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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  1. g e

    Painted into a corner

    Doesn't look too good for any of them and trying to prove that they all decided independently on the same thing at the same time and then told it to Amazon is going to take some professorial trick-cycling.

    Popcorn please!

  2. Anonymous Coward
    Anonymous Coward

    Too bad its only "reportedly"

    "We told the publishers ... you set the price, and we get our 30 per cent, and yes, the customer pays a little more, but that's what you want anyway," Jobs reportedly said

    If they could clearly attribute that statement, it would make it a lot easier to find them guilty.

    What Apple had to gain was 30% of the eBook market revenue.

  3. Semaj
    Thumb Down

    'But we had nothing to gain'

    Most normal people don't know the difference between an iPad and a Kindle and if they are going to be buying something to read books they will consider both. Their argument is obvious BS.

    1. Tom 38
      WTF?

      Re: 'But we had nothing to gain'

      The only BS is claiming that people can't tell the difference between a monochrome, keyboard enabled, non touch kindle and an ipad.

      1. Eddy Ito
        Facepalm

        Re: 'But we had nothing to gain'

        "The only BS is claiming that people can't tell the difference between a monochrome, keyboard enabled, non touch kindle and an ipad."

        Clearly you haven't been paying attention so here you go.

  4. Desk Jockey

    Pity this did not happen before

    It is good to see the e-book market is being properly scrutinised to ensure it is competitive and free of price fixing.

    Pity the same was not done for the music and movie industries a while back, hmmm?

    1. Anonymous Coward
      Anonymous Coward

      Re: Pity this did not happen before

      Whatever about movies, hasn't the price of music singles and albums been declining constantly over the last few years? Ten years ago a single cost ~£4, now you can often buy the single for <£2 and the title track for <£1. If not a function of competition, where is the price pressure coming from?

      1. Rob - Denmark

        Re: Pity this did not happen before

        Price fixing == same price at a given time != same price all the time.

      2. Desk Jockey

        Re: Pity this did not happen before

        There was no competition, that was the point. No matter which shop you went to, all the CDs cost the same because the shops had to play ball with the publishers who all agreed (legal partlance - colluded) on the price.

        The price went down when people began downloading free copies on the internet on mass. Competition did not do it, new technology did. Apple, to their credit, changed the rules of the game with the Ipod, but not after having to sort of play to the same rules for a while. It should have not happened this way, the EU/US should have slapped the music publishers to allow price competition, like they are doing now with ebooks.

        What this case shows is that Amazon played competitively (agressively so but it is within the rules) and anyone else is allowed to do the same, but Apple attempted to set the price with the publishers who in turn tried to dictate that model to Amazon. If everyone starts to set the same prices, you have effectively little to no competition.

        1. Anonymous Coward
          Anonymous Coward

          Re: "on mass"

          The term you were looking for is "en masse".

          http://en.wiktionary.org/wiki/en_masse

  5. Jeebus

    I wonder if Amazon are powerful enough to run this over the try line or will Apple and co. do what they always do and buy their own "justice" even though they are guilty.

    1. Captain Save-a-ho
      Alert

      Well, actually...

      Apple and the publishers may settle with the US and EU regulators (its in both sides best interests), but I can't see any way possible that they'd be able to settle the class-action lawsuit. In the end, Apple and the publishers will pay a lot of cash and, more importantly, will suffer tremenously in their public reputations.

      There's no real way to justify their actions on any level. Anyone with even a rudimentary knowledge of US antitrust law can see this as agreements "in restraint of trade". Could be bad news too, since Apple used their dominance in tablets to push their deal through with the publishers. Double ouch.

      1. Anonymous Coward
        Anonymous Coward

        Re: Well, actually...

        Can you explain how there's any actual restraint of trade? Do you know what that means?

        There was never any limitation that books could only be sold on Apple devices if that's what you are thinking. Apple had 0% marketshare in books at the time of the agreements, do you think publishers would go exclusively with them?

        Perhaps you shouldn't comment based with such rudimentary knowledge of US antitrust law, and the industry in general.

        1. Chet Mannly

          Re: Well, actually...

          "Can you explain how there's any actual restraint of trade? Do you know what that means?

