yup, Apple and the publishers are price fixing. and consuemr prices went up. ok, bust 'em.
but ... Amazon was "dumping" with essentially a monopoly control of the market, in order to drive its competitors out of the business. why isn't the DOJ going after them for that too?
yup, Apple and the publishers are price fixing. and consuemr prices went up. ok, bust 'em.
but ... Amazon was "dumping" with essentially a monopoly control of the market, in order to drive its competitors out of the business. why isn't the DOJ going after them for that too?
If there's evidence of illegality then they certainly could do so at some point. "Dad, you didn't see what he was doing before I hit him" does't get you off the hook tho.
I do not know the details of the deals that Amazon makes with publishers and authors but a little while ago there was some interesting folk lore doing the rounds that Amazon could charge what they liked for eBooks and, since it was on the equivalent of "sale or return" they only paid the book supplier a proportion of their actual sale price. This was whether or not Amazon were selling the book at a loss. In other words, publishers and authors were expected to fund Amazon's loss-leader or "market shaping" (ie put the competition out of business) activities.
The agency model puts a stop to that for those books and authors signed up through the Apple initiative. Publishers and authors get a guaranteed minimum for their product. The minimum is floating, however, and based on normal market supply and demand since any supplier could choose to sell for less; but then they would have to supply to Apple at the same level. Amazon did not want to sign up for this as it would have prevented them from having the publishers fund their loss leader activities. The way this would have worked is that since a publisher gets paid by Amazon based on the price for which Amazon sells a book, if Amazon chose to sell at a loss, and paid say 1c to the publisher as a result, Apple could turn around and require the same 1c to be charged to them for the same product, ruining the effect of the loss leader in the short term. Since loss leaders are only useful in the short term, Amazon would not activate them in this arena. It would also mean that Amazon's contracts with their suppliers would have to change as the suppliers would have to be compensated at fair market rates for their product, making Amazon themselves, pick up the tab for any loss leader activity (as indeed they should).
It is foolish to suggest that Amazon's loss leader activity is good for the consumer (even in the medium term). I believe the publishers jumped at the chance to extricate themselves from Amazon's well negotiated, but punitive, supplier terms. Apple presented suppliers with an alternative; a mechanism to push back against a giant outlet that was dictating terms and would put the smaller of them out of business over time.
I'm sure it's more complicated but I've not seen this avenue discussed. If the above is a major factor then Apple is doing publishers and authors a favor (though, likely, not for purely altruistic reasons).
I believe the government is being used as a shill, doing Amazon's bidding and hurting the book authors and suppliers. Followed soon after by the consumers who would end up with fewer choices. Additionally, will consumers benefit from the DoJ's actions or will the ultimate fine, that I've no doubt will be levied, have the effect of being a further tax on Apple (and by normal business processes, their customers)?
I do not know the details of the deals that Amazon makes with publishers and authors but a little while ago there was some interesting folk lore doing the rounds that Amazon could charge what they liked for eBooks and, since it was on the equivalent of "sale or return" they only paid the book supplier a proportion of their actual sale price. This was whether or not Amazon were selling the book at a loss. In other words, publishers and authors were expected to fund Amazon's loss-leader or "market shaping" (ie put the competition out of business) activities.
The agency model puts a stop to that for those books and authors signed up through the Apple initiative. Publishers and authors get a guaranteed minimum for their product. The minimum is floating, however, and based on normal market supply and demand since any supplier could choose to sell for less; but then they would have to supply to Apple at the same level. Amazon did not want to sign up for this as it would have prevented them from having the publishers fund their loss leader activities. The way this would have worked is that since a publisher gets paid by Amazon based on the price for which Amazon sells a book, if Amazon chose to sell at a loss, and paid say 1c to the publisher as a result, Apple could turn around and require the same 1c to be charged to them for the same product, ruining the effect of the loss leader in the short term. Since loss leaders are only useful in the short term, Amazon would not activate them in this arena. It would also mean that Amazon's contracts with their suppliers would have to change as the suppliers would have to be compensated at fair market rates for their product, making Amazon themselves, pick up the tab for any loss leader activity (as indeed they should).
