Amazon: Publishers Strong-Armed Us On E-Books 171
Nerval's Lobster writes "Strengthened by an agreement with Apple that set the prices for their respective e-books higher, publishers strong-armed Amazon into giving them similar terms, an executive for the online retailer has testified in Manhattan federal court. The U.S. Department of Justice has taken Apple to court over the alleged price-fixing, after reaching out-of-court settlements with five publishers (HarperCollins Publishers LLC, Simon & Schuster, Hachette Book Group, Penguin Group, and MacMillian). Apple, which competes with Amazon in the e-book space, refused a similar settlement. "Certainly if someone offered reseller, we would have taken them up on that offer," Russell Grandinetti, Amazon's vice president for Kindle content, testified before the court, according to Reuters. "Reseller" means a company sells goods to a retailer for a particular price (usually wholesale), allowing the retailer to set the actual sales price. Under the terms of that model, Amazon could sell e-books for super-cheap, even if it meant going beneath the publisher's wholesale price. Macmillan and Amazon ended up in conflict over the issue, with Amazon temporarily yanking the publisher's e-books from its digital shelves. "We will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon wrote in a statement at the time. "Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book." But Amazon eventually relented to Macmillan's demands, along with those of other publishers, and submitted to the agency model, in which publishers have a heavier hand in setting retail pricing."
What is wrong with these folks? (Score:5, Insightful)
Why do they want even more than for a the paperback?
I am getting less in that I cannot resell it and no physical copy, yet they want even more. On top of that their costs are reduced, since they need not print, ship or deal with any of that.
I just end up not buying those books. It seems though all media folks are just too greedy for their own good, books the same as movies.
Re:What is wrong with these folks? (Score:5, Insightful)
Because it works. Most people buy into it. Why should I pay $20+ for a BluRay? Oh, because it comes with the DVD and a Media file. But I don't want the DVD and Media file!!!! Too bad. You can't buy it any other way (than used.) So consumers buy anyway. And the sellers sit back rub their hands together with a MUAHAHAHA!
As soon the majority just buys into it, it doesn't matter that the price level is higher.
Re:What is wrong with these folks? (Score:5, Insightful)
Because it works. Most people buy into it. Why should I pay $20+ for a BluRay? ....
I'm going to point out that when DVD's were newish, they were $20 new. And you are getting a much higher quality video in Bluray format then you are in DVD format. Give it 10 more years or 4k movies becoming popular to see the price of Bluray movies going down. VHS movies used to cost alot when new also, way back when.
And oddly enough, what you could do is buy a cheaper DVD version of a movie, then download a bluray version to watch. Sure, it's not legal, but you are paying what you feel the movie is worth, just not as much as they want.
Re:What is wrong with these folks? (Score:5, Informative)
VHS movies used to cost alot when new also, way back when.
Indeed they did. In fact, it was this high cost that spawned the rental market for movies in the first place. At that time, most people weren't going to watch a film enough times to justify paying more than $20, and VHS tapes had no "extras", so it made sense to rent the film for 1 to 5 dollars instead (early 1980s dollars). As a teenager I worked in a video rental store and I can remember the store owner telling me that he paid $100+ for each of those tapes. One of the first VHS releases to break this trend was Top Gun which was priced at around $20-$30 when it was released. At the time that was an incredible bargain since most other films cost well over $50.00 if they could even be found offered for retail sale (remember that this was the early to mid 1980s so there were no downloads or even digital copies of films).
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Maybe both? I remember even when tapes were prevalent there was still an expensive early release intended just for rentals, and a later public release. When 'Fear and Loathing' came out on tape I tried to get my hands on it and was told it was $100 for the earliest copies. If I waited another three months for the public release it would be a more reasonable $20 or whatever.
More importantly... (Score:5, Insightful)
You don't set your price based on what it costs you to make/provide something. You set your price to maximize profits.
So it doesn't matter that eBooks are cheaper to make/distribute than hard copies. What matters is whether people are willing to pay the same price for an eBook as they are for a hard copy. eBooks are arguably better than hard copy books, so it stands to reason people will pay at least as much, if not more, for them.
Now, in a free market, you would expect a competitor to enter the market at lower pricing - but books are copywritten, so it's not exactly a free market. Even then, the justice department is examining whether competitors in the market illegally colluded to force the agency model on eBook retailers.
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They are cheaper to "copy and distribute." They are not any cheaper to "write and edit."
