does this, but indirectly, by making its wholesale price so high, there's no room for discounting.)   So if this is fine for manufactured goods, why is not fine for publications?

     

    3.  Apple's deal with publishers would have raised eBook prices, but it also would have preserved an industry.    The publishers were desperately trying not to go the way of the music industry, which is now far less than half of its 1999 peak.    On the other hand, when you sell items below cost, as Amazon frequently has done to gain market share, while that does provide a price advantage to consumers, it also can be considered predatory, which is illegal.

     

    4.  Amazon's tactics have destroyed their competitors as well as destroying physical bookstores.    The chains killed most independent bookstores and Amazon is now killing the chains.   The last large national chain, Barnes & Noble, is on the brink.   Generally, when a lease is up, it doesn't get renewed.    And as Amazon destroys that competition, they will (and have) raise prices.   

     

    5.   While one can make the argument that any retailer can decide what to sell and/or not sell, Amazon is acting as a monopolistic bully in its dealings with Hachette and other publishers.   You don't suddenly declare books unavailable just because the publisher won't give you an additional discount on the wholesale price.

     

    If the major publishers had any guts, they would immediately send Amazon a message by not shipping them any product.   How long would Amazon's bookstore survive if they couldn't buy titles from the top 5 publishers?   Bertelsmann alone has about 22% of U.S. trade publishing (via Random House and Bantam-Doubleday-Dell).   And if Amazon went around the publishers and bought from the distributors like Ingram and Baker & Taylor, they'd have to pay at least 10% more than what the publishers are currently charging them.

     

    Amazon has just a bit too much arrogance.     And if consumers had any sense, they would steer their online orders to other vendors, such as B&N, even if it means paying a little more.   In the long run, they'll be better off.    Unfortunately, the publishers don't have any guts and they won't stop shipping to Amazon.    They'll probably eventually cave to Amazon's pricing demands which will eventually lead to lower salaries and layoffs in the publishing industry as well as fewer books being published.   It could also lead to further consolidation among the publishers just as it has in the record industry where there are now only three major record companies in the U.S.

     

    Book Expo begins next week in NYC.  I bet they'll be a lot of discussion about Amazon's dealing with publishers at the show.


     

    Very good points, and I pretty much agree with all of them.

    1.  There's nothing inherently illegal about the agency model.

    Absolutely agree.  Apple was not charged with, nor found guilty of, implementing the agency model.

     

    2.  Don't know the details of the ruling, so I'll take your word for it as true.  Does the ruling allow the major players in those industries to collaborate and collude together to set that price?

     

    Your remaining points 3-5 have no bearing on what Apple or the publishers were (or would have been) charged with, but they are what many people try to link to the trial, because that is what put publishers under enough pressure to take the bait offered them.

     

    3.  Focusing just on Apple.... How does Apple's plan help publishers at all?  If they are struggling selling books at $9, how does selling books to Apple $12 and guaranteeing them 30% (putting their selling price effectively back at $9) help publishers in any way shape or form?  [Working through the answer to this will let you see how bad a deal this is for consumers, and even for the publishers in the long run]

     

    4.  Watching the book chains wipe out the small bookstores was a sad experience for most ('You've Got Mail'), but ultimately it was consumer's who preferred the ease, price, and larger selections on hand that the chains offered.  Now those 'bullies' are getting eaten by another bully.  It is sad to watch, but not illegal.  As to 'And as Amazon destroys that competition, they will (and have) raise prices' Amazon so far is failing horribly to destroy competition so that isn't likely to occur, and for the 'raising prices' argument the bar has been set very high.  Since under the alternative plan engineered by Apple prices jump to over $12 and publishers have incintives only to raise prices, not lower them (the consumer is completely removed from the process)- Amazon 'raising' prices will only be a valid argument when their ASP goes over $12.  Not going to happen.

     

    5.  Amazon is a bully, and has tremendous leverage by being a large player.  They are not a monopoly and are losing their grasp to iBooks and Play.  On: You don't suddenly declare books unavailable just because the publisher won't give you an additional discount on the wholesale price.  erm.... Yes, you do.  Even in your local convenience store.  If a supplier sets the price of a good so high you don't think you'll make a profit on it, you stop carrying it.  That's the market.  Now other iBooks is free to snap up that title and sell it at a higher price- proving consumers like it enough to pay for it, and that it is profitable.