It is foolish to suggest that Amazon's loss leader activity is good for the consumer (even in the medium term). I believe the publishers jumped at the chance to extricate themselves from Amazon's well negotiated, but punitive, supplier terms. Apple presented suppliers with an alternative; a mechanism to push back against a giant outlet that was dictating terms and would put the smaller of them out of business over time.
I'm sure it's more complicated but I've not seen this avenue discussed. If the above is a major factor then Apple is doing publishers and authors a favor (though, likely, not for purely altruistic reasons).
I believe the government is being used as a shill, doing Amazon's bidding and hurting the book authors and suppliers. Followed soon after by the consumers who would end up with fewer choices. Additionally, will consumers benefit from the DoJ's actions or will the ultimate fine, that I've no doubt will be levied, have the effect of being a further tax on Apple (and by normal business processes, their customers)?
Reasonable points or faulty premis?
I don't think you have a reliable basis for a premise . The whole argument depends on "some folklore making the rounds".
To me it's incomprehensible how the market has not demanded free ebooks with their printed books purchased, or at leat ebooks at a minimal cost for every printed book. I can't see how a publisher is forcing me to pay double for the benefit of having an e version of a book for mobility purposes. But that's off topic...
On the topic at hand, it's clear that apple has been involved in an illegal practise here colluding with major book sellers so they could establish a business model that would ensure their profits by creating more profits for the publishers while simultaneously driving a competitor out of business. No wonder some publishers have already settled. Which of course does not benefit the customer. I really can't see what this going back and forth in discussions here is all about...
To me it's incomprehensible how the market has not demanded free ebooks with their printed books purchased, or at leat ebooks at a minimal cost for every printed book. I can't see how a publisher is forcing me to pay double for the benefit of having an e version of a book for mobility purposes. But that's off topic...
On the topic at hand, it's clear that apple has been involved in an illegal practise here colluding with major book sellers so they could establish a business model that would ensure their profits by creating more profits for the publishers while simultaneously driving a competitor out of business. No wonder some publishers have already settled. Which of course does not benefit the customer. I really can't see what this going back and forth in discussions here is all about...
Just like the digital copies of movies that come when purchasing a DVD/Blu-Ray? Good idea and point.
Just like the digital copies of movies that come when purchasing a DVD/Blu-Ray? Good idea and point.
I've noticed some of the magazine publishers offering free digital versions if you are a print subscriber. I assume that's what you want to see with books.
After reading the full text of thr complaint, it certainly makes one wonder what kind of other interesting deals may be happening in the part sourcing area at Apple
On the topic at hand, it's clear that apple has been involved in an illegal practise here colluding with major book sellers so they could establish a business model that would ensure their profits by creating more profits for the publishers while simultaneously driving a competitor out of business.
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
The complaint states that the Amazon bookstore has always made an overall profit. This selling books at a loss theory is something this forum has invented on its own.
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
Well like I said in a earlier post, Amazon selling a e-book below cost is like the dollar menu at a fast food place, most people buy other products at their higher price. Amazon sells more than just books, so if one buys a e-book below cost but buy 2,3,4 other items at their regular price then Amazon makes out well.
Well like I said in a earlier post, Amazon selling a e-book below cost is like the dollar menu at a fast food place, most people buy other products at their higher price. Amazon sells more than just books, so if one buys a e-book below cost but buy 2,3,4 other items at their regular price then Amazon makes out well.
That still doesn't mean a company is automatically going out of business because it doesn't have the same loss leader (I know that wasn't your claim at all but it was myapplelove's claim.)
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
Why are people focussing on this like its all about Apple?
Ya see those seven other companies on the court documetns? (plus the three others that have already settled with the government) thats who this is really about. Apple just helped them get what they wanted.
Why are people focussing on this like its all about Apple?
Ya see those seven other companies on the court documetns? (plus the three others that have already settled with the government) thats who this is really about. Apple just helped them get what they wanted.