I'll give you two guesses which pair above drives the vast majority of the book's price. Hint: it's not "copy and distribute."
Re:More importantly... (Score:4, Insightful)
You haven't operated a printing press & delivery system then.
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Yes, actually. Worked at a the printing headquarters of a group of newspapers.
Printing is a HUGE cost because the initial investment for that scale is HUGE. Probably not factored into your costs.
Re:More importantly... (Score:4, Insightful)
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Because students, particularly in california, are required to read it for school, and thus the price of an otherwise uninteresting book by an overrated author is inflated to hold some kids hostage.
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They are cheaper to "copy and distribute." They are not any cheaper to "write and edit."
I'll give you two guesses which pair above drives the vast majority of the book's price. Hint: it's not "copy and distribute."
It is exactly the same issue in restaurants. You are paying for the food, but the preparation and serving and cleanup is what costs money. Food is the cheapest cost in a restaurant. Printing is a standard same-cost operation now. Editing and marketing are not.
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but books are copywritten
FYI, you mean "copyrighted".
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I'm starting a movement to have it changed to "copywrought" because I think it sounds nicer.
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They may set their price to maximize profits, but in some cases I'm not sure that is actually what they are achieving. By making a product cheaper you will also generally sell more of that product (whether it makes up for the lower prices depends on a lot of factors). Just look at PC game download services like Steam (or ironically Amazon). They have regular prices most of the time, but have occasional sales to attract buyers who wouldn't have otherwise bought the games. For example I recently picked up
Re:What is wrong with these folks? (Score:5, Insightful)
Even worse, if you do what I did and stop buying movies on discs (I'll wait til they show up Netflix), you are part of the "decline of sales that proves billions of dollars lost to piracy" ... even if you never pirate a goddamn thing. :/
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So consumers buy anyway.
Not me.
Re:What is wrong with these folks? (Score:5, Informative)
Because it works. Most people buy into it. Why should I pay $20+ for a BluRay? Oh, because it comes with the DVD and a Media file. But I don't want the DVD and Media file!!!! Too bad. You can't buy it any other way (than used.) So consumers buy anyway. And the sellers sit back rub their hands together with a MUAHAHAHA!
My parents don't have a BluRay player. My mom went to buy some DVD, and had to ask the store if they had it just as a DVD (instead of the combo pack) and the teenage store worker said that they did have just the DVD, but the combo pack is a better deal. My mom asked if the combo pack was cheaper than just the DVD, and they said 'No', but still insisted that it didn't make sense for my mom to buy the DVD because the combo pack was a better deal. My mom couldn't convince the teenager that a combo pack isn't a better deal if you can't use the other disks. So now she kind of holds it as a badge of honor that she's able to confuse the store clerks by getting just the DVD.
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Why should I pay $20+ for a BluRay?
Who is paying $20 for blu-rays? Of my 99, over 75% were $10 or less, the rest were all under $20*. Maybe a handful were used. Plenty contain additional dvd versions that I can either sell, barter or give away**. Then again, I suppose someone has to be buying those $22.99 [and not even newly released] discs at Barnes & Noble.
* Box sets are broken down into individual price points. For example, Indiana Jones @ $75 on release day, is, with the fourth movie's negative culture value aside, $18.75 per fil
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Why should I pay $20+ for a BluRay?
Who is paying $20 for blu-rays? Of my 99, over 75% were $10 or less, the rest were all under $20*. Maybe a handful were used. Plenty contain additional dvd versions that I can either sell, barter or give away**. Then again, I suppose someone has to be buying those $22.99 [and not even newly released] discs at Barnes & Noble.
I find that I don't go to the movies as much as I used to. Every time a movie comes out that I want to see, it seems that it is gone from the theater before I get some free time. So, I buy the Blu-Ray when it is released at the $20 to $24 price. However, it has to be a movie that I know that I will see multiple times over it's lifetime. Movies that I don't plan on watching more than once will be rented at Red Box for $2.25 or watched on HBO, etc.
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Plus if I don't buy them I have something to put on birthday/xmas lists so my wife/mother can't say I'm impossible to shop for
Re:What is wrong with these folks? (Score:5, Insightful)
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Re:What is wrong with these folks? (Score:4, Interesting)
Now let's snap back to reality, where creating a digital copy once the initial works has been done costs nothing and sending it cross the internet costs less than a penny. Still admitting that writing, editing, and licensing costs are the same, why the fuck does the cheaper-overall-to-produce-and-distribute e-book edition cost more?
