While I don't have much knowledge of how much of that is true (I doubt that lobbying makes much of a dent in their profits), my impression is that the reason they can get by on slim-to-none profits is that they make their money (and big money at that) by playing the float to an unprecedented degree.
Selling quickly while paying your suppliers later gives you "other people's money" to use, invest, etc. At the scales Amazon now works at, this generates ungodly piles of cash.
Remember, Bezos is at heart a Wall Street guy, and he's the best at it. Keep that in mind when trying to figure out what Amazon is up to.
The problem is the ungodly piles of cash don't translate to much profits/money in the bank.
Revenue is only good in the eyes of WS and add nothing to the bank account of a company.
'on behalf of customers'. read: we know what's best for you.
A near-monopoly isn't germane to free market forces where consumers vote with their dollars and the 'invisible hand' adjusts pricing to reflect the actual value of the good or service. Hence anti-trust laws to protect the consumer from this very type of thing.
Looks like DoJ has egg on their face.
This is what a person calls made up nonsense. There is nothing in an agency agreement or wholesale agreement that declares the party must sell to Amazon or that they have to be forced into a loss on their on product by Amazon. If they don't like the price Amazon sells the product at, they simply don't sell them the product for resale.
Amazon has an estimated 50% of the total book market and about 65% of the epub market.
You mention wide availability. How does a website that emails books to your device not signal wide availability? It isn't hard to replicate what Amazon does and given the fact that a publisher could have a specific focus, certainly someone could do it better than Amazon. Certainly a publisher could do it best of all.
There's nothing hard to understand. Amazon doesn't have some storefront you go to. You go to their website. Order a epub or hardcover book and it is either shipped to your door via the mail or sent via the internet. There is nothing about that model that a publisher couldn't duplicate and do so keeping more of the money from the transaction. They could even do it side by side with Amazon or partner with Amazon for a mini-store run by Amazon.
1. Being the majority player doesn't mean they have to let Amazon set their price. You seem to misunderstand the agreements that Apple was judged on and the ones Amazon had in place. The most favored clause basically guaranteed Apple their 30%. It didn't mean any publisher had to take a loss on their product. It didn't even mean Amazon had to take a loss on it. It forced a 30% margin on everyone or else it forced the publishers to lose money.
Understand this example. Amazon buys a book at wholesale price for $5.00. They decide to sell it for $6.00. The mark up is 20%. Apple had the right to purchase the same book at the same price but wanted their mandated 30%. That means if Amazon found a way to sell it for $6.00 Apple could drop their price and still keep their 30% taking the lowered price out of the publisher cut. To prevent this the publishers in collusion with Apple declared they wouldn't sell to Amazon at all unless Amazon sold at the price they wanted.
The publishers are still free not to sell to Amazon at all. They just aren't allowed to collude about it.
2. Your number 2 doesn't even make sense. If selling with Amazon doesn't make a company a profit. Then why do it? The reasoning here is that Amazon is bankrupting publishers and they don't leave Amazon and strike out on their own, negotiate better terms or go exclusive with another epub market because...they'll go bankrupt or have a severe dip in the sales that are supposedly already bankrupting them.
It can't be both ways. The reality is that they are making money but times are changing and the agreements that worked for physical books that had lots of margin and plenty of boondoggles for publishers don't work in the modern age. It is no different than the recording industry. You had artists wondering why they were still getting charged for breakage of a percentage of vinyl records and for warehousing them when their sales were digital. The agreements had to be updated and those dollars, that were largely just easy cash for the record companies, and now book publishers had to disappear.
The publishers didn't collude with Apple because Amazon was bankrupting them with epub prices. It was because the epub prices were harming the price of hardcover books and publishers wanted to protect that market. Go read the case.
3. You refuted your own point. Amazon can't own the market and keep everyone out yet there is a thriving epub market with multiple, easily found and downloaded providers on the iPad. The two statements are incompatible.
4. Using hyperbole and self-reinforcing reasoning doesn't make it so.
The same claims have been made over and over about Walmart. That eventually we'd all have no choice and Walmart would strong arm both suppliers and customers. It has never happened. The same claim was also made about McDonald's.
The answer is out there when looking at these providers. When something gets too big it gets generic. Curated and specialized shops instantly do better against such large providers and take disproportionate dollars away from them. When someone offers a million different horror books no one has the time to browse such selections. So someone sets up a store that sells only vampire and zombie comics and makes a killing. It's called become the Panera bread of books, movies, or clothes.
trumptman wrote: »
1. There is no barrier to entry in the epub market. Anyone can and has set up a website. If publishers feel Amazon has predatory pricing. They could withdraw their books, put them on their own website and email to them Kindles. They can create their own apps and make them available on Android, iOS and Kindle. You site the multitude of apps available on iOS and declare that there is a barrier to entry that no one can climb. You just shot down point number one with your own point number 3.
2. Amazon doesn't set prices. The DOJ didn't act because Amazon was a monopoly and could charge predatory prices. They acted because Apple has a near media monopoly on movies and music and was leveraging it into epub. You've got your reasoning backwards and the court found against Apple.
3. See point 1. You just knocked down your own argument.
4. The publishers in question are major publishers. Amazon is negotiating with them and that is permissable by law. Apple has had to do the same thing in negotiations with various media companies. The reality is that Amazon has helped start and move along a self-publishing revolution. They created the Kindle years before Apple even created the iPhone. However technology is a moving field. Publishers could innovatively decide to create new apps and platforms for various epub devices. They really could hurt Amazon quite easily by forgetting the DRM angle and growing the market larger than Amazon or anyone else could attempt to manage or control.
However they aren't chosing this route. The market had to be forced into it with music and now you can buy almost all music in an array of places with no DRM. The same needs to happen with books. If Amazon stands in the way then the publishers should take the initiative on their own for using DRM-free, open standards that allow easy purchase and delivery of books. However Apple isn't a better solution because they offer an inferior and more expensive DRM-laden clone and wanted to foist it on all of us.