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back to article Could tiny ebooks really upset the mighty Apple cart?

You wouldn't think that Apple had any problems right now. Its share price is so grossly high that it is ranked as the most valuable company in the world. Fans will queue up in their thousands for the chance to buy its latest iDevice – the new iPad – so much so that there won't be anywhere nearly enough devices in stock to …

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Anonymous Coward

Re: Apple's argument falls down ...

No I don't suppose you would. For you Apple = good; Amazon = bad.

Point me to one ebook on the kindle store which is covered by agency pricing that is cheaper than Apple's store.

There are PLENTY of ebooks cheaper on Amazon that aren't covered by agency pricing but you know that and that's how you're muddying the water.

Publishers are going to lose - they know this, their books carry contingencies for the inevitable loss.

If Apple carries on the way it is then it will get punitive damages applied - certainly in the US, depends on Franco-German US relations in the EU (and they way they're going the EU may just choose to really go after Apple).

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Anonymous Coward

Re: Apple's argument falls down ...

You're again confused Mr Naismith.

The argument is that there is a clause in Apple's agreement that forbids publishers from selling their books cheaper elsewhere.

The model under which those e-books are sold on those other stores is completely irrelevant to this argument. You are the one deep in the mud.

As for Franco-German relations, you couldn't have picked a worse choice since both countries sell their books on fixed price model - you know, the one you hate so much and claim it's illegal in the EU (funny that). In fact Germany is actually worried that digital media will change this century-old tradition.

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Re: Apple's argument falls down ...

"The argument is that there is a clause in Apple's agreement that forbids publishers from selling their books cheaper elsewhere.

The model under which those e-books are sold on those other stores is completely irrelevant to this argument."

Your first sentence is clear evidence of collusion and price fixing.

It seems you are arguing over which murder weapon was used rather than whether the victim is dead, and whether they were killed by the perp.

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Re: Apple's argument falls down ...

Have you checked what pricing model the books are published under?

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jai
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Re: Apple's argument falls down ...

"Your first sentence is clear evidence of collusion and price fixing."

No, his first sentence is saying, there's a argument over whether this clause exists.

If it exists, then it is clear evidence. But if it doesn't exist, then the rest of the evidence might turn out to be just coincidence and hearsay.

It's this clause that everyone keeps talking about, but no one has yet produced an example of, that's the crux to the argument.

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Boffin

US and EU anti-competitive law- BIG difference.

In the US anti- competitive legislation relates to disadvantage to consumers. In the EU anit-competitive legislation tends towards disadvantage to competitors.

The general argument is that the EU legislation defends customers by defending the free market in the long term.

The US argument is who cares about the other businesses as long as the consumer benefits in the short term.

The story of e-books demonstrates just how different these two views are. Who is to say which one if more right?

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Silver badge

Freetard alert!

Google Books (errmmm..Play Book Store?) has loads of free books. Some claim to be only scanned pages but they convert pretty well if you select the "as text" option. I can't foresee myself paying for an ebook.

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Re: Freetard alert!

You could also try ereaderiq.co.uk

It's a regularly updated and searchable list of all the newly free books on Amazon

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Re: Freetard alert!

Thanks. Amazon sometimes has free songs too but I hadn't considered looking there for books.

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Re: Is this a quote or an opinion? Either way it is wrong.

It's not wrong.

You are right to point out that in the short term the publishers didn't lose out because Amazon chose to discount so aggressively, only other book retailers. But it was the publishers that drove the change to an agency pricing model, because they were worried about the long term, specifically how their relationship with Amazon would change as it captured more and more of the market, and how the public's perception of the value of a book would change once everyone got used to the cheap prices Amazon was charging under the wholesale model.

This whole argument first came out publically when Amazon and Macmillan fell out in early 2010. There's lots of good commentary written about it and what it means if you Google for that story.

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Who cares about the publishers?

They had their chance. They could have kick-started the whole ebook thing years before Amazon and Apple finally got the ball rolling in a big way—it's not as if there was a shortage of ebook readers before the Kindle appeared—but no! They had to wait for companies with absolutely no interest in preserving the present publishing model to come up with viable channels for their products. And even then, they resisted.