Re:What is wrong with these folks? (Score:4, Insightful)
servers are more expensive than a physical supply chain? you're crazy
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Got any other shit analogies for me? Yes, I'm a jack of all trades; I figure if I'm gonna be a know-it-all, I probably should, if ya get me.
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That doesn't explain why ebooks cost MORE than printed books. At most it could explain ebooks costing nearly as much as printed books.
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The costs increase right along with revenue and profit. There's no need to raise the price.
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The gp was of course joking. However, the correct action when selling more of something is indeed to raise the price or you're not maximizing your profit. (You don't raise prices because you need to, you raise them because you can).
In a free market someone else would then enter the market, undersell you and take part of the profit. In a monopoly market with copyrights that won't happen, which means you can keep raising prices, preferably combined with sinking a lot of the revenue into marketing which will b
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This is, of course, subjective. I have a Nook, and in a lot of ways I prefer the "core reading experience" on the Nook to my mass-market paperbacks.
For one, I get to choose the font size (and font face, although this isn't so important since most paperbacks have a fine font). Font size is great, because I have some books with tiny type that is annoying to read.
Now, if the argument is that the ed
Re:What is wrong with these folks? (Score:5, Interesting)
This is what a friend of mine is doing. He's released 3 books and a collection of short stories ranging in price from $.99 - $2.99. He's sold about 8K copies thus far this year. When I asked him about it he said if he had accepted an advance from a publisher, about $3,500 since he was a new author, he'd still have to do all the marketing and promotion work himself. He figured if that was the case he'd rather do it all himself and cut out the publisher entirely. As he said the 70% Amazon gives him is a better deal.
An an extra $16k in his pocket really helps his family as that's about half what his wife earns per year. He enjoys writing and is hoping in a couple years that his wife will be able to afford to stay home with the kids. Which is rather important because one has special needs.
Re:What is wrong with these folks? (Score:5, Insightful)
Because they want to keep you buying paper where publishers have all the control. In a digital book market you no longer need financiers able to absorb the cost of printing and distributing 10k copies and you don't need a marketing/sales department that can get your book onto an endcap at bookstores. You still want the people that work for publishers(editors, artists, etc) but you can contract for those directly.
If everyone switches to digital, the publishers' advantage of having a huge bankroll to be able to bet on multiple authors while keep the lion's share of the profit on the few winners is negated when Amazon will sell for anyone and the contract work can paid for like saving up for a car down-payment.
Re:What is wrong with these folks? (Score:5, Insightful)
tl;dr: to kill the medium before it can be born.
They're scared of it. They don't know what to do, or how it will affect their bottom line. They don't want it. They want people to stop using it. They want their control of the industry back.
The only way they know how to do this is to price the new way above the old way. Because they're still living in their old world, where supply is physical and limited physically. And in that world, changing the price of things changes demand.
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Because in a lot of cases they own the facilities that print the books. The parts of the business that e-books either render obsolete or reduce the need for are parts where the big companies involved still make money. They see e-books as a threat to that part of their business and thus their profit margins. They've also seen what happened with music, if you are a content producer it's getting easier and easier to bypass most of the middlemen. The "big content" companies are the middlemen, so while I don
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Pricing is based on utility as well as cost (Score:4, Insightful)
Pricing can be based on utility, rather than cost; see http://en.wikipedia.org/wiki/Utility [wikipedia.org]. I completely agree with you in principle, but I've found I am now just buying ebooks, even when I could get a paper copy for less, because:
- I get it instantly
- I tote my entire library around on a device that weighs 11 ounces
- I can read on multiple devices and it syncs my position automatically
And I recently gave >1000 books to the library when moving, so I know that despite my fears that Kindle as a platform might die, I'm not necessarily keeping all my books forever. (Although since my daughter is 11 and I'm now giving her books I bought when I was a kid... there is definitely some merit to it. If anything, this is the one thing that keeps me occasionally buying paper books; the loaning and hand-me-down factor.)
I'll be honest - I hate myself a little for capitulating, because on principle I completely agree with you. But I also drop $6 on triple lattes frequently and I just feel too busy to feel any rage over a few bucks here or there. I applaud everyone who goes for the cheaper option even if they'd prefer the e-book at that price.
The equivalent crap happens in movies as you point out. HD movies on iTunes being $15 instead of $10, or $20 instead of $15, say, seems fairly absurd, since the difference is perhaps $.02 of bandwidth. TV shows even more crazy, being $3 instead of $2.
