back to article Publishers put a gun to our heads on ebook pricing, squeals Amazon

A top Amazon executive has said that publishers gave the etailer an "ultimatum" to let them set the price customers would be charged for ebooks. Testifying at the fruity firm's trial for price-fixing, Russell Grandinetti, veep for Kindle content, said that if Amazon had the choice it would still be on the old wholesale model of …

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Silver badge
Unhappy

Correction:

"The MFN clause stopped the book houses from offering better prices to other retailers, something Apple also insisted on, which left ebooks at a more or less uniform inflated price for customers no matter where they were bought."

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FAIL

The problem with the wholesale model Amazon pursued is that they wanted to have their cake and eat it.

Firstly, they bought wholesale at a discount from the publisher, then sold ebooks AT A LOSS to undercut their competitors. This is called "dumping" and, well, the goal was to build a monopoly. Using DRM on the Kindle platform locked consumers onto the Kindle platform once they bought the cheap books; the goal was clearly to drive competing ebook stores to the wall and then lock the customers in. (The publishers fell for the DRM snake-oil, and thereby played into Amazon's hands; Amazon, not the publishers, held the keys to the DRM.)

Secondly, Amazon -- if you read their small print -- claim to be a publishing platform; they are granting the end users a limited license to use their content, not selling the "books" they bought at wholesale consignment price as actual books (to which the First Sale doctrine applies, meaning you're free to do what you like with a dead-tree book you've bought: use it as toilet paper, read it, re-sell it, anything except copy it).

In what legal looking-glass world does a retailer get to buy product wholesale for redistribution (the standard book distribution deal) but also get to claim to be a software publisher distributing limited access rights to the product on their platform?

By 2010, Amazon had about a 90% lock on the ebook market in the USA. That's when the publishers began to panic and look into alternative ways of selling ebooks through other channels that could undermine the AMZN monopoly.

It's a sign of Amazon's huge lobbying muscle that the DoJ anti-trust suit is being directed AT THE PEOPLE WHO TRIED TO BREAK THE MONOPOLY INCUMBENT'S GRIP, rather than at the monopolist.

(Full disclaimer: I'm a full-time novelist, published by some of the firms named in the case.)

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Author's cut?

What sort of royalties, as a percentage of cover price, do you get from these firms? IIRC, Amazon offer 35% (or 70% if you pay per MB delivery costs) for direct publishing.

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Re: Author's cut?

For ebooks, industry standard is converging on 25%. However, the publishers do a ton of marketing and editorial work which falls on the author's shoulders if they self-pub via Amazon. They also sell through other, non-Amazon outlets. And Amazon only upped their payments to the 35% or 70% models after Apple intro'd the agency model -- which threatened to take a bite out of Amazon's monopolistic lunch.

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Publishers brought it on themselves

The publishers had pretty much ignored/been indifferent to ebook publishing before Amazon started pushing it in a big way. It's still mired with legacy concepts and agreements that lead to much silliness regarding geographical availability for what are essentially a few data bits (as opposed to expensive to set up physical print runs).

The DoJ is probably of the opinion that the barrier to entry to the ebook market is not high enough to justify treating Amazon as a monopoly.

This opinion may not be taking into account 3 factors

1) A lot of ebook readers out there are kindles

2) If you want to buy books from someone other than Amazon and you have a kindle then you must also use a computer to get the books on your kindle (technical skills suddenly required), and you are limited to DRM-free titles as Amazon control the DRM.

3) If you want to change ebook readers and already have a large selection of Amazon books, then you are kind of stuck (ignoring DRM removal which would, or course, be entirely illegal under the DMCA)

On the other hand, the various tablets have reader apps that can read ebooks, and can generally run a Kindle app as well as an overdrive book reader or whatever, so at that point it does become easier for someone else to enter the market..

And fundamentally, the publishers control the content. If they opened their own ebook stores with their own DRM standard (or no DRM or used an existing system like Adobe's) and a reader app, how much customer base would they really lose? Would all these non-technical kindle owners really go out and pirate the stuff because they cant get it from Amazon, even if its available from somewhere else?

Or do they fear those customers would just go read someone else's books because their kindle cant directly buy from the new stores?

Now that book readers are £30 ,or free with your mobile phone or whatever, the difficulties of getting your own reading device/app out there are becoming less and less.