Why the hell should an author have to pay a cut to multiple middle-men, when they can just go to direct to the last one in the chain? Sure, publishers also do marketing, (although its quality and effectiveness can vary greatly), but a savvy writer can do that too.

This leaves traditional publishers with precious little of value to add. I'm sure they'll continue to sell dead tree versions, but these are eventually going to become niche "collector's edition" affairs, rather than mainstream products.

What we're seeing is the death throes of an obsolete industry model. New models will appear to take its place. I'm more than happy to deal with Apple, Amazon and their ilk directly, for example.

Publishers could do a lot worse than set up their own ebook stores with the advantage of "factory outlet" prices: they wouldn't have to pay a cut to Amazon or Apple for purchases made directly from their own stores, but the down-side would be a smaller selection as rival publishers would have their own such stores. That would leave Apple and Amazon in the position of having to add a margin to those "factory prices", but customers would have the lure of a much wider selection of books available to them. (The two major US comic book publishers already do something like this; each has its own iApp, but they also offer comics directly through Apple's own store.)

I'm not sure how this transitional period will pan out, but it's certainly going to be interesting.

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Stop

Re: Who cares about the publishers?

"Why the hell should an author have to pay a cut to multiple middle-men, when they can just go to direct to the last one in the chain?"

Because most - if not all - authors are not good writers, editors, illustrators, cover designers, typesetters, marketeers and laywers.

Unless your favourite book is a long run of text only with a cover that says "Book" ... the "middle-men" have quite a lot of value to add.

Imagine the "Lord of the Rings" centennial edition without Alan Lee's illustration and the typeset Elfish. There you go.

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Silver badge

Re: Who cares about the publishers?

All of which can be hired.

Typesetting is dead already, especially with ebooks. It's entirely automated except for artistic purposes.

Illustration is often driven by the author anyway - they have a preferred partner to do that. So they could hire them at a percentage.

Cover design usually isn't but should be (how many books have you read where the cover bears no resemblance to anything in the book?

Editing - that is selecting which books a publisher is actually going to take. Self-published don't do it.

Copyediting can be hired easily at quite low rates, ironically made cheap by publishers.

Which leaves marketing and lawyers, neither of which tends to be very valuable these days. When was the last time you saw an advert for an author you hadn't heard of, or a lawsuit against an author of fiction?

Ok, non-fiction may want lawyers.

You forgot the real reason why authors want publishers though - advances. They would quite like to eat while waiting for the first royalty cheque.

Except that advances are getting rarer and worse...

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Silver badge

Re: Who cares about the publishers?

"Sure, publishers also do marketing, (although its quality and effectiveness can vary greatly), but a savvy writer can do that too."

Actually, I suspect this is wishful thinking. Experiments by musicians in the arena of self-promotion suggest that although an artist *can* get the word out, the word goes out only very slowly and to people who are already familiar with the artist's work. I was once quite friendly with a musician who held the distinction of making the most MP3 sales in a certain year (back at the dawn of the buy-by-wire phenomenon). He was immensely popular with those who knew of him, but word spread glacially despite his heroic self promotion on any platform that stood still long enough - Yahoo, MySpace and later Facebook.

Publishers can push the word into areas too costly for an artist themselves to consider - like national papers, the side of a bus or two, a hucking fuge billboard towering over a high street somewhere. Which is why they take such a cut.

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Why bother with E-Books?

I just don't get it. There's little or no price difference, and it's expensive to buy a device with a decent screen that can read them. What advantage do they offer over traditional books, either buying them, or borrowing them from a brick and mortar old fashioned library?

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Re: Why bother with E-Books?

You can carry more with you for less weight, that's what the proponents allage.

Personally, I'm with you on this.

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Re: Why bother with E-Books?

"What advantage do they offer over traditional books, either buying them, or borrowing them from a brick and mortar old fashioned library?"