The reality is, publishing is a completely shitty business. Macmillan's parent company (a publishing conglomerate) made a whopping 6.7% on 2.1B Euros in 2005 (BEFORE taxes). (2010 they were up to 2.25B euros)
That's not exactly rolling in the dough.
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I am getting less in that I cannot resell it and no physical copy, yet they want even more.
There are sellers all over eBay selling illicit copies of other people's copyrighted media. For example, you can buy many virtual machines stuffed with automotive service manuals... Of course, you can also cut the binding off of a book and feed the pages into a sheet-feed scanner, so that's a bullshit argument, but I bet it's the one they'll use.
Re: What is wrong with these folks? (Score:2)
Because the publishing cost of a $14 plain bestseller is about $3. The rest goes to the author, publisher and reseller. So a few dollars off is reasonable... Amazon selling $14 books for $3 was NOT reasonable.
It's insulting that people only think of the lowest cost, not the VALUE of something. Amazon was tying sales of ebooks to sales of paper books.. Then eating a big LOSS. That's not entirely legal when they do it to ALL the publishers on the FIRST day of release. That's an ILLEGAL MONOPOLY -making tactic
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Why pay hardcover price for an ebook? Because you get it same day the hardcover comes out. If you want to pay paperback prices, wait a couple years for the paperback to come out and the ebook prices typically drop at the same time.
How much of a hardcover price do you really think is physical costs? A 400 page hardcover is equivalent to 100 pages of double side letter paper. I can print that for 5c a page (or less) on a decent laser printer. So as a guy with basic consumer equipment my costs for for printing
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Why pay hardcover price for an ebook? Because you get it same day the hardcover comes out. If you want to pay paperback prices, wait a couple years for the paperback to come out and the ebook prices typically drop at the same time.
According to this [nytimes.com] it used to be about 1 year, and has actually decreased due to pressure from ebooks.
But really, even when paperbacks are out, it often costs more for an ebook today than the paperback version, which is ridiculous and probably what OP was referring to, not paying cheaper-than-paperback prices on release day.
How much of a hardcover price do you really think is physical costs? A 400 page hardcover is equivalent to 100 pages of double side letter paper. I can print that for 5c a page (or less) on a decent laser printer. So as a guy with basic consumer equipment my costs for for printing a hardcover book are $5 or less. Of course, a publishing house can do it for less. On a big run, I suspect their costs for printing, binding and shipping combined probably don't top that same $5.
Okay you've covered printing costs. You're forgetting major costs like physical distribution and storage which are nearly free for ebooks. Then the overhead at every retailer for physica
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Why do they want even more than for a the paperback?
I am getting less in that I cannot resell it and no physical copy, yet they want even more. On top of that their costs are reduced, since they need not print, ship or deal with any of that.
Well, it helps to understand that to a book publisher, the reason for having hardbacks and paperbacks has little or nothing to do with the costs of the physical copies. It's just a reader-palatable substitute for breaking the market into two groups: readers who will pay a lot for a copy of the book immediately, and readers who will pay less and are not in a rush. If not for the tradition of publishing books in different formats, and concern over how well people would take it, I'm sure they'd be happy to rel
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It's the same exact film I'm watching.
Why does it cost more to buy a dvd or game the first day it is released than it does to buy the same dvd or game 6 months later?
Asking questions like that help you answer questions about the cost of entertainment thingamajigs.
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Why do they want even more than for a the paperback? I am getting less in that I cannot resell it and no physical copy, yet they want even more. On top of that their costs are reduced, since they need not print, ship or deal with any of that.
I just end up not buying those books. It seems though all media folks are just too greedy for their own good, books the same as movies.
Google magazines sometimes wants double what a print version costs
Re:What is wrong with these folks? (Score:5, Informative)
Wow, that's a lot, right!? Weeeeelllll...... not so much after you deduct author's living expenses while writing the book, the salaries of editors, typesetters, and other people involved in the production of that final .epub file, and less still after you calculate the distributor's cut - Amazon, Apple, B&N, and others don't sell that book for free.
Uh, what? A writer whose e-book sells 50,000 copies at $9 with a typical trade publishing deal makes about $68,000 after giving $12,000 to their agent. Amazon makes about $135,000. That leaves $235,000 to the publisher.
Do you really, seriously believe that editing a book, formatting it as an .epub and sticking a cover on costs $235,000?