          Perhaps you shouldn't comment based with such rudimentary knowledge of US antitrust law, and the industry in general."

          Nice smug view from your hair-splitting high horse?

          Not restraint of trade, price fixing and collusion - if true (and the EU's position does sound awfully like they already have enough evidence to convict) its clearly in violation of antitrust law.

      2. Anonymous Coward
        Anonymous Coward

        "Apple used their dominance in tablets"?

        "Apple used their dominance in tablets to push their deal through with the publishers."

        Apple launched iBooks with the iPad. They had no dominance in tablets when they did these deals.

        1. Chet Mannly

          Re: "Apple used their dominance in tablets"?

          "Apple launched iBooks with the iPad. They had no dominance in tablets when they did these deals."

          The deal under scrutiny is the last one that Steve Jobs signed for Apple before he tragically became too ill to continue as CEO.

          Apple most definitely had a dominance of the tablet market at that stage.

  6. Anonymous Coward
    Anonymous Coward

    Evidence please

    Can you please point to an example of Apple "buying justice"?

    1. Anonymous Coward
      Anonymous Coward

      Re: Evidence please

      Practically no-one can defeat Apple in a patent dispute. These things are virtually never won on the basis of who is right or wrong, but on how much money you have.

      Which is why so many people think the patent system is so broken especially in the US.

      That's as good an example as I can think of.

      1. Anonymous Coward
        Anonymous Coward

        @skelband

        So you have no evidence therefore Apple must be guilty. Can the hating get any more blatant & pathetic!

    2. ElReg!comments!Pierre
      Joke

      Re: Evidence please

      Well, they sure never have been found guilty of buying the judge, if that's what you mean...

  7. Anonymous Coward
    Anonymous Coward

    Pure evil

  8. Anonymous Coward
    Anonymous Coward

    Price of e-Books already gone down

    No, not because of any competition issue, but because at the beginning of the year the VAT on e-books dropped from 15% to 3% (both Amazon and Apple have their media sales units located in Luxemburg to get this "break")

    But don't get the fireworks out yet, in 2015 the VAT on digital media will have to be charged at the rate of the consumer's - not seller's - country. If the UK is still applying 20% to e-books by then prices will go up again.

    For now not sure why are people still complaining though, aren't e-books cheap enough already? Looking at both Amazon and iBooks many of the books on the top charts cost only 99p.

    1. Irongut

      Re: Price of e-Books already gone down

      Don't know what books you're looking at but all the books I've bought in the last year the eBook version was roughly the same price as, and in a few cases more expensive than, the dead tree version. That was one of the reasons I haven't bought any eBooks.

      Mrs Iron has bought cheap eBooks recently but they were all either by long dead authors like Jane Austin or chick lit books that were also cheap in dead tree format.

      1. Anonymous Coward
        Anonymous Coward

        Re: Price of e-Books already gone down

        I'm looking at many books on the top charts. Examples:

        Number one seller on the iBookstore, "Confessions of a GP" by Benjamin Daniels.

        £0.99 on iBookstore or Kindle, Amazon Paperback £5.75

        Number one on physical books "Before I Go to Sleep" by S.J. Watson

        Kindle £2.39, iBookstore £2.99, Amazon Paperback £3.85

        Sure some digital books are more expensive than the heavily discounted paper ones, but you can already find very good bargains in the digital side of things.

        1. Anonymous Coward
          Anonymous Coward

          Re: Price of e-Books already gone down

          Er, I think you'll find that those 'best sellers' are top of the digital charts because of their low price. The prices are that low because they are currently on special offer. You couldn't pick a more loaded selection to back up your point. On a related note, do you only read what the 'charts' tell you to read?

          Instead look at the prices on a wide selection of books chosen at random, not the ones being heavily promoted by publishers and merchants alike with heavy discounts. The reality is that most the time the digital versions are barely cheaper than the paper versions, albeit still cheaper, however there are still many cases where they are in fact more expensive too. Even when it's cheaper by 20-50p can that really reflect the difference between the digital and paper versions? The latter requiring printing, paper and physical distribution to homes and stores plus you can lend the paper copy to a friend or sell it on the second-hand market. There is clearly added value in the paper copy that isn't reflected in the price.