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Re: Author's cut?

No comment on the article, I just wanted to say: "Wow, Charlie Stross!" :-)

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Re: Publishers brought it on themselves

Oh, and the geo restrictions are really what screwed non-US readers , and probably persuaded them to get Kindles.

I had a sony book reader before Amazon got big on ebooks, and for a year or so I could get whatever I wanted from the US ebook stores, paying in $.

Then suddenly the publisher work up to this fact and cracked down on that. So rather than me being able to pay them for content , I couldnt. Not "Buy that from a UK based ebook seller". I actually couldn't buy almost anything I wanted to read, at all, in ebook format. I could however order the books to be delivered from the US Amazon store to me by post, because that kind of idiotic self harming logic makes total sense.

I also read alot of Baen stuff because they don't do DRM, and they let me buy stuff from them direct. in a format designed for my reader.

Then , Amazon came on the ebook scene. Using their power of "Having a slight clue", I presume they persuaded the local rights holders to either publish with them, or they buy the local rights themselves? They also pressure the publisher to make stuff available in various regions.

"The publisher has not made this content available on kindle in your country , click here to register your interest"

If it wasn't for (publisher imposed) geo restrictions, I suspect the ebook market would have remained alot more fragmented

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So what was it?

A) Amazon was doing something they didn't like.

B) Amazon was doing something illegal.

If it's A). Too bad, Not Amazon's problem if Apple can't get their expected 30%. Publishers are afraid that Amazon will start telling them what to do? Again too bad, that is not an excuse to run a price fixing scam.

If it's B), who made the publishers Judge, and Jury? If Amazon was doing something illegal they should have taken then to court, who do the publishers think they are? Batman?

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Alert

Two wrongs don't make a right.

Firstly, they bought wholesale at a discount from the publisher, then sold ebooks AT A LOSS to undercut their competitors. This is called "dumping" and, well, the goal was to build a monopoly.

This is indeed frowned upon, as dumping is usually done with this goal. It is actually illegal in some countries, but in the US it might not be, or has some kind of exceptions. But then, if it is illegal, the publishers could've simply taken Amazon to court instead of trying to go all Judge Dredd on them.

But price-fixing is actually illegal in most countries, including the US. And it seems that they were making it such that they could simply point that it wasn't price-fixing, simply that they couldn't sell for less because of Apple's MFN clause. In reality, they were colluding with Apple, having the price point set higher than what Amazon was getting, thus forcing the market to go much more expensive. And while dumping hurts the consumer in the long term (when the monopoly is established and prices are jacked up), price-fixing hurts the consumer immediately.

Apple deserves to be punished for stooping so low.

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Let's just make a few corrections.

"Firstly, they bought wholesale at a discount from the publisher, then sold ebooks AT A LOSS to undercut their competitors. This is called "dumping" and, well, the goal was to build a monopoly. "

Amazon sold select titles at a loss, and this is very legal; it is called pricing strategy. Also, saying the goal was to build a monopoly, and only a monopoly, is rather selective in the reasoning. Amazon's other book business (print books) requires a heavy investment in warehousing and shipping. Ebooks require none of those costs, so it would be smart business to make the ebook market as attractive as possible. Lower book prices are one such avenue to make a consumer think about a potential investment in an ebook reader.

"Using DRM on the Kindle platform locked consumers onto the Kindle platform once they bought the cheap books; the goal was clearly to drive competing ebook stores to the wall and then lock the customers in. (The publishers fell for the DRM snake-oil, and thereby played into Amazon's hands; Amazon, not the publishers, held the keys to the DRM.)"

Do you also blame gun manufacturers when someone uses a gun to commit a crime? Amazon may provide the DRM, but the publishers decide whether or not to use it. In fact, because publishers are so Pro-DRM, I'd bet good money that any ebook contract with Amazon required that some manner of DRM be available. And why single out Amazon for having DRM available? Barnes & Noble and Apple both have DRM availability to publishers, who employ it. Your blame of DRM usage is entirely misdirected.

"Secondly, Amazon -- if you read their small print -- claim to be a publishing platform; they are granting the end users a limited license to use their content, not selling the "books" they bought at wholesale consignment price as actual books (to which the First Sale doctrine applies, meaning you're free to do what you like with a dead-tree book you've bought: use it as toilet paper, read it, re-sell it, anything except copy it)."