  • Reply 65 of 82
    hill60hill60 Posts: 6,992member
    Quote:
    Originally Posted by Frood View Post

     

    3.  Focusing just on Apple.... How does Apple's plan help publishers at all?  If they are struggling selling books at $9, how does selling books to Apple $12 and guaranteeing them 30% (putting their selling price effectively back at $9) help publishers in any way shape or form?  [Working through the answer to this will let you see how bad a deal this is for consumers, and even for the publishers in the long run]

     


     

    The publishers did and do not sell anything to Apple, they sold and sell directly to iBook customers via Apple.

     

    Publishers decide what price they want to sell at, from a single person uploading an iBook to the big five.

     

    Apple provides a conduit.

  • Reply 66 of 82
    froodfrood Posts: 771member
    Quote:
    Originally Posted by hill60 View Post

     

     

    The publishers did and do not sell anything to Apple, they sold and sell directly to iBook customers via Apple.

     

    Publishers decide what price they want to sell at, from a single person uploading an iBook to the big five.

     

    Apple provides a conduit.


     

    You're arguing semantics to avoid the point.

     

    Which would make the publisher more money:

     

    A.  Selling a book to Amazon for $9.99

    B.  Selling a book 'via Apple's conduit' for $12.00

     

    The answer is obviously they make a lot more money on the book they sell to Amazon for $9.99.  So what's the catch?

  • Reply 67 of 82
    lightknightlightknight Posts: 2,312member
    john.b wrote: »
    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.
    Can the people (DoJ is an institution made up of people) be sued for gross misuse of the mandate to them given by the population ?
  • Reply 68 of 82
    jungmarkjungmark Posts: 6,918member
    frood wrote: »

    3.  Focusing just on Apple.... How does Apple's plan help publishers at all?  If they are struggling selling books at $9, how does selling books to Apple $12 and guaranteeing them 30% (putting their selling price effectively back at $9) help publishers in any way shape or form?  [Working through the answer to this will let you see how bad a deal this is for consumers, and even for the publishers in the long run]


    5.  Amazon is a bully, and has tremendous leverage by being a large player.  They are not a monopoly and are losing their grasp to iBooks and Play.  On: You don't suddenly declare books unavailable just because the publisher won't give you an additional discount on the wholesale price.  erm.... Yes, you do.  Even in your local convenience store.  If a supplier sets the price of a good so high you don't think you'll make a profit on it, you stop carrying it.  That's the market.  Now other iBooks is free to snap up that title and sell it at a higher price- proving consumers like it enough to pay for it, and that it is profitable.

    3. While publishers will make less, there would and have been more competition. In addition, they would have control and limit Amazon's bullying. Also, the ebook pricing wouldn't devalue books, in general, and will slow down the decline in hardbacks or paperbacks sales.

    5. Is the publisher setting the price too high or is Amazon demanding a larger discount? It may not be a monopoly in the purest sense but it is by far the largest player. If it was a smaller player, this wouldn't be an issue.

    Also if it was a convenience store, if the cost of the product increases they would pass that to the customer. Amazon doesn't want to do that not because it loves its customers but because it have power.
  • Reply 69 of 82
    zoetmbzoetmb Posts: 2,614member
    Quote:

    Originally Posted by Frood View Post

     

     

    Very good points, and I pretty much agree with all of them.

    1.  There's nothing inherently illegal about the agency model.

    Absolutely agree.  Apple was not charged with, nor found guilty of, implementing the agency model.

     

    2.  Don't know the details of the ruling, so I'll take your word for it as true.  Does the ruling allow the major players in those industries to collaborate and collude together to set that price?

     

    Your remaining points 3-5 have no bearing on what Apple or the publishers were (or would have been) charged with, but they are what many people try to link to the trial, because that is what put publishers under enough pressure to take the bait offered them.

