Apple confirms Amazon ebooks bendover, EU watchdog drops bone Four of the major publishers – Macmillan, Simon & Schuster, HarperCollins and the Hachette Book Group – and Apple have agreed to pacify Eurocrats by changing their electronic book terms. The offer, discussed here back in September, was formally accepted yesterday. The agreement prohibits conditions introduced by publishers in …
My thoughts exactly.
Most people want to be legit about downloading music and books, but the higher you price them the more people will look elsewhere and the more "potential" profits you would lose (not discounting the people who wouldn't pay under any circumstances)
If you keep the price low then people have a legitimate way of getting access to the books they want.
I buy books (as in paper) from Amazon because with free delivery they cost less than the e-books from the same shop ... yes I have to wait a few days, and they take up space, but I get them cheaper and can pass them on to other people to read.
If they can finally discount them then I might actually start buying e-books from them.
How is it bad for the publisher though?
I think the argument is that Amazon will take a hit on costs now to build up a dominant position in e-book selling so that in the future they'll be able to turn back on the publishers and tell them that if they want them to sell ebooks for them then they'd better reduce the prices.
Yes, Amazon might do it. Which I very much hope will push competitors to actually start competing. Right now, despite Amazon tied by "preferred nation" clause and thus forced to keep ebook prices high, Kobo price the same books even higher than Amazon. This is silly and you can hardly blame Amazon if, when allowed to, they start competing on prices.
What we are seeing is actually undead ebook market, kept artificially in such state by publishers who hate the thought of moving profit source from dead-wood-department to electronic-delivery-department. This would upset their business model!
Allowing some competition into the market is guaranteed to do some good - it might even increase Kobo (and other Amazon competitors) sales, if they start competing on prices
But then the publishers can say "no chance" and refuse to stock Amazon, people who then go to Amazon to find the latest vampire porn book featuring dead Pharaoh will have to look elsewhere (B&N?) who also stock the other books they want so they continue to shop at B&N (or another book store) and Amazon run the risk of losing the customer from their entire system.
Amazon will sell books at a loss because it brings people to their site where they may purchase things which give Amazon a small profit, with enough people doing that they will make small profits due to the number of people who buy stuff on their site, if the people are going elsewhere, they are not buying the stuff that make Amazon a profit so I don't think Amazon would want to risk publishers walking away and taking their custom to their competitors.
I think the argument is that Amazon will take a hit on costs now to build up a dominant position in e-book selling so that in the future they'll be able to turn back on the publishers and tell them that if they want them to sell ebooks for them then they'd better reduce the prices.
But the publishers could require the use of an eBook standard and thus if Amazon tried that, the eBook buyers could easily move their purchases to a different reader and/or platform and the publishers could pull the plug on selling to Amazon.
My criticism would be that Apple and it's co-defendants have been given a green light to take control of the e-book market in, at most, 5 years time.
Regardless of who which flavour of deal favours, the one thing which the Amazon version has which the Apple version does not is the possibility of competition. The 'most favoured nation' clause in the Apple deal means that not matter what, no-one can have a better deal than Apple. Why this was allowed to stand is very hard to understand, such a controlling position should not be permitted to be open-ended.
Probably because the market, especially in regards to e-commerce, moves very swiftly. In five years time, Amazon may develop a de facto stranglehold on the market, Barnes & Noble may be able to leverage its B&M business to carve a niche, among other things. IOW, it could change to the extent that Apple and the publishers won't be able to dictate strict terms. Running the agreement for five years also allows new terms to be negotiated later on.
Apple must have their 30%, if Amazon was to sell the same book for %20 or OMG %10 what would you expect Apple to do? Compete?
Maybe once the 5 year deal is over Apple and their publishing buddies can come up with a contract that requires stores to charge more for the paper version then the ebook.
@Spencer
+1, there have been several very decent and balanced pieces from Andrew lately which I greatly enjoy - when he's not tweaking our noses he's got good insight and almost always finds an interesting angle.
I do wonder how many people opened this article, register his name as the author, get prepared to foam at the mouth, and then paused in confusion when they couldn't find any obvious commentard-bait :D
Which is to do nothing about the VAT on ebooks, while giving excuses like:
Well, only rich people can afford ebooks readers.
Its impossible to tell the difference between an ebook and computer software, especially if the ebook has pictures or music in it.
etc,
Then eventually dead tree books will become a luxury item , due to the small number sold/high prices, and be re-classifed as such, and subject to VAT as well.
But there will still be VAT on ebooks as "Well, its too late to do anything about it now".
And another VAT exception will have been entirely eliminated.
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