Mainly because it's an Apple-centric website. I had intended to post (but decided against it) that if this case was only about the publishing houses then this case would be pretty straightforward but including Apple in it makes it a little strange since Apple doesn't need to actually sell ebooks at all to sell the iPad since there were/are several ereader apps available for it. Also, not sure why you chose to quote me specifically to make your point.
The complaint states that the Amazon bookstore has always made an overall profit. This selling books at a loss theory is something this forum has invented on its own.
Nope... this forum didn't invent it on its own. It was invented by plenty of others all over the net and reiterated on here. Of course we'll never know [for 100% sure] if they sell some books at a loss... Amazon is very tight lipped about that type of thing.
It says in the complaint document that the MFN(Most favored nation) provision in the agreement was unlike other MFN agreements in that it "required each publisher to guarantee that it would lower the retail price of each e-book in Apple's iBookstore to match the lowest price offered by any other retailer, even if the publisher defendant did not control the other retailer's ultimate consumer price". Now, is that really possible that a provision like that can require apple to be offered the book for a dollar by the publisher if Amazon decides to take a huge loss and sell the same book for a dollar?
Mainly because it's an Apple-centric website. I had intended to post (but decided against it) that if this case was only about the publishing houses then this case would be pretty straightforward but including Apple in it makes it a little strange since Apple doesn't need to actually sell ebooks at all to sell the iPad since there were/are several ereader apps available for it. Also, not sure why you chose to quote me specifically to make your point.
1) not even focussing on this forum, everywhere is focussing on Apple.
2) Including apple is because apple was included in the collusion... selling is irrelevant.
3) your post because it said Apple four times with no mention of publishers.
not even focussing on this forum, everywhere is focussing on Apple.
and your post because it said Apple four times with no mention of publishers.
I'm pretty sure my post isn't the only one that says "Apple" multiple times. Also, I am sure people are focusing on Apple for two reasons: 1) It's a huge company that always gets buzz, and 2) It's the only non-publishing company being investigated.
(oh and I only wrote "Apple" three times in this post. Hope that is acceptable to you.)
I know many people here are Apple fans...but look at this objectively.
Since Apple's price fixing with publishers (and make no mistake, that's what the "minimum book price" is exactly), the cost of new novels for eBooks has gone up from $9.99 to nearly $20. It is literally cheaper for me to go to the local brick & mortar store and buy a brand new hardcover than to download an eBook.
There's nothing wrong with Apple's agency model. The problem is with them mandating a minimum (high) book price that no one can undercut. That, quite literally, eliminates competition.
If Google or Amazon did this, the lot of you would be screaming bloody murder. Time for some objectivity, no?
I disagree with your analysis. The Publishers set the price, not Apple. There is no minimum price. Apple may be crossing the line when they want "most favored nation" status, but lots of contracts have such a status - in fact, when you sign a contract with any agency of the U.S. Government, they usually demand it.
Anyone CAN undercut Apple. But if they do, Apple gets to charge that price as well. I don't blame Apple - why would they let a publisher tell them that the price for a particular eBook is $20 and then let the publisher sell to someone else under the same agency model where the price for the same book is $10?
I've been in the publishing and the e-commerce business and I've had to deal with the ramifications of industry lawsuits. There are several strange things about the Government pursuing this:
- The Supreme Court ruled a few years ago that "manufacturers" can indeed set minimum selling prices, not just minimum advertised prices. My personal opinion is that the Supreme Court endorsed price fixing, but that's the law. Most of the TV set and camera manufacturers are now enforcing this on their high-end products. (It doesn't change how much they make, because wholesale is the same - it's really to try and keep legit physical retail in business.) I'm not a lawyer, but I don't see why this ruling wouldn't apply to publishers as well.
- When Amazon sells below their cost, many would consider that to be predatory pricing, which is illegal. Why isn't the Government going after them?
- The independent bookstores sued the major publishers back in the mid-1990s because the publishers (and the major distributors) were selling to the chains for less than they were selling to the independents. The publishers lost that lawsuit. I was involved in an e-commerce operation at the time and I tried to negotiate a deal with a major distributor where our wholesale discount would be based upon a guaranteed level of business and they couldn't do it because of this lawsuit. Our discounts had to be based on how many copies of any given title were ordered at the same time. Everyone got the same discount.