     

    3.  Focusing just on Apple.... How does Apple's plan help publishers at all?  If they are struggling selling books at $9, how does selling books to Apple $12 and guaranteeing them 30% (putting their selling price effectively back at $9) help publishers in any way shape or form?  [Working through the answer to this will let you see how bad a deal this is for consumers, and even for the publishers in the long run]

     

    4.  Watching the book chains wipe out the small bookstores was a sad experience for most ('You've Got Mail'), but ultimately it was consumer's who preferred the ease, price, and larger selections on hand that the chains offered.  Now those 'bullies' are getting eaten by another bully.  It is sad to watch, but not illegal.  As to 'And as Amazon destroys that competition, they will (and have) raise prices' Amazon so far is failing horribly to destroy competition so that isn't likely to occur, and for the 'raising prices' argument the bar has been set very high.  Since under the alternative plan engineered by Apple prices jump to over $12 and publishers have incintives only to raise prices, not lower them (the consumer is completely removed from the process)- Amazon 'raising' prices will only be a valid argument when their ASP goes over $12.  Not going to happen.

     

    5.  Amazon is a bully, and has tremendous leverage by being a large player.  They are not a monopoly and are losing their grasp to iBooks and Play.  On: You don't suddenly declare books unavailable just because the publisher won't give you an additional discount on the wholesale price.  erm.... Yes, you do.  Even in your local convenience store.  If a supplier sets the price of a good so high you don't think you'll make a profit on it, you stop carrying it.  That's the market.  Now other iBooks is free to snap up that title and sell it at a higher price- proving consumers like it enough to pay for it, and that it is profitable.


    2.   No, obviously collusion would be illegal.    

     

    3.   When Amazon sells eBooks below cost, that in itself doesn't really hurt the publishers directly, because they still get the same wholesale price. But the problem is that it lowers the perception of what books are worth, which in turn would impact what publishers can charge for hardcover and paperback books.   And in turn, it would (and apparently has) led to demands from Amazon for lower wholesale prices.     We can look again at the music industry where the perception is that if a track is worth anything at all, it's worth $1 to $1.29 and catalog midline CDs sell for $3 to $5 whereas a single listed for $1 and sold for about 65 cents back in the early 1960s ($7.65 and $4.97 in 2014 dollars, using 1964 as the base year).    The publishers are scared to death of this happening to the book industry.    The consumer trade book industry is actually a very low margin business and always has been.   You can't just look at consumer prices - you have to look at what enables an industry to survive.    

     

    4.  I never said it was illegal and certainly the big physical chains didn't generally use predatory pricing.   But one can make the case that Amazon uses predatory pricing and that is illegal.    And you don't have to be the last company standing to be defined as a monopoly.    Microsoft had (some) competition, but in essence, they became a monopoly.   And they realized that which is why when Apple was in financial trouble, when Steve Jobs returned to Apple in 1997, Microsoft made an investment in Apple to keep it alive:  they needed to show that there was some competition.     

     

    5.  "On: You don't suddenly declare books unavailable just because the publisher won't give you an additional discount on the wholesale price.  erm.... Yes, you do.  Even in your local convenience store.  If a supplier sets the price of a good so high you don't think you'll make a profit on it, you stop carrying it.  "

     

    Your local convenience store can only carry a small number of books.   And generally, they do not choose which books to sell - that is handled by the distributor, which are called "rack jobbers".    That's quite different than an e-commerce store which claims to sell "everything".    

     

    Most of your argument seems to be based on the fact that Amazon provides lower prices and therefore the consumer benefits.   But once Amazon knocks out almost all the competition, do you really think prices are going to stay low?    Not a chance.    Then what happens?    

  • Reply 70 of 82
    hill60hill60 Posts: 6,992member
    Quote:

    Originally Posted by Frood View Post

     

     

    You're arguing semantics to avoid the point.

     


     

    Correcting your misleading statement.

     

    Publishers do not sell eBooks to Apple.

     

    Apple does not set prices.

  • Reply 71 of 82
    dasanman69dasanman69 Posts: 13,001member
    hill60 wrote: »
    Correcting your misleading statement.

    Publishers do not sell eBooks to Apple.

    Apple does not set prices.

    You're avoiding [@]Frood[/@]'s questions?
  • Reply 72 of 82
    hill60hill60 Posts: 6,992member
    Quote:



    Originally Posted by Frood View Post

     

    3.  Focusing just on Apple.... How does Apple's plan help publishers at all?  If they are struggling selling books at $9, how does selling books to Apple $12 and guaranteeing them 30% (putting their selling price effectively back at $9) help publishers in any way shape or form?  [Working through the answer to this will let you see how bad a deal this is for consumers, and even for the publishers in the long run]


     

    Quote:

    Originally Posted by dasanman69 View Post





    You're avoiding @Frood's questions?