    2. Roger Varley

      Re: Price of e-Books already gone down

      So, has any one got a list of Luxemburg proxies?

  9. Mad Hacker
    Mushroom

    Isn't Product Dumping Illegal?

    In a prior life I used to design cars in Detroit. Just a little before my time the Japanese got in trouble for "dumping" mini-vans. This basically meant they were selling them below cost to break into the market. This was illegal. (source: http://articles.latimes.com/1991-12-21/business/fi-528_1_officials-rule)

    So how can Amazon sell the Kindle or eBooks for less than cost and have it NOT be illegal dumping? In fact, how can Sony and MS charge less for their PS3 and XBOX 360 and also have it NOT be illegal dumping?

    1. Oninoshiko

      Re: Isn't Product Dumping Illegal?

      Cars are not Books.

      With books it is a loss-leader. The idea is to use a below cost item to get you to go somewhere and convence you to ALSO buy enough other stuff to still profit. This is a long-held and common-place (legal) marketing tactic.

      Auto distributors cannot clam to be doing this though. It would be a idiotic."oh we where selling the minivan below costs to get you to also by the sports car! Ergo, dumping, not a loss-leader.

      1. Anonymous Coward
        Anonymous Coward

        @Oninoshiko

        A loss leader for what since both the Kindle AND e-books were being subsidised.

        1. Oninoshiko

          Re: @Oninoshiko

          Presumably, for some of the books which are not being subsidised.

          (off the topic of this thread, but something about this that bothers me)

          The reality is, the arguement of collusion is somewhat silly. It assumes that all books are equivlent, this is clearly not the case. There are a number of works I would hold as great prose and important ideas, there are others I wouldn't accept to use as heating material. (I leave sorting what is in what catagory as an exersize to the reader).

          "The DaVinici Code" isn't "Harry Potter" isn't "The Foundation" isn't "The Fountanhead" isn't "A Midsummernight's Dream" isn't "Das Kapital"

          You want to solve the problem of monipolistic behavior in publishing, fix copyright.

      2. Jedit Silver badge
        Headmaster

        Selling the minivan at below cost to get you to buy the sports car

        A better analogy would be to say that if there existed a car manufacturer that also sold fuel, it would be legal to sell the car at below cost if it would encourage you to buy the fuel. A Kindle without content to read on it is almost as useless as a car without fuel.

        1. Oninoshiko
          Holmes

          Re: Selling the minivan at below cost to get you to buy the sports car

          "A better analogy would be to say that if there existed a car manufacturer that also sold fuel, it would be legal to sell the car at below cost if it would encourage you to buy the fuel. A Kindle without content to read on it is almost as useless as a car without fuel."

          Or if there was a razor manuafacturer who gave away the razor to get you to buy bla...

          Oh, wait.

  10. frank ly

    "... a settlement is effectively an admission of guilt ..."

    Is it? If you can demonstrate a clear cost-benefit for settling over fighting a case, then it's your duty to reach a formal settlement for the benefit of your shareholders. In the accounts, it can be noted as 'Protection payment to a bunch of Euro-trash gangsters (unavoidable cost of doing business)'

  11. DrXym

    The radical answer

    Enact laws which define digital property and mandate industry standard DRM and formats to regulate the content. The digital content should have properties akin to physical property, e.g. first sale doctrine, fair use and so on.

    Then Apple can tie their devices to their bookstore but it does not prevent users from moving their books between devices, or buying them elsewhere or even selling / loaning them if they feel like.

    It's eminently achievable and arguably should extend to all forms of media - books, music, pictures and video. It would have to be protected by a DRM but one which isn't lopsided, protecting the rights of the publisher but not the user.

  12. Anonymous Coward
    Anonymous Coward

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

    "This was the point at which the publishers and bookshops were screaming that Amazon was undercutting them, destroying the publishing world and robbing authors of their fair due."

    Wrong.