Once again, you are directing your rant against the wrong party. The publishers control the ultimate license grant, not Amazon, just as Microsoft controls the ultimate license grant to Windows or Office. Amazon has even tried to set up a used eBook marketplace (as did Apple), but the publishers nixed that idea based on court rulings that digital products are licensed, not owned such as a print book or physical disc. You know that ability to "lend" ebooks once? If you look at certain big six titles, you'll notice that it is not enabled. That's because the publisher has a say in the license restrictions.

"In what legal looking-glass world does a retailer get to buy product wholesale for redistribution (the standard book distribution deal) but also get to claim to be a software publisher distributing limited access rights to the product on their platform?"

The one where the publishers granted that right? (see above)

"By 2010, Amazon had about a 90% lock on the ebook market in the USA. That's when the publishers began to panic and look into alternative ways of selling ebooks through other channels that could undermine the AMZN monopoly."

And before that, Sony had a 90% share of the market. You know why? Because no one was in the market other than Sony. Amazon entered an untapped market and pushed their product. Logic dictates that their market share would grow. And it did. But that 90% didn't dissuade B&N from entering the market or Kobo from announcing its intentions to enter the market, all well before agency pricing was a thought in anyone's mind.

"It's a sign of Amazon's huge lobbying muscle that the DoJ anti-trust suit is being directed AT THE PEOPLE WHO TRIED TO BREAK THE MONOPOLY INCUMBENT'S GRIP, rather than at the monopolist."

If you'd have followed this story, you'd know that Connecticut was the first state to push this investigation, and because the red-flag evidence was an across-the-board price increase at all retailers, Amazon was investigated as a possible party to the collusion. But even if Amazon went to the DoJ, so what? If something appears to be illegal, it should be investigated. Why blame the person who alerts the authorities?

Having a monopoly is not illegal, and selling below cost is also not illegal. You need additional acts to make those things illegal. In the case of selling below cost (predatory pricing), you also have to prove that the predator had intentions of recouping costs through above-market pricing once all competitors had been removed. Since Amazon has made a business of selling at low cost, any claim that they intended to recoup costs by increasing prices would be not just speculation, but speculation not based on any past behavior.

That's why that claim fails.

Lastly, breaking Amazon's legal monopoly is fine as long as it is done legally. Collusion is not legal, and if it indeed did happen, the DoJ is right to go after the colluding parties.

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Re: Publishers brought it on themselves

Since Baen signed on with Amazon the ebook price on Baen's site went up about 30% ($6.99-$9.99). I guess to bring into line with the price charged by Amazon. Really the cost of an ebook to the publisher is next to zero. Just editing cost + author payment+ some small amount for IT and Network. No dead tree price involved.

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@Al N

For someone who believes the publishers possess and ought to possess so many varied powers over their product, you seem oddly unwilling to assign them the one power they ought to have over it: the power to set the price and terms on which they will make a sale. So far the only proof offered that there was collusion is that all of the distributors wound up selling at the same price. Markets do that all the time.

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Re: @Al N

"For someone who believes the publishers possess and ought to possess so many varied powers over their product, you seem oddly unwilling to assign them the one power they ought to have over it: the power to set the price and terms on which they will make a sale."

Check that last sentence and find the error. "THEY will make a sale."

Do you see the problem? What sale are you speaking of? The publisher sale to the retailer? The retailer sale to the consumer?

These are negotiable terms, not RIGHTS. The publisher can ask for price-point control over its product that another entity is reselling, but the retailer can refuse. The publisher can then drop the demand or pull its product and walk away. The publisher can also (and always will in a wholesale model) negotiate the wholesale price. This is the same as what terms are granted in the licensing; negotiable. That leads back to the sole RIGHT the publishers have when dealing with a retailer--the right to walk away from negotiations.

If publishers (selling through a 3rd party retailer) want to set the retail price, they must negotiate for that control with the retailer. If publishers want to limit how their product is distributed, they must negotiate that ability with the retailer.

"So far the only proof offered that there was collusion is that all of the distributors wound up selling at the same price. Markets do that all the time."

Why do you mention proof? What does proof have to do with this case? This is not a criminal trial where the prosecutor must "prove his case beyond a reasonable doubt." This is a civil matter, and the plaintiff (the US Government) simply needs to show a preponderance of evidence, which can be entirely circumstantial. The plaintiff doesn't need to prove anything.