     

    What questions?

     

    Seeing as how publishers do not sell iBooks to Apple.

     

    Apple does not buy iBooks from publishers.

     

    Apple has nothing to do with the price publishers charge consumers for iBooks.

  • Reply 73 of 82
    dasanman69dasanman69 Posts: 13,001member
    hill60 wrote: »

    What questions?

    Seeing as how publishers do not sell iBooks to Apple.

    Apple does not buy iBooks from publishers.

    Apple has nothing to do with the price publishers charge consumers for iBooks.

    He altered his wording and you still ducked the question.
  • Reply 74 of 82
    trumptmantrumptman Posts: 16,464member
    Quote:

    Originally Posted by jungmark View Post

     
    Quote:

    Originally Posted by trumptman View Post



    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.




    1. Apple doesn't take 30% margins. You do realize they pay for servers, CC fees, etc.



    2. The avg ebook price fell after Apple got in the game.



    3. Prior to Apple, Amazon used its monopoly power to take up to a 70% discount off the wholesale price.

     

    1. I never claimed 30% margin. Read more carefully. I said they take their 30% and a tidy profit. I said their margins are higher than Amazon's which is a true statement as well.

     

    2. The average doesn't matter. The facts matter. The average books sells squat. The majority of books, like the majority of sales in most areas are of a narrow range or products. Apple itself understands this because they keep their product matrix small, focused and hit the areas of the market that offer premium profit opportunities. They don't spam products. They understand that average and profits have nothing to do with each other. Amazon has the same understanding and wanted to offer bundles and deals in the areas of best opportunities which Apple denied and was thus ruled against.

     

    3. Loss leaders are a common strategy. Amazon didn't create it nor are they the exclusive provider of loss leaders. Selling a couple products or offering specials to get people to enter their info, and get into the ecosystem is a great strategy. Apple USED to understand such things like when they would give you an iPod with purchase of a Mac computer.

     

    Apple gives away plenty as well like OS updates,  Applications like Pages and iMovie, and music singles, television episodes, etc.

  • Reply 75 of 82
    dasanman69dasanman69 Posts: 13,001member
    jungmark wrote: »
    2. The avg ebook price fell after Apple got in the game.

    Do you know why prices fell? There was an immediate 12% drop in sales when prices went up.
  • Reply 76 of 82
    dasanman69dasanman69 Posts: 13,001member
    charlituna wrote: »
    Apple doesn't do the wholesale model. Not likely to ever. Agency where paying out is predicated on getting sales is safer.

    And right now yeah their hands are rather tied cause of the DOJ suit. Until they can get it overturned they are limited in their power to sign new contracts etc.

    FYI, Apple uses the wholesale model for movies/TV shows.
  • Reply 77 of 82
    benjamin frostbenjamin frost Posts: 7,203member
    zoetmb wrote: »
    frood wrote: »

    1.  There's nothing inherently illegal about the agency model.

    2.  The Supreme Court ruled a number of years ago that manufacturers could indeed set minimum selling prices.   Prior to that ruling, manufacturers could set only minimum advertised prices.    And companies such as Sony and Nikon are now enforcing minimum selling prices on their high-end products.    (Apple also does this, but indirectly, by making its wholesale price so high, there's no room for discounting.)   So if this is fine for manufactured goods, why is not fine for publications?

    3.  Apple's deal with publishers would have raised eBook prices, but it also would have preserved an industry.    The publishers were desperately trying not to go the way of the music industry, which is now far less than half of its 1999 peak.    On the other hand, when you sell items below cost, as Amazon frequently has done to gain market share, while that does provide a price advantage to consumers, it also can be considered predatory, which is illegal.

    4.  Amazon's tactics have destroyed their competitors as well as destroying physical bookstores.    The chains killed most independent bookstores and Amazon is now killing the chains.   The last large national chain, Barnes & Noble, is on the brink.   Generally, when a lease is up, it doesn't get renewed.    And as Amazon destroys that competition, they will (and have) raise prices.   