Oh, apparently you do.
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Simplistic. You forgot to mention the other 1000 books they were sent that had to be looked at and rejected, that did not come for free, the publisher paid staff to do that. You then for got about the other 100 books that were accepted but went through a lot of editing back and forth until it was publishable, which then left probably 99 of those books selling a few hundred copies. There would be checks made before publication for plagiarism etc. Did you notice how there was a hell of a lot of expenses going
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That wouldn't make the ebook cost more. Those are costs that both versions share equally.
Re: What is wrong with these folks? (Score:3)
Most hardcover books are more like $20. An ebook sale CANABALIZES that extra $5 in the publishers pocket... It has to come from somewhere.
The bankers want 10% returned on their money to invest in the publisher... They got stockholders to please.. Stockholders that want profits in CASH this quarter, not pretend profits in the future.
So the first x units of an ebook need to directly count as sales of full price new hardcovers. That is why they cost do much. The secomdsry purpose is to give paper book sellers
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I buy Steam games on sale all the time. They even notify me if a game on my wishlist has gone on sale. But i'm not trying to argue about that, lol. I do agree with what you are saying about hardcovers. I don't see why that wouldn't be possible with ebooks as well? The first month or 10k copies has some sexy cover art and costs 15-30$ (what i usually pay for a hardcover). After that they can drop it down to 8-9$ for the next 5-10 years. That would match the existing physical book model, right? They c
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Well, actually, as someone who resells books when I'm done with them, I do care. If you want me to buy the e-book edition, it needs to be priced at least close to (price of paperback - what i can sell it for when I'm done).
DERP.
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If you have multi megawatt cooling and fibre networking then i think you aren't a book publisher. You are a data center that other businesses will pay to host their sites.
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They are not paying the entire cost of the data center to host their two/three servers. At worst, hundreds per month per server.
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Because it costs a certain amount of money to write, edit, proof, print, and distribute a book. ... Stop being cheap.
I'm not complaining about the cost of purchasing the story. I am complaining about the cost of the ebook. If I have a choice of going to B&N and buying a paperback for 10% of cover price, OR I can buy an ebook for the cover price of a paperback or MORE. Presumably purchasing the paperback helps defray the cost... and yet it is less than the ebook. Why should I get the ebook?
One argument is ebooks cut into hardcover prices. Then charge more for the ebook, then when you release the paperback, lower the
Re:What is wrong with these folks? (Score:4, Insightful)
E-books should still not be more expensive than the paper-back. Why is this so hard to fathom?
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E-books should still not be more expensive than the paper-back. Why is this so hard to fathom?
It's probably the same reason people don't fathom how economics actually works.(I'm snarking at you now).
A free market means a seller can set a price and buyers can choose to buy or not.
Of course, it's a lot more complicated than that because publishers don't sell paper books to readers; they sell them to distributors.
When publishers are able to sell directly to readers, then they think they can cut out that middle man of the distributor and reap all those profits. But to the reader, now I have to go eac
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Cutting down trees, pulping them, bleaching the pulp, processing the pulp into paper, shipping this paper across the country, typesetting, printing, assembly, packaging, shipping, stocking, clearance of unused stock, returns, retail markup.
Just to name a few. There's millions of dollars in those items, yes spread across lots of books, but the fact remains that millions in cost is negated. Distribution costs falls to pennies rather than multiple dollars. Producing new copies of the book is essentially free,
The Oil industry does it daily (Score:3)
But you can't fix prices on books...
Well, e-books anyway.
Dead trees are still highly variable.
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Please elaborate. My understanding was oil is sold on an open market and is a heavily traded commodity. What makes you think price fixing by oil companies inside the USA is occurring.
Mind you OPEC can do what they like since our laws do not apply to them.
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hahahahahahha!!! next you're going to tell me that the bond market isn't being manipulated, even though the yield is less than (real) inflation (which means any honest bond investor is losing money on bonds). how about gold? yeah that definitely isn't being manipulated. pffft.
anyone who buys anything on the open market is a fool. its just unfortunate that we're all forced into playing a role because in many countries superannuation is compulsory, and super (or 401k or whatever you call it in your country) i
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The bond market of which you speak (and the financial markets in general) can be gamed by conglomerates of individual entities. However the prime difference here is that these combinations affect the *secondary market* and are *not* related to the companies that float the bonds. That is, the company that floated the bond does not benefit directly from any support the security receives in the secondary market.