Also, as I said in another post, I'm not even sure why this case went to trial. Apple has already "lost." While Apple may still be at trial, the other publishers have settled and are restricted from employing the agency model of pricing and from employing an MFN clause. That includes their dealings with Apple.

If Apple wins, it isn't going to turn back the clock. It will still not be able to sign new agency agreements with the settling publishers, at least not for several years. If it loses, however, it will suffer more harsh penalties, and since appeals delay the enforcement of those penalties, Apple could be double-stacking itself with penalties in regard to the agency model (it's already under an indirect restriction because of the penalty on the publishers, but it would get its own penalty long after the publisher restrictions have been lifted).

A settlement would have placed Apple and the publishers on the same timeline of penalty expiration. And against the government, you generally don't get back your attorney's fees if you win your case.

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What are you on about?

"the power to set the price and terms on which they will make a sale"

They do. But having set the (wholesale) price, and made the sale they have no business telling the buyer what they can sell it for.

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AsI posted yesterday in another story:

The DOJ's Own PDF file Undercuts Their Case

But I guess nobody here bothered to read it. Ironically the key line is sandwiched between their highlighted quotes:

So even before Apple got on the scene, some booksellers were starting to withhold books from Amazon.

Essentially, the publishers realized they were being bled dry by Amazon and were looking for a way out. Jobs gave it to them. This suit is Bezos or his buddies trying to get even, and because the publishers already been bled out so much they didn't have the cash necessary to defend themselves from an intense government onslaught.

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Re: AsI posted yesterday in another story:

This suit is Bezos or his buddies trying to get even, and because the publishers already been bled out so much they didn't have the cash necessary to defend themselves from an intense government onslaught.

Correct.

Let me quote here from the public letter John Sargent (CEO of Macmillan) wrote to his suppliers (authors, illustrators, and editors):

Today we agreed to settle our case with the DOJ. We settled because the potential penalties became too high to risk even the possibility of an unfavorable outcome.

...

Our company is not large enough to risk a worst case judgment. In this action the government accused five publishers and Apple of conspiring to raise prices. As each publisher settled, the remaining defendants became responsible not only for their own treble damages, but also possibly for the treble damages of the settling publishers (minus what they settled for). A few weeks ago I got an estimate of the maximum possible damage figure. I cannot share the breathtaking amount with you, but it was much more than the entire equity of our company.

I like to believe that we would win at trial. But outcomes are hard to predict with certainty, particularly in a civil case with a low burden of proof. And so we agreed to settle with no admission of guilt.

Macmillan is part of Holtzbrinck group. Worldwide, their turnover is less than 3% of Amazon's. Indeed, the entire publishing industry combined in the United States has a turnover of less than $20Bn/year, compared to AMZN's $50Bn+. (Amazon sell a lot more things than just books.)

The shark is suing the sardines for refusing to stand still and be eaten.

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The law.

A few posters here are implying that the DOJ's job should be to help small companies against big ones, or newcomers against monopolies, or something like that. It isn't. There is, quite simply, a law against price-fixing. If a group of companies form a price-fixing cartel, it's just as illegal regardless of whether they're bigger or smaller than the companies outside the cartel.

It is of course possible that Amazon have lobbied the DOJ to pursue this case, but, if so, they shouldn't have had to, and the DOJ (if they're doing their job) should have done it anyway.

As for the effect on consumers, compare the price of a dead-tree book in the UK, where Waterstone's broke the Net Book Agreement, to the price in Australia, where they still have something like that in place.

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Re: AsI posted yesterday in another story:

Charlie, thanks for several excellent and highly informative comments.

Are your books available digitally anywhere with similar conditions to Baen? Just wondering, because i'm a sci-fi reader who is flat out room for paper storage, but I'm voting with my feet on companies trying to lock me into their preferred ebook reader format.

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Re: The law.

Nope.

There's a law against forming a cartel to conspire to fix prices. But you have to prove actual conspiracy to make that case. What the record shows so far is that the publishers were already pulling out of having Amazon in the price setting chair. Jobs gave them an alternate means of selling the books. They liked his deal and offered the same deal to Amazon. At no point was meeting and collusion required to make these changes. So far nothing DoJ has shown proves there was a meeting and collusion at the meeting. Even in email conversations. And that's the point the DoJ needs to prove, not that everybody wound up selling at the same price.