    5.   While one can make the argument that any retailer can decide what to sell and/or not sell, Amazon is acting as a monopolistic bully in its dealings with Hachette and other publishers.   You don't suddenly declare books unavailable just because the publisher won't give you an additional discount on the wholesale price.

    If the major publishers had any guts, they would immediately send Amazon a message by not shipping them any product.   How long would Amazon's bookstore survive if they couldn't buy titles from the top 5 publishers?   Bertelsmann alone has about 22% of U.S. trade publishing (via Random House and Bantam-Doubleday-Dell).   And if Amazon went around the publishers and bought from the distributors like Ingram and Baker & Taylor, they'd have to pay at least 10% more than what the publishers are currently charging them.

    Amazon has just a bit too much arrogance.     And if consumers had any sense, they would steer their online orders to other vendors, such as B&N, even if it means paying a little more.   In the long run, they'll be better off.    Unfortunately, the publishers don't have any guts and they won't stop shipping to Amazon.    They'll probably eventually cave to Amazon's pricing demands which will eventually lead to lower salaries and layoffs in the publishing industry as well as fewer books being published.   It could also lead to further consolidation among the publishers just as it has in the record industry where there are now only three major record companies in the U.S.

    Book Expo begins next week in NYC.  I bet they'll be a lot of discussion about Amazon's dealing with publishers at the show.

    Good comment. It's a shame the publishers caved—if they had stuck to their guns with Apple, the DoJ would have thought twice about putting all the big publishers out of business.

    I'll be interested to see how it all plays out. Apple deserve to win their appeal and reinstate the agency model.
  • Reply 78 of 82
    trumptmantrumptman Posts: 16,464member

    Apple's hands are tied because....they won't take less than 30% to even consider offering a sale.....this has nothing to do with a court decision BTW....

     

    Meanwhile over at Walmart........

     

    Quote:


    Walmart (WMT) didn't need to be asked twice.

     

    It began offering nearly 400 Hachette titles for 40% off, with delivery dates as soon as this week. The sale was given prominent placement on the Walmart.com home page.

    On Friday, Walmart said sales of physical books (excluding e-books) were up 70% since Tuesday.

     

    Barnes and Noble's website is also offering discounts for Hachette books.

     

    The CEO of Hachette Book Group, Michael Pietsch, wrote to the company's authors that the dispute with Amazon presents a "challenging period" but said the signs from other retailers are "extremely encouraging."



     

    In case anyone else was keeping track, Amazon has lost every battle with a publisher that I have read about including with all publishers in the DOJ case related to Apple. All publishers demanded and forced Amazon to take their terms, not the reverse.

     

    Amazon has such a monopoly on book sales that Walmart sales only gained 70% this week.

  • Reply 79 of 82
    hill60hill60 Posts: 6,992member
    trumptman wrote: »
    Apple's hands are tied because....they won't take less than 30% to even consider offering a sale.....this has nothing to do with a court decision BTW....

    Meanwhile over at Walmart........


    In case anyone else was keeping track, Amazon has lost every battle with a publisher that I have read about including with all publishers in the DOJ case related to Apple. All publishers demanded and forced Amazon to take their terms, not the reverse.

    Amazon has such a monopoly on book sales that Walmart sales only gained 70% this week.

    I thought Amazon were forced to take Apple's terms, well in the world according to Cote anyway???

    They were supposed to be the "ringleader", weren't they?
  • Reply 80 of 82
    trumptmantrumptman Posts: 16,464member
    Quote:

    Originally Posted by hill60 View Post

     
    Quote:

    Originally Posted by trumptman View Post



    Apple's hands are tied because....they won't take less than 30% to even consider offering a sale.....this has nothing to do with a court decision BTW....



    Meanwhile over at Walmart........





    In case anyone else was keeping track, Amazon has lost every battle with a publisher that I have read about including with all publishers in the DOJ case related to Apple. All publishers demanded and forced Amazon to take their terms, not the reverse.



    Amazon has such a monopoly on book sales that Walmart sales only gained 70% this week.




    I thought Amazon were forced to take Apple's terms, well in the world according to Cote anyway???



    They were supposed to be the "ringleader", weren't they?

     

    Apple's terms were enforced via the publisher agreements which said publishers went and enforced immediately after they signed the same agreement with Apple.

Sign In or Register to comment.