You can carry more of them, you can't lose them (if you do, there's backup at home!), and when you've read your favourite book to pieces you ... well, it doesn't go to pieces, so you won't have to hunt used-book stores for that out of print goodness.

But paper is nicer.

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jai
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Re: Why bother with E-Books?

e-books for fiction, i agree, the only benefit is that i can carry hundreds of books with me and if i finish reading one while on the train, i can pick and choose which one to read next.

but the real advantage is with reference books. I'm carrying around 12 programming books on my ipad at the moment. These are all 400+ page tomes, there's no way i could carry three of them around in my bag each day.

But i can search for text throughout them instead of having to half remember whereabouts in the book i read something, i can bookmark or highlight useful bits of code or suggested approaches to a problem. I can even copy example code, send it over to my laptop, paste it and test it instead of having to manually re-type it.

so for fiction, i'd say there's as many pros as cons for ebook versus dead-tree. But if you add reference books to that, then it makes sense to buy in to ebooks completely.

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laughable defence

"For example, if Amazon was a “threat” that needed to be squelched by means of an illegal conspiracy, why would Apple offer Amazon’s Kindle app on the iPad?"

Because it knew full well that if it didn't do that then it certainly _would_ get slapped with a giant fine for anti-competitive behaviour. C'mon, Apple, how dumb do you think we are?

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Anonymous Coward

Re: laughable defence

Amazon may offer a Kindle app for iPad .... but haven't they had to modify the purchase procedure (i.e. divert you to the website rather than the "in-app" purchase on Kindle and other platforms) to avoid Apple's claim of 30% of the cost.

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Stop

Re: laughable defence

There never was an in app purchasing procedure for the Kindle app on ipad/iphone. You always had to purchase through the Amazon website.

What changed is there is no longer a link in the Kindle app to the Kindle store.

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Bronze badge

The statement "eBooks are cheaper to produce" is *wrong*.

At least, it is for *new* books. Reprints and out-of-prints are a different kettle of fish altogether.

There was a very nice article a while back (I forgot the URL now) which followed the creation of a new book from the moment the author had The Idea to when the book finally hit the shelves. And by the time you had the author's percentage, the cover designer's fee, the proof-reader's wages, the "this", the "that" and the proverbial "other" accounted into the final cost, the cost of actually printing and distributing a *NEW* book was pretty small in comparison.

Again, I'll emphasise this: for **NEW** books.

Once the book has sold, especially the more modern books which are electronically typeset anyway, then yes; the eBook version is much cheaper to produce than a re-print.

But, like the prototypes for cars and planes, etc..., there is a lot of initial sunken cost in bringing a new product to the market, so there doesn't tend to be much of a saving between Hard-cover/paperback first prints and eBooks.

And no, I am not associated with the book industry in any way, except as an avid reader.

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Re: The statement "eBooks are cheaper to produce" is *wrong*.

Mostly correct.

But the cost for a reprint or out of print book isn't necessarily much less.

The general process goes along the lines of Find copy of book > Scan it > proof read.

At that point the book is at *exactly* the same point along the chain as a new book.

It needs a new cover design, typesetting, layout, marketing etc. You can't often reuse the cover as frequently the original artwork is no longer available, and you can't just scan in a hi-res image of the cover like you can the text.

Anyone who thinks a book doesn't need an editor, typesetter or proof reader has never tried examining one of the dodgy scans or read through the self-published slushpile.

Books from the last 10 years, will generally have electronic copies lying around and can usually be digitised really easily. Older works however will need the full treatment, which is slow, manually intensive, and costs money that takes a *long* time to recoup on a slow selling backlist item.

And this is of course ignoring the thorny issue of exactly who owns the rights to the book, since older works will be for publishers that no longer exist, that have merged or bankrupted. Orphaned rights are supposed to return to the author, but in many cases they didn't so the book never gets reprinted.

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WTF?

10% of worldwide turnover?

If that's 10% of Apple's worldwide turnover from ebook sales, I doubt they are all that worried. Its a tiny business for them, not only compared against their other businesses but also against Amazon's ebook sales.