E-books on the oth
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You might want to look at how Treasuries and the Federal Reserve are working these days. There is _no_ market on T-bonds. The rate is set by the Fed and the government. Many bonds are prices at federal funds rate + x%.
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I too would like OP to explain how the oil industry sets about mandating price on the fungible commodity that they sell. I'm not saying the commodity market is rational, mind you. I'm just saying if a producer tried to strong arm these kinds of tactics, the market buyers would respond with a very loud and heartfelt FOAD.
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They did it by agreeing the level of production each OPEC member was allowed to produce. Most visible they caused the oil crisis, see http://en.wikipedia.org/wiki/1973_oil_crisis [wikipedia.org] and others later.
Over the time, after the various oil crisis, western governments started to find other OPEC free source of oil, so OPEC influence started to decrease somewhat. Since 2004-ish, the influence of OPEC is greatly reduced. We are at peak capacity and not producing enough oil, so the relationship between controlling t
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OPEC has the same problem as all cartels, cheating (producing more then their allotments, overestimating reserves to get a bigger % of production etc etc).
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I don't think that's how the price of oil is set. But that's just speculation.
promoting piracy (Score:2, Funny)
grow some balls (Score:2)
If it's a vendor that ups the price, same deal, in that I just don't carry them. For example, OCZ Vertex 4 SSDs. They were $80-100 all the time. Then suddenly their press release s
Re:grow some balls (Score:4, Insightful)
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Re:grow some balls (Score:5, Insightful)
As Amazon said, the publishers have a monopoly on works by their authors.
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Since when can I get the same book from 2 different publishers?
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Amazon undrestands books, publishers only control. (Score:2, Insightful)
Amazon has made a fortune by understanding the marketplace. Publishers only care about controlling the works they release. I think often they forget that the reason people purchase books, and just assume they'll buy them. There's a reason I frequent used bookstores and only pick up ebooks for free or for a very, very low price. I like lending my books, I like selling my books if I don't like them, and I like not having to worry about whether my device is charged.
People know when they're getting ripped o
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Gotta spend money to make money.
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Egon was only half right. (Score:1)
Long live the all holy business model.
Here, have a real article (Score:5, Informative)
The link in the summary is /. masturbation, so here's the Reuters article [reuters.com] that it links to, no extra ad impressions needed. (wtf is "Slashdot Cloud"?)
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The court doc has a dramatic graphic which shows you exactly what happened to ebook prices [mediabistro.com] while this was going on. All the colored lines are publishers who conspired with Apple to switch to agency pricing the first week of April 2010, except for Penguin (beige) who switched the end of May. The two grey lines are publishers who stuck with wholesale pricing (Random House and other non-majors).
Lose, Lose (Score:3, Insightful)
When Amazon says that they'd like to sell some books below wholesale, and claims that the agency model prevents that, they are lying their asses off. They could easily get around that restriction. The simplest way being by offering an account credit on certain books. The problem with that approach from Amazon's perspective is that it would reveal how large the subsidy is. Doesn't matter to the consumer, but it is competitive information they wouldn't want public.
On the other hand, if the agency model prevents Amazon from negotiating a different wholesale price than Apple pays, then that is collusion. I'm not sure it rises to the level of needing a government crackdown, but it is slimy none the less.
And the flip side of this is that Amazon of course would be happy to subsidize book sales and Kindles to drive people to the Amazon store to buy other things. Which in turn could have the anti-competitive effect of making tablets from Apple, Samsung, and others over priced by comparison and push them out of the market.
It doesn't matter which way the courts rule on this one, the consumer loses.
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The agency model for Apple doesn't prevent Amazon from negotiating a different wholesale price to Apple. It's just that once they've done so, if they choose to sell it at a lower markup to Apple, Apple can effectively go back to the publisher and get a further discount. It's not collusion unless Apple and Amazon lock themselves in a room and work all this out.
Not to defend Apple, but... (Score:3, Informative)
Amazon's model isn't much better. They make their money by setting the price for a best-seller high, and everything else ridiculously low. And this seems reasonable to a "supply and demand" society, but there's an endless supply of ebooks. More over, that means that authors aren't going to make enough money to keep writing unless they happen to have a best-seller - and the market ends up flooded with garbage like Twilight and 50 Shades of Grey. It's a CostCo mentality. The consumer doesn't know any better, and hey, they're getting most of their books for 99 cents! Seems great from their perspective. But that model kills publishing in general. Anyone who thinks the only cost to publishing a book is the time it takes to write it, has never published a book. Even for a bare-bones self-published ebook, you need at the very least an editor. For anything serious, or that crosses over into the print world, then you need a cover artist, a designer, marketing, and probably someone who knows how to bring it all together... they call those people publishers.