    Amazon only affected the profits of bookshops - nothing to do with 'fair dues' of authors at all - if anything the authors got more money (as their income is based on the numbers of units shifted and Amazon shifts more). The price Amazon sold books at had no effect on the price they paid to the publishers and hence authors - the publishers got the same return if amazon sold for $1 or $100. The only people who moaned about amazon were the waterstones/smiths of this world (i.e. the brick and mortar bookshops). Don't make it sound like amazon are bad for authors - quite the opposite.

    1. Oninoshiko
      Thumb Up

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

      What did this AC get neged for? It's a pretty well thought out responce. Just because it's not convienent for your world-view doesn't make it a bad post.

      1. kode
        Angel

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

        Oh it's just the Apple fanboi way: every Apple's competitor is the enemy, and like a true fundamentalist believer you have to try to bring the enemy and the people speaking for it down. Jobs, in his true narcisisstic manner, was really good at it, and the fanbois think it's their duty as well.

    2. Anonymous Coward
      Anonymous Coward

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

      Except Amazon created a scheme that pushed price of e-books to be less than $10.

      If publishers priced their e-books at $9.99 or lower they'd get 70% royalties of sales (less download fees) however publishers selling e-books priced above this only got 35%.

      So publishers would get the absolutely the same from a book priced at 9.99 or one priced at 19.8 - in both cases they'd make $6.9 revenue. To charge more they'd have to go higher than 19.8, thus the scheme only encouraged very cheap books.

      Amazon also required that e-books be priced at 20% less that the paper version, to get the higher the royalty.

      See: http://arstechnica.com/gadgets/news/2010/01/some-authors-still-split-on-amazons-70-royalty-offer.ars

      These actions are what publishers got afraid of.

      1. Chet Mannly

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

        "Except Amazon created a scheme that pushed price of e-books to be less than $10."

        iTunes created a scheme where music was U$99c against the music industry's wishes - what's the big deal?

        "Amazon also required that e-books be priced at 20% less that the paper version, to get the higher the royalty."

        Seems pretty reasonable given there's no dead tree to distribute - no printing, no transportation etc - reckon those would be more than 20% of costs.

        Neither of which justifies illegal price fixing so that consumers pay more - its just Apple trying to avoid competition.

        1. DrXym

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

          "iTunes created a scheme where music was U$99c against the music industry's wishes - what's the big deal?"

          The "big deal" is I might be writing a book for a limited audience and I need to price the book higher to recoup my costs. I might decide that $40 is a good price for my book (and there are plenty of real books that cost $40), yet I only get $14 royalties and the rest goes to Amazon. Or Amazon could shaft me by dropping the price to $20 and then I only get $7. Or maybe they sell it for $10 *anyway* and give me $3.50 instead of $7 which I was due if I had priced that way in the first place.

          Basically it's designed to force authors to set their list price to what Amazon wants to sell books for, not what the author would like even if they have good reason. If an author were selling a real book with an ISBN they could set any wholesale price they like and it would be up to the retailer to put a margin on top. In the electronic model it is the author who gets screwed.

          1. DrXym

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

            I see from the few thumbs down that some people really have no clue. The ways that Amazon & Apple hurt authors are right there in the terms and conditions they require them to agree to.

      2. Mahou Saru

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

        Err there is a slight difference between a publisher and author.... In regards to your post neither publishers or authors have to sell via Amazon. What the big 5 publishers have done is to remove a cheap option from the consumer for _their_ books

    3. LPF
      Thumb Down

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

      Amazon is bad for Authors in that they have destroyed outlets that distributed a range of books, what happens then is that when you have the book distribution industry sewn up as your the only game in town , you can then tell the publishers , that you either get a discount, or they dont get listed.

      Seriously you are so naive , you had to have someone tell you this???

    4. DrXym

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

      Amazon *are* bad for authors in a lot of cases, especially direct publishing. Look at their direct publishing terms. If you publish a book on Amazon and set a list price then Amazon can discount your book all the way down to nothing of its list price and screw you if you don't like it. It's at their sole discretion what price they sell for. It's not like physical books where Amazon buy books at a wholesale price and you get the same amount regardless of the retail price.

      They don't even have to do it because lowering the price sells more copies. They might do it to hurt a competitor. e.g. they see your book at $8.00 on B&N so they sell it for $7.00 on Amazon. You as the author have no say in this and you end up with less money.