If its 10% of their total worldwide turnover, including iPad, iPhone and Mac sales, well that's obviously a big concern, but surely even the EU can't have such a ridiculous law, can it? That's like fining GM 10% of their worldwide automobile sales because the cupholders violated some EU law.

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Re: 10% of worldwide turnover?

Well a good competition / market regulating law, must have sizeable and sharp "teeth".

It's called deterrence and it usually works. Otherwise the tradeoff between increased market advantage / establishment vs. Potential fine sometime later, will mostly lead to a rational economic decision to flout the law.

Think parking fines; if they are set just marginally above normal parkibg rates, then people would consciously choose to park wherever they liked and take the risk of the meagre fine.

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Silver badge

Re: 10% of worldwide turnover?

Teeth that large would just discourage large companies from entering any new lines of business in the EU, because one misstep in that new line could result in a fine ridiculously out of proportion to any possible crime (unless the iPad was releasing poison gas and killing people who were using it as a book reader) Your parking example is silly, a better analogy to parking would be charging you 10% of your income if you park illegally. That would just discourage rich people from ever venturing into your city limits, lest they unknowingly violate some local parking ordinance and are forced to write a six figure check.

In the extraordinarily unlikely event that Europe is successful and forces Apple to pay billions in fines you can look forward to reading about a lot of neat stuff introduced elsewhere that is not and never will be available to citizens of the EU. Better hope its companies based in the EU or foreign startups that introduce the new products you desire, because they'll be the only ones willing to take the risk.

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Facepalm

Re: 10% of worldwide turnover?

"Your parking example is silly, a better analogy to parking would be charging you 10% of your income if you park illegally. That would just discourage rich people from ever venturing into your city limits, lest they unknowingly violate some local parking ordinance and are forced to write a six figure check."

Let me list the counts on which I disagree with your argument:

1) Switzerland already has this feature for egregious speeding offences. Didn't stop the world's rich from camping here did it? (For the lulz, here's the link: http://www.bbc.co.uk/news/world-europe-10960230 )

2) "...Lest they unknowingly..." W00t!? Are you seriously saying that anticompetitive practices that would carry the maximum penalty as envisaged by law could be perpetrated by a multi-billion company *unknowingly*!? Not sure whose intelligence this assumption is insulting to, but it's certainly someone's....

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Devil

"...why would Apple offer Amazon’s Kindle app on the iPad?"

I think you'll find that's what's usually referred to as a "figleaf"......

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Bah!

Went to a Kindle at Christmas and speaking from my own experience, eBooks are ridiculously overpriced and under proof-read.

I seem to pay as much if not slightly more than I would over the counter for the paperback version. When the book is only available in hardback, the eBook is priced at aggressive hardback-style prices. I saved 25% recently by waiting for the publication of the paperback *before* I bought the e-book of the same title. Where is the sense in that?

eBooks are clearly a "something for nothing" proposition for book distributors, with little or no thought given to the different paradigm from the purchasers point of view.

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Re: Bah! (Hardback/paperback/ebook)

Books are released in phases. First imprint is the primo hardback version, and costs a fortune. Some of that is due to the cost of it being hardback, most of it is to capitalize on the desirability of the book - it's the only option available, and hence if you want it, you got to pay.

Once they've made as much as they can from the hardback (read, sales dry up), the second imprint is made, this time in paperback. This is much cheaper.

So, when the book is in its hardback phase, the ebook must be of a similar price, or sales of hardback will suffer, and the publisher won't make any/enough money. Once the book is in the paperbook phase, the ebook doesn't need to be priced so highly.

tl;dr - If you want to read a book right after it is published, it's going to cost you.

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Silver badge

Re: Bah! (Hardback/paperback/ebook)

Your argument only makes sense from a paper book model. It makes no sense whatsoever with an eBook. There is no extra overhead to justify differential pricing.

eBooks remain overpriced and under-prepared. They cannot succeed the way they are being sold, which is the point. Dead tree is still the preferred sales model.

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Anonymous Coward

Don't you just HATE LIARS!

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