The market determined what the price was. In fact, each publisher sets the price for each book they sell. Any of them can change it. And Amazon could offer a different agency agreement to the publishers if they were willing to do so. Something like:

0-3,000 copies $12.99 with 30/70 split

3,001-10,000 copies $11.99 with 25/75 split

10,001-30,000 copies $10.99 with 20/80 split

30,000+ copies $9.99 with 18/82 split

Playing with the copy structure, pricing, and splits as they see fit. Also, any of the publishers could do so to undercut their competition.

Granted, the same pricing structure would immediately become available to Apple and anyone else with an MFN clause, but if your optimization is for mass distribution you can play to your strength and offer a better price.

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Thanks Mr. Stross,

I think the paragraph about the size of the damages being threatened, and the way in which the DoJ has conducted itself prove that this isn't about monopoly or cartel pricing, it's about shaking down private companies for politically well connected friends.

Nobody in this case except maybe Apple has the cash reserves to go up against the DoJ and win (and even for Apple it is maybe 50/50). So they picked off the smallest fish first. Which upped the price for the rest of the fish. Then they moved to the next smallest fish, and so on until only the big fish was left. And everybody assumes that because the small fish had to submit to the DoJ protection racket that they were guilty of the crimes claimed even though the settlement explicitly said there was no admission or claim of guilt.

Full Disclosure: The only Apple product I own is a refurbished iPod bought at a major discount on Woot (6+ years ago) . It mostly collects dust on a shelf. I currently have no intention of owning more Apple products. Generally speaking I prefer PCs. But I will defend their right to compete in the free market without government intimidation. Even if Jobs was a bit of a fascist leftist himself.

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Re: The law.

You are arguing that the DOJ should lose their case, based on the facts so far presented in court. Fair enough. But I was responding to the people who apparently believe that the DOJ should never have brought the case at all because Amazon have more money than Harper Collins, which is a different thing entirely.

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Re: The law.

The thing about cartel's is they are kind of accepted if you pay enough to the politicians.

Amazon are probably one of the few companies left that in serving their best interests also end up serving those of the customer.

Google was also like that for quite a while but is not any more.

No respect for publishers who charge £8.99 for something that is now completely out of copyright and stop fans of the work from offering free versions on the same store. Amazon doesn't object to that happening.

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Re: The law.

"The market determined what the price was. In fact, each publisher sets the price for each book they sell."

What?

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Re: AsI posted yesterday in another story:

"But I guess nobody here bothered to read it. Ironically the key line is sandwiched between their highlighted quotes:

So even before Apple got on the scene, some booksellers were starting to withhold books from Amazon."

The booksellers were windowing some eBooks, which is a common practice when it comes to different formats of media (DVDs well after the movie, TV well after the DVD, Audiobooks after the print). There is no evidence the publishers colluded to introduce windowing, which is a common practice.

"Essentially, the publishers realized they were being bled dry by Amazon and were looking for a way out. Jobs gave it to them. This suit is Bezos or his buddies trying to get even, and because the publishers already been bled out so much they didn't have the cash necessary to defend themselves from an intense government onslaught."

This is your best laugher yet. The publishers were making MORE money under the wholesale agreement than they were under the agency agreements. Amazon was paying them a wholesale price above the sale price, and because the retail price was lower, the books likely sold more copies. If anyone bled the publishers dry, they did it to themselves.

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Re: The law.

"There's a law against forming a cartel to conspire to fix prices"

Correct.

"But you have to prove actual conspiracy to make that case."

Not correct. If this were a criminal trial, you'd be correct, but since this is a civil trial, proof is not necessary. The DoJ simply needs to show a preponderance of evidence of a conspiracy.

Basically the DoJ is simply going to attempt to show that all these coincidences of every named publisher switching to a new pricing model at the same time could not be a coincidence. It is going to stack all its points like a deck of cards and hope that deck eventually topples.

Personally, I don't see why Apple doesn't settle. The publishers have settled, which means that even if Apple wins it can't go back to agency with those publishers, as they agreed not to do so for a period of time. If Apple loses, it could see massive damages, as it could liable for the total of itself and all publishers.