      So perhaps the incentive is for authors to overprice their books to mitigate the effects of discounting. But if you price your book over $10 you get whacked with a royalty rate of only 35% instead of 70% so the incentive is not to do it at all except for specialist titles.

      So either way you lose. It's a hideously lopsided contract and you are on the losing side.

  13. Anonymous Coward
    Anonymous Coward

    Single opinion

    Perhaps this article is too much of a single lawyer's view of the problem, and makes me wonder if there's any conflict of interest from other companies who get legal advice from Taylor Wessig - I know they have worked with Google in some deals.

    The fact is in other European countries such as Germany (and several others) the fixed price model for books has been in practice (by law, even) for over an hundred years and the industry is thriving - latest stats show Germany publishes 90,000 new books a year from 20,000 publishers in 5,000 booksellers. It's a scheme that is even protected by the European Union!

    Is it really better - from a market competition view - to let Amazon run their predatory pricing until only they can sell e-books?

    I'd love if The Register could get other opinions into the article.

    1. Anonymous Coward
      Anonymous Coward

      Re: Single opinion

      Aren't Germany's, like France's, laws on book retailing explicitly protectionist though? Hardly makes the case that the alleged collusion was in the interests of consumer!

      1. ZweiBlumen
        Thumb Up

        Re: Single opinion

        Yes, they protect the little book stores. Which is the whole point of the laws. There's far more little bookstores in Germany than in the UK where in most cities you only have Waterstones and Bord... oh wait, just Waterstones in fact.

        1. Anonymous Coward
          Anonymous Coward

          Re: Single opinion

          I don't see why consumers should pay more to protect uncompetitive business models.

  14. SImon Hobson Bronze badge

    Apple's argument falls down ...

    ... on the simple question of ...

    Why do they need a clause prohibiting the sale of a book cheaper elsewhere ?

    The answer is simple, if it's cheaper at Amazon, then people will buy from Amazon and use the Kindle App - and Apple gets nothing while people are building up a library of non-Apple books. Such customers will have little reason to stay with Apple if they find another device they prefer.

    By ensuring Amazon can have no price advantage, they can punt books to users who will see no incentive to go outside of the iTunes store. Thus punters will build up a library of i<whatsit> only material and so will be less inclined to go elsewhere in future - they will find that they cannot take their iBooks to any other device.

    This is all about capturing customers and trapping them inside a walled garden so that they are less and less able to spend any of their money with competitors - that clink, clink noise is that of more bricks being stacked on the wall.

    1. Anonymous Coward
      Anonymous Coward

      Re: Apple's argument falls down ...

      I keep hearing about this supposed clause yet never seen a factual source for it.

      It doesn't help that when I go look at both stores there are several Kindle e-books on Amazon available at lower prices than on Apple's iBookstore (and vice-versa)

      In the real world it's not what's happening.

      1. Anonymous Coward
        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).

        1. Anonymous Coward
          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.

          1. Chet Mannly

            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.

            1. jai

              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.

      2. Mahou Saru

        Re: Apple's argument falls down ...

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

  15. OutwithReality
    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?

  16. Craigness

    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.

    1. Martin 47

      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

      1. Craigness

        Re: Freetard alert!

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

  17. idiotsavant

    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.

  18. Sean Timarco Baggaley

    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.

    1. Windrose
      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.

      1. Richard 12 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...

    2. Stevie

      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.

  19. Benjamin 4

    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?

    1. Oninoshiko

      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.

    2. Windrose

      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.

      1. jai

        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.

  20. AdamWill

    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?

    1. Anonymous Coward
      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.

      1. Tom 38
        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.

  21. Neoc

    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.

    1. Mayhem

      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.

  22. Anonymous Coward
    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.

    1. Turtle_Fan

      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.

      1. Anonymous Coward
        Anonymous Coward

        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.

        1. Turtle_Fan
          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....

  23. TeeCee Gold badge
    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"......

  24. Stevie

    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.

    1. Tom 38

      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.

      1. Stevie

        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.

  25. Anonymous Coward
    Anonymous Coward

    Don't you just HATE LIARS!

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