There is no consumer trade publisher that makes very much money. Trade publishing is a very short margin business. When Amazon sells below cost, that does help consumers, but in the long run, it could help kill the industry, just as even legal downloading of low-priced singles has helped kill the music industry.
Comments
but ... Amazon was "dumping" with essentially a monopoly control of the market, in order to drive its competitors out of the business. why isn't the DOJ going after them for that too?
yup, Apple and the publishers are price fixing. and consuemr prices went up. ok, bust 'em.
but ... Amazon was "dumping" with essentially a monopoly control of the market, in order to drive its competitors out of the business. why isn't the DOJ going after them for that too?
If there's evidence of illegality then they certainly could do so at some point. "Dad, you didn't see what he was doing before I hit him" does't get you off the hook tho.
The agency model puts a stop to that for those books and authors signed up through the Apple initiative. Publishers and authors get a guaranteed minimum for their product. The minimum is floating, however, and based on normal market supply and demand since any supplier could choose to sell for less; but then they would have to supply to Apple at the same level. Amazon did not want to sign up for this as it would have prevented them from having the publishers fund their loss leader activities. The way this would have worked is that since a publisher gets paid by Amazon based on the price for which Amazon sells a book, if Amazon chose to sell at a loss, and paid say 1c to the publisher as a result, Apple could turn around and require the same 1c to be charged to them for the same product, ruining the effect of the loss leader in the short term. Since loss leaders are only useful in the short term, Amazon would not activate them in this arena. It would also mean that Amazon's contracts with their suppliers would have to change as the suppliers would have to be compensated at fair market rates for their product, making Amazon themselves, pick up the tab for any loss leader activity (as indeed they should).
It is foolish to suggest that Amazon's loss leader activity is good for the consumer (even in the medium term). I believe the publishers jumped at the chance to extricate themselves from Amazon's well negotiated, but punitive, supplier terms. Apple presented suppliers with an alternative; a mechanism to push back against a giant outlet that was dictating terms and would put the smaller of them out of business over time.
I'm sure it's more complicated but I've not seen this avenue discussed. If the above is a major factor then Apple is doing publishers and authors a favor (though, likely, not for purely altruistic reasons).
I believe the government is being used as a shill, doing Amazon's bidding and hurting the book authors and suppliers. Followed soon after by the consumers who would end up with fewer choices. Additionally, will consumers benefit from the DoJ's actions or will the ultimate fine, that I've no doubt will be levied, have the effect of being a further tax on Apple (and by normal business processes, their customers)?
Reasonable points or faulty premis?
I do not know the details of the deals that Amazon makes with publishers and authors but a little while ago there was some interesting folk lore doing the rounds that Amazon could charge what they liked for eBooks and, since it was on the equivalent of "sale or return" they only paid the book supplier a proportion of their actual sale price. This was whether or not Amazon were selling the book at a loss. In other words, publishers and authors were expected to fund Amazon's loss-leader or "market shaping" (ie put the competition out of business) activities.
The agency model puts a stop to that for those books and authors signed up through the Apple initiative. Publishers and authors get a guaranteed minimum for their product. The minimum is floating, however, and based on normal market supply and demand since any supplier could choose to sell for less; but then they would have to supply to Apple at the same level. Amazon did not want to sign up for this as it would have prevented them from having the publishers fund their loss leader activities. The way this would have worked is that since a publisher gets paid by Amazon based on the price for which Amazon sells a book, if Amazon chose to sell at a loss, and paid say 1c to the publisher as a result, Apple could turn around and require the same 1c to be charged to them for the same product, ruining the effect of the loss leader in the short term. Since loss leaders are only useful in the short term, Amazon would not activate them in this arena. It would also mean that Amazon's contracts with their suppliers would have to change as the suppliers would have to be compensated at fair market rates for their product, making Amazon themselves, pick up the tab for any loss leader activity (as indeed they should).