Too much risk and little reward.

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Re: The publishers were making MORE money under the wholesale agreement

Assertion without fact.

According to the published information, Amazon was consistently selling the books at a penny below wholesale. That means the only viable outlet the publishers had was Amazon. Mom and pop shops couldn't compete because who'd pay them wholesale + reasonable profit for mom and pop? That closes a significant revenue stream. Now, maybe that doesn't matter if 90% of your revenue is from ebooks. But when the ebooks are competing with the paperbacks, hardbacks, and special collectors editions it's a whole different story especially when the bulk of your profits are coming from those sales.

But then having been involved at least peripherally on the backend of the sales of dead tree books I know a bit more about the actual process than you do.

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Re: The law.

You may only need preponderance of evidence, but you still need that proof. Simply asserting "everybody is charging the same price" does not meet even the lesser standard of preponderance of evidence.

Apple aren't settling for one simple reason: they don't want socialists in government setting the prices of their goods. If they settle, they'll never get to set the prices on their products again.

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Re: The law.

"You may only need preponderance of evidence, but you still need that proof. Simply asserting "everybody is charging the same price" does not meet even the lesser standard of preponderance of evidence."

No, you don't need proof. And the government is not just asserting that "everybody is charging the same price," and I find it hard to believe you think that is the gist of their case. You mentioned that you read the PDF. Are you sure?

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Re: The law.

Oh, and I sent before I responded to your last line, which is your grandest doozy!

"Apple aren't settling for one simple reason: they don't want socialists in government setting the prices of their goods. If they settle, they'll never get to set the prices on their products again."

Apple wasn't setting the prices before! The publishers set them. Do you even know what the settlement would have entailed? It would have, and does now for the settling publishers, give Apple the ability to set prices. In essence, those "socialists in government" did exactly what you wanted--placed pricing control in the hands of Apple.

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Re: DRM

>The publishers fell for the DRM snake-oil

No, the publishers insisted on DRM. I was in the Kindle team at the time and DRM was nothing but a pain to us. However solid you make it, it is cracked in 24h and then it makes a bad news splash. We would happily have ditched it and focused on more relevant customer features but publishers insisted on it (all but one: O'Reilly, which I salute for their clairvoyance - their books are still DRM-free in the Kindle store)

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Anonymous Coward

ebooks in general

I've been an ink-on-paper book publisher since 1977, and I've made a decent living at it. What I've found with e-books is 1) once it is digital, it is going to be stolen almost instantly and you will never make another cent on your book, 2) Kindle/Amazon, et al are NOT your friends, they are in it for THEMSELVES, and if YOU don't make a profit because of their pricing strategy, too bad, 3) as a publisher *I* have to set and control the pricing and discount structure of my books so I can stay in business, 4) wow, gee, you sold 500,000 copies of your e-book but only made $8.27 net on the whole half million after discounts, Amazon's cut, etc. Personally, I'm very, very content to sell "only" 5,000 or so ink-on-paper books a year and make $15 to $20 on EACH AND EVERY copy I sell, and I've been doing exactly that for almost 40 years.

Don't get seduced by the "no cost to publish" model of e-books. The fact that it costs nothing to publish (because it is digital) also means it costs nothing to steal.

Are you writing books to satisfy your ego or are you writing books to make a living? If it is just ego, e-books are fine, Amazon et al will be happy to reap your profits. If you'd like to make a living (or even any money at all) in book publishing, stay on paper and copyright the damn thing so when scanned copies of YOUR book show up on Google you can at least send them a DMCA takedown notice.

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Re: ebooks in general

Balderdash.... Why have I spent thousands over the last 10 years to Baen which has never had DRM??

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Anonymous Coward

Re: ebooks in general

... because you're the only customer not to have discovered torrents?

Do you also pay full price for Sky Movies too?

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Re: ebooks in general

Well, he's not the only customer because I have also made a concerted effort to read my way through Baen's entire collection over the last decade.

If you cared to look, you'd discover that Baen regularly offer the first book in a series free, and you can always read the first third of a book to see if you like it before you buy it. This is fair to both the author, publisher and myself. Oh, and all of their ebooks are utterly DRM free and available in pretty much any format you could ask for including plain HTML that you can read from their website, and you can download them from anywhere at any time.