Have you seen the absolute garbage that gets "self published" on Amazon? The ability to put a book out there on Amazon's site *for free*, is perhaps the biggest danger to the publishing industry ever. There are thousands upon thousands of "books" that are nothing more than $.99 scams. Some are literally garbage text or word for word rip off's of someone else's work with a new title. They might only get a few suckers, but they do this *thousands* of times over.
Re:Not to defend Apple, but... (Score:5, Interesting)
And it also opens up opportunity. I have one friend who elected to do Amazon self-publishing. Ended up on Good Reads and got some glowing reviews, about 30 last I checked, and has sold 6k of his first book. He just released his second book and a collection of short stories and talking with him over memorial day he's made about $16k so far this year. Much better than the $5,000 advance the publisher offered and he would have had to do his own marketing anyway. That doesn't sound like much, but his wife makes $30k a year and he makes around $50k. An extra $16k with two young kids makes a difference.
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Certainly it can be done, and frankly, I think the publishing industry in general must change the way it does things or it's dead in the water. But most of publishing is about getting seen by the right people. You can do that as an author if you have the time (it takes gobs!), and most publishing firms do a crappy job of this anyway. Just like Amazon, they are going to put their real money and time on the books that they know will sell. If you're a first time author (or even mostly unknown) then you get a m
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There is the supply and demand of actual books, whether paper or electronic.
However, books are entertainment and in the entertainment biz, the big demand is for a supply of "newness."
We pay more for brand-new titles than for stuff that's not quite so new anymore.
They're Hurting Themselves (Score:3)
First Sale? (Score:2)
What happened to that old thing?
The publisher sells to Amazon and should have absolutely no say in the price Amazon then charges when they resell it. It's not the publishers concern as to how much profit/loss Amazon make. Anything otherwise is pretty much the definition of price fixing.
Re:First Sale? (Score:4, Insightful)
That's exactly what Apple wanted to kill. Amazon was willing to sell eBooks with 5% profit margin because it cost them nearly nothing to sell them. Apple wanted 30% and they saw an opportunity to raise the prices and get more profit for Apple and the publishers. The 5 Publishers that have settled with the government all had record profits after they colluded with Apple to fix prices.
The funny thing is this is ALL in the emails, the intent to raise prices marketwide. The intent to limit competition so Apple could gain marketshare without price competition. The intent to raise prices more than the 30% margin so the publishers could rake in even more money than they do on paper books. It's all there, the government has all the evidence and that's the reason the Publishers all settled after denying they would. The publishers lawyers took one look at all the information the government has and told the publisher to settle or they would get killed in court.
Price fixing is illegal and if the government has the evidence to prove it you will get nailed. The reason you see so few prosecutions is the government rarely has good documentation, the collusion is often done orally behind closed doors with no notes or records of the conversation. Job's probably believed he had enough chutzpah to avoid a prosecution or he believed he was above the law. He was an egotistical asshole that didn't give a rats ass about ordinary people.
I'm actually grateful to Apple for Agency (Score:2)
That's rich (Score:2)
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Re:And this is why I do not do "E-Books" (Score:4, Informative)
Cracking the DRM and converting between epub and mobi is trivial. PDFs suck on e-readers, and tablets suck for reading.
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calibre seemes to be able to convert them all fairly well to pdf though I perfer epub or .html.zip
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I would say Macmillan is a little bit larger than your magazine publisher.
They're 170 years old, have offices in 41 countries and in 2010 their parent company had revenue over 2.2 billion euros. 10% of that was digital media.
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You pass up that $5 Bluray of Terminator 2 at Bestbuy, but you'll buy any number of $9 Kindle titles. Because... you know.... books are expensive.
Or maybe because you've already seen Terminator 2 once at the cinema and several more times on TV or video, and pretty much know all the words. If it were a recently released film, it would be much more than $5 on Blu-ray and that would be after they'd had a cinema release at $10 seat (with advertising and overpriced snacks paying the theatre's rent), then they'd have more bites at the cherry with pay TV, streaming and network TV.
...and that's for something that will keep you amused for two hours, while