It is foolish to suggest that Amazon's loss leader activity is good for the consumer (even in the medium term). I believe the publishers jumped at the chance to extricate themselves from Amazon's well negotiated, but punitive, supplier terms. Apple presented suppliers with an alternative; a mechanism to push back against a giant outlet that was dictating terms and would put the smaller of them out of business over time.
I'm sure it's more complicated but I've not seen this avenue discussed. If the above is a major factor then Apple is doing publishers and authors a favor (though, likely, not for purely altruistic reasons).
I believe the government is being used as a shill, doing Amazon's bidding and hurting the book authors and suppliers. Followed soon after by the consumers who would end up with fewer choices. Additionally, will consumers benefit from the DoJ's actions or will the ultimate fine, that I've no doubt will be levied, have the effect of being a further tax on Apple (and by normal business processes, their customers)?
Reasonable points or faulty premis?
I don't think you have a reliable basis for a premise . The whole argument depends on "some folklore making the rounds".
On the topic at hand, it's clear that apple has been involved in an illegal practise here colluding with major book sellers so they could establish a business model that would ensure their profits by creating more profits for the publishers while simultaneously driving a competitor out of business. No wonder some publishers have already settled. Which of course does not benefit the customer. I really can't see what this going back and forth in discussions here is all about...
To me it's incomprehensible how the market has not demanded free ebooks with their printed books purchased, or at leat ebooks at a minimal cost for every printed book. I can't see how a publisher is forcing me to pay double for the benefit of having an e version of a book for mobility purposes. But that's off topic...
On the topic at hand, it's clear that apple has been involved in an illegal practise here colluding with major book sellers so they could establish a business model that would ensure their profits by creating more profits for the publishers while simultaneously driving a competitor out of business. No wonder some publishers have already settled. Which of course does not benefit the customer. I really can't see what this going back and forth in discussions here is all about...
Just like the digital copies of movies that come when purchasing a DVD/Blu-Ray? Good idea and point.
Just like the digital copies of movies that come when purchasing a DVD/Blu-Ray? Good idea and point.
I've noticed some of the magazine publishers offering free digital versions if you are a print subscriber. I assume that's what you want to see with books.
On the topic at hand, it's clear that apple has been involved in an illegal practise here colluding with major book sellers so they could establish a business model that would ensure their profits by creating more profits for the publishers while simultaneously driving a competitor out of business.
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
The complaint states that the Amazon bookstore has always made an overall profit. This selling books at a loss theory is something this forum has invented on its own.
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
Well like I said in a earlier post, Amazon selling a e-book below cost is like the dollar menu at a fast food place, most people buy other products at their higher price. Amazon sells more than just books, so if one buys a e-book below cost but buy 2,3,4 other items at their regular price then Amazon makes out well.
Well like I said in a earlier post, Amazon selling a e-book below cost is like the dollar menu at a fast food place, most people buy other products at their higher price. Amazon sells more than just books, so if one buys a e-book below cost but buy 2,3,4 other items at their regular price then Amazon makes out well.
That still doesn't mean a company is automatically going out of business because it doesn't have the same loss leader (I know that wasn't your claim at all but it was myapplelove's claim.)
Even if Apple were guilty of colluding (I haven't made up my mind on that just yet), how on earth is making a company NOT sell a product at a loss driving it out of business? Is the company going to make it up in volume? Some of the logic in this thread is off the rails. "Apple is trying to make huge profits off of ebooks!" except if Apple even makes a profit off of them it's like 0.03% of it's profits. "Apple is trying to gouge consumers by raising ebook prices!" except ebooks were being sold at a loss with the RETAILER dictating the price so those prices were definitely not guaranteed to remain that low with a strong possibility to increase exponentially.
Why are people focussing on this like its all about Apple?
Ya see those seven other companies on the court documetns? (plus the three others that have already settled with the government) thats who this is really about. Apple just helped them get what they wanted.
Why are people focussing on this like its all about Apple?
Ya see those seven other companies on the court documetns? (plus the three others that have already settled with the government) thats who this is really about. Apple just helped them get what they wanted.