Freetards are always saying that they don't buy from somewhere because they aren't getting a fair deal, however you do get a fair deal from Baen, so why wouldn't you support them?

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Coat

Amazon is a vast, looming presence

And I wish there were other good sources for ebooks. But most other stores don't provide such good services. And from the self-publishing perspective, Amazon is the best thing out there. I've tried for months now to use Barnes & Noble's new Nook Press, but the truth is it's [not good]. Smashwords is far too complex to be worthwhile. Others are inflexible. Amazon let's you upload an EPUB, and there you go. True, they publish in a proprietary format, but it's remarkably easy.

None of this, of course, addresses the primary point of most comments, which is whether Amazon is a bad guy or good guy in all this. I suspect they're a bad guy (but not evil) with really good services.

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Silver badge

Bah!

I'd have more sympathy for the poor publisher and author if I didn't see the e-book pricing on new fiction brushing the lower stratosphere while a hardback was the only option, and if I hadn't watched it so often change when the paperback version was published (for exactly the same product, remember).

And with apologies to Mr Stross whom I've met, heard read and whose works have formed a good part of my reading, no e-book is worth more than about six bucks unless it pushes Dhalgren/Dune levels of content.

It is purely ludicrous that I can get a current paperback version of a book that took energy and time to make, has artwork and physical materials, and requires physical delivery and storage *cheaper* than the e-version of that same book in which only one of those things is true.

Hell, often I can get a remaindered hardback at half the price people are asking for e-versions sometimes, though I don't like hardbacks for my reading habit because they are too big to be carried on my commute easily. I buy hardbacks when authors are in town so I can have them signed, both as a collecting thing and as a giving back to the author thing. I like paperbacks, and not those hardback-sized whitespace fests the publishers like because they are bigger on the shelves, I mean proper paperbacks that are now derided as "mass market" paperbacks.

Which in turn have started to get taller because publishers think we notice books on a shelf by their size, not by content, word of mouth or previous author experience which I know to be the drivers in my circle of reading friends. So much for my custom-built shelving, sized for the paperback as in print for most of my life and now too small. Oh well.

E-books as they stand are visibly not value for money. From the latest Game of Thrones episode to Starship Troopers, a book written fifty years ago by an author long dead, they are obviously and painfully overpriced. My reluctance to buy them even though I have a Kindle and would lap 'em up under other circumstances is not my problem, but the publishers and ultimately the authors' who have unrealistic expectations of what their product is worth.

And that goes in spades for optical scans of older works which have had no proof reading of the OCR and have had no correction to the markup. I am sick to the back teeth of getting an e-book for which I've paid over the odds in which the text is mangled or misaligned or refers to figures that simply are not there.

I won't even talk about the worth of DRM.

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Re: Bah!

You see the evidence yet fail to draw the correct conclusions.

I'd have more sympathy for the poor publisher and author if I didn't see the e-book pricing on new fiction brushing the lower stratosphere while a hardback was the only option, and if I hadn't watched it so often change when the paperback version was published (for exactly the same product, remember).

Would you buy the hardback at the "super-stratospheric" price if the ebook were available at the same time for the price it eventually has when the paperback is published? Regardless of the answer for you personally, would enough of the market buy the hardback to make publishing the hardback profitable? I'll lay 70% odds the answer to the first question is no. I'd put a year's salary against the answer to the second question being yes.

Like it or not, the hard truth of the publishing industry is that except for a very few superstar authors (Rowley, King, Rice, maybe Michener) your make or break dollars come from the hardback editions. If the ebook kills the hardback, it also kills the publisher.

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Re: Bah!

"If the ebook kills the hardback, it also kills the publisher."

Not entirely true. Ebooks have a higher profit margin than print books of any kind. In fact the publishers are making bank on that new ebook profit margin, as noted in their SEC filings. Where ebooks hurt publishers in that revenue number, which is a consideration to investors; you grow your revenue or you look bad. This is one reason why Amazon, with its razor-thin profits, has stock price increases on growing revenue, while Apple, with its massive profits but slowing revenue, has seen a marked decline in its stock price.

The low price of ebooks makes revenue shrink if volume does not increase to make up the deficit. Unfortunately for the publishers, ebooks gained market share no matter what pricing model was used by retailers. Fortunately for publishers, eventually there should be be a leveling off of ebook growth and a return to revenue growth.