Mainly because it's an Apple-centric website. I had intended to post (but decided against it) that if this case was only about the publishing houses then this case would be pretty straightforward but including Apple in it makes it a little strange since Apple doesn't need to actually sell ebooks at all to sell the iPad since there were/are several ereader apps available for it. Also, not sure why you chose to quote me specifically to make your point.
This selling books at a loss theory is something this forum has invented on its own.
Here is the first site from a simple search that proves otherwise.
The complaint states that the Amazon bookstore has always made an overall profit. This selling books at a loss theory is something this forum has invented on its own.
Nope... this forum didn't invent it on its own. It was invented by plenty of others all over the net and reiterated on here. Of course we'll never know [for 100% sure] if they sell some books at a loss... Amazon is very tight lipped about that type of thing.
[pipped by SolipsismX]
Mainly because it's an Apple-centric website. I had intended to post (but decided against it) that if this case was only about the publishing houses then this case would be pretty straightforward but including Apple in it makes it a little strange since Apple doesn't need to actually sell ebooks at all to sell the iPad since there were/are several ereader apps available for it. Also, not sure why you chose to quote me specifically to make your point.
1) not even focussing on this forum, everywhere is focussing on Apple.
2) Including apple is because apple was included in the collusion... selling is irrelevant.
3) your post because it said Apple four times with no mention of publishers.
not even focussing on this forum, everywhere is focussing on Apple.
and your post because it said Apple four times with no mention of publishers.
I'm pretty sure my post isn't the only one that says "Apple" multiple times. Also, I am sure people are focusing on Apple for two reasons: 1) It's a huge company that always gets buzz, and 2) It's the only non-publishing company being investigated.
(oh and I only wrote "Apple" three times in this post. Hope that is acceptable to you.)
I know many people here are Apple fans...but look at this objectively.
Since Apple's price fixing with publishers (and make no mistake, that's what the "minimum book price" is exactly), the cost of new novels for eBooks has gone up from $9.99 to nearly $20. It is literally cheaper for me to go to the local brick & mortar store and buy a brand new hardcover than to download an eBook.
There's nothing wrong with Apple's agency model. The problem is with them mandating a minimum (high) book price that no one can undercut. That, quite literally, eliminates competition.
If Google or Amazon did this, the lot of you would be screaming bloody murder. Time for some objectivity, no?
I disagree with your analysis. The Publishers set the price, not Apple. There is no minimum price. Apple may be crossing the line when they want "most favored nation" status, but lots of contracts have such a status - in fact, when you sign a contract with any agency of the U.S. Government, they usually demand it.
Anyone CAN undercut Apple. But if they do, Apple gets to charge that price as well. I don't blame Apple - why would they let a publisher tell them that the price for a particular eBook is $20 and then let the publisher sell to someone else under the same agency model where the price for the same book is $10?
I've been in the publishing and the e-commerce business and I've had to deal with the ramifications of industry lawsuits. There are several strange things about the Government pursuing this:
- The Supreme Court ruled a few years ago that "manufacturers" can indeed set minimum selling prices, not just minimum advertised prices. My personal opinion is that the Supreme Court endorsed price fixing, but that's the law. Most of the TV set and camera manufacturers are now enforcing this on their high-end products. (It doesn't change how much they make, because wholesale is the same - it's really to try and keep legit physical retail in business.) I'm not a lawyer, but I don't see why this ruling wouldn't apply to publishers as well.
- When Amazon sells below their cost, many would consider that to be predatory pricing, which is illegal. Why isn't the Government going after them?
- The independent bookstores sued the major publishers back in the mid-1990s because the publishers (and the major distributors) were selling to the chains for less than they were selling to the independents. The publishers lost that lawsuit. I was involved in an e-commerce operation at the time and I tried to negotiate a deal with a major distributor where our wholesale discount would be based upon a guaranteed level of business and they couldn't do it because of this lawsuit. Our discounts had to be based on how many copies of any given title were ordered at the same time. Everyone got the same discount.
There is no consumer trade publisher that makes very much money. Trade publishing is a very short margin business. When Amazon sells below cost, that does help consumers, but in the long run, it could help kill the industry, just as even legal downloading of low-priced singles has helped kill the music industry.