Ebooks are a disruptive technology, so publishers must adjust their strategies. If they expect to keep "business as usual," then that will be what kills them, not ebooks.

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You see the evidence yet fail to draw the correct conclusions.

I answered all your questions involving me and books in my original post. Perhaps you read no further than the paragraph you quoted?

I cannot of course speak for the rest of the reading world.

The issue at hand is that publishers are treating e-books as software when it is to their advantage (licensed content rather than owned) and like a traditional book when it suits them (pricing for non existent paper, glue, storage and trucks to move them).

The reading public as expressed in this lifelong rabid consumer of books will state categorically and for the record that until e-books stop being such an obvious rip-off they are not going to find a ready market in my reader(s). Indeed, e-book pricing has drawn my attention to a market I had not really appreciated until I had the Kindle and began shopping for candidates to fill it up - that of the remaindered at near cost hardback version of what I want to read.

Only the publishers themselves are in a position to calculate what this has done to their bottom line (sell me an e-book at six bucks or a hardback knocked down from 25 to 7? Who loses on the latter transaction?)

Do please blither on about intangibles, but I represent a pretty standard view on how I buy books, which are an important but not vital part of my life. After all, I can get movies over the Kindle too, and I can't read while I'm viewing a movie can I? In light of that little snippet, would any publisher like to do a regression of their sales to postulate where they will be in ten years unless they get a f*cking clue?

I'm sorry our very nice and justly famous author doesn't feel the same way, but making a very good living as an author is a recent and (to judge by various signs I see about me) short-lived thing. I feel bad about that, but I don't see it as my job to keep him in beer by buying overpriced books - and the definition of overpriced is always "more than people are willing to spend" whatever the realities of production cost.

Of course, that makes it a subjective thing, but it always was.

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FAIL?

Amazing to see you here, Charlie.

Dumping is when a good is sold for cheaper than in its country of origin. That's not what Amazon was doing. It was more like those discounted items I pick at the grocery stores every week and that's perfectly legal everywhere I know.

"In what legal looking-glass world does a retailer get to buy product wholesale for redistribution (the standard book distribution deal) but also get to claim to be a software publisher distributing limited access rights to the product on their platform?"

Playstation Network. I'm a member of PSN+. Sony discounts and give away up to 50 games a year. Including titles that retailed for $60 a few months earlier. For a measly annual fee. I paid $40 for the year.

Here in Canada, the Kindle became available late in the game and soon after I bought one, Amazon got straddled with the agency model. The result? I have downloaded several free titles but I haven't spent more than a buck or two on an ebook. I just keep buying cheap trade paperbacks and used books from here, the US and the UK. Do you consider that a win?

Publishers should have set up their own ebook stores and got rid of the middle man. They didn't because they don't know how to implement a DRM scheme they will be not throttle the sales and eventually break on them. Just look how well those digital movie copies work. I haven't found anybody that actually bother with those.

A monopoly is only a problem when the prices are to high, I get MS Office for $10 because we have a site license. That's probably close to what the real price should be. That is a monopoly.

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Re: FAIL?

"A monopoly is only a problem when the prices are to high, I get MS Office for $10 because we have a site license. That's probably close to what the real price should be. That is a monopoly."

Doesn't sound like a monopoly to me. A monopoly has to affect an entire market to be one. In your case, what your company chooses is your business, but if all your corporate peers had no choice but to use MS Office, then you're dealing with a monopoly.

Also, there are different kinds of monopolies. The worst ones are de facto monopolies that come about due to sheer market forces (rather than de jure monopolies enacted by law—those tend to occur with stuff like utilities where competition would result in duplicated infrastructures that are an eyesore if not a risk to the public). These run the risk of becoming self-reinforcing monopolies where even disruption is difficult because the monopoly holder can control the entire chain and create barriers of entry.

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Anonymous Coward

I guess it's a good thing I went early and got a Sony Reader. At least their reader store has converted to ePub. And while ePub CAN have DRM attached, there are...ways around it. I bought a few books from them before, and thankfully the ePub transition didin't affect my status on them, so I could redownload them as ePubs, deal with the DRM and then have them free and clear even as i moved over to Android readers.

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Childcatcher

On the other hand...

,,Amazon are proposing to become a publisher. Will that alter their stance?

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