Apple, Penguin Group, and MacMillan Sued by DOJ

[Kelli Wheelwright]

It was in process, but now it has happened

http://ekfamilybooks.blogspot.com/2012/04/department-of-justice-sue...

 

 

I would love to hear your thoughts! Do you think this is a good thing? Did you like the Agency Contract?

[Kelli Wheelwright]

Interesting article. There are a few corrections to be made though- the law suit is only against Apple and 2 of the Big 6.

 

Certainly the book industry is changing, thankfully some of the local independent bookstores are finding new ways to market themselves to stay in business. There is no denying that the industry is changine, just as Apple changed the music industry- hopefully compromises can be made that overall benefit the public though. Fixing eBook pricing is not a solution I will get behind.

[Grace]

I think that it's ridiculous that the prices of even backlist titles are more than the price of the same book in Mass Market Paperback.  Setting the prices as high as they are is ridiculous.  That being said, I can definitely understand publishers wanting more control over pricing, because a lot of the overhead costs involved with publishing don't go away when switching to e-book form.  There's got to be a happy medium that doesn't involve Amazon controlling everything, but at the same time allows e-books to be an affordable option for readers.  If e-books aren't affordable, people will just pirate them instead.

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Books Without Any Pictures

[Kelli Wheelwright]

It wasn't an issue for Apple to have an arrangement with the publishers alone, what made it illegal was that they then forced Amazon to sign in on the same agreement- the flat 30% profit rather then being able to choose their own listing price for the ebooks.

 

Amazon initially said no, but then publishers like Macmillan said they would no longer sell their books on Amazon if they didn't comply.

 

Here is the full coverage of the initial issues with the Agency Contract  http://ekfamilybooks.blogspot.com/2012/03/possible-law-suit-for-5-o...

[Kelli Wheelwright]

The reason the DOJ didn't press any charges against Amazon over the App Day was that they didn't have a case. It isn't illegal to offer insanely low prices. It isn't illegal to choose to not have a profit or to lose money on a product for a day. It isn't illegal to give away gift cards in order to encourage sales on your own site. Its a marketing stratagy to prove that they can be competitive with other Apps. Just like Best Buy will guarantee the lowest price on a specific object, just like my local carwash will take its competitors coupons- they are marketing stratagies- regardless of if you find them fair or not, they are not illegal.

 

As far as Amazon pulling Macmillan's books- The only time I am aware of that happening was when Amazon would not sign the Agency contract, Macmillan tried to strong arm them and pulled their own books from Amazon until they complied and signed the Agency model contract.

 

Bottom line, Apple wants in on this market- unfortunately they dont have the best product this time and they aren't willing to cut their profit margin. Yes, you can use the Kindle app on an iPad and you can't use iBook on Kindle- again that speaks highly of Amazon's design of their device. They are not requiring you to purchase a Kindle to receive their books. Its a good business model, hence why they hold over 50% of the eBook market. BUT they are not the only one- Nook holds 25% of the market now as well.

 

It all comes back to consumers and what they demand. You can't blame Amazon for having the best product available. If you do, then you have to blame Apple for having the best mp3 players, for changing the music industry, and monopolizing that market.

[Kelli Wheelwright]

How does Kindle creating a free app that can be used on the iPad, desktop computer, or laptop mean that Kindle is exclusive? If it was exclusive then you wouldn't be able to purchase an Amazon eBook for any device other then Kindle.

 

If it was exclusive it would be like iTunes that only works with an iPod, no other device. With the Kindle app you have options of which device you prefer to read on. I appreciate that because it means consumers have a choice. Do you want to read on a back lit tablet, your phone, an eInk display device? If anything it is diverse in its flexibilities.

 

Apple is infamous for creating exclusive content and software that can only be used on their devices. They are infamous for monopolizing markets, but it seems that in the eyes of the public they can do no wrong.

I don't know anything about Amazon's supposed past grievances- but what Apple attempted with the Agency contract was complete collusion. It isn't fair to consumers and it isn't fair to retailers who should be able to set their own profit margin.

[Kelli Wheelwright]

I disagree. No you can't read other books on a Kindle device, but I think what makes Kindle diverse is that you don't have to have a Kindle at all. There are choices, if you want to buy a Nook, an iPad, a Kindle, or any other brand eReader you are welcome to. Amazon does not require you to purchase their device in order to benefit from their book prices. With their free app that is available to everyone, you are not required to purchase their exclusive reader.

 

As for the Agency - What publishers do with authors is a seperate issue. That is done on an individual contract basis. I see what you are saying though. The problem with the agency contract is that they were forcing the hand of retailers. In the old standard of selling books to retailers, retailers would purchase the book from the publishers at a decreased cost (wholesale which is generally about 50% of the price of the book). Then they are able to sell the book, which they now own, for whatever price they choose. It doesn't change the profit that the publisher receives. That is what they were saying about Amazon, that they were promoting some books at prices so low that Amazon was losing money on the sale (not the publishers, just amazon). The Agency Model Contract set a fixed profit margin for the retailers. Which allowed Apple to make sure that Amazon was not lowering thier sale prices too much and insured that they had a fair chance to sell their books at the profit that they wanted. Unfortunately, it also made sure that the prices for the consumer went up.

 

Really do you think an eBook should be just as expensive as a Hard Back copy of a book? I can't take my eCopy in to be signed by the author, it can't be displayed on the shelf, or easily sold or donated when I am done with it. Its a different market altogether and publishers need to find a way to properly value that product.

[Kelli Wheelwright]

I did hear about that, again not illegal. What we are talking about in this thread is the law suit and the changing publishing market.

 

How do you suppose publishers keep up with the inevitable changing markets? Do you think another type of Agency model is the only hope for the future of books (a flat profit rate)? I'd love to hear your opinion on where you think the market will go. You seem to have been following this subject for quite some time. Since you are self published, do you think that the Big 6 will soon be a thing of the past?  

[Kelli Wheelwright]

I completely agree that their should be changes that favor the author. I also agree that it would be near impossible for these changes to be made. I don't have the answers, unfortunately I dont think anyone does at this point.

 

Apples Agency model was not a good solution though. I hope this will send them back to the drawing board because I think Apple is full of people with great ideas. I just hope they come forward with a better one next time that is good for both consumers and publishers.

 

As to your articles... who is that that said "What we learn from the past is that we have learned nothing from the past"? History seems to always repeat itself, when are we going to learn?  

[Grace]

It's pretty much a textbook case of collusion to set a higher price than the market, which is very much illegal.  It's not a crime to offer another outlet for e-book sales.

[Kelli Wheelwright]

Interesting article, but that pulls into a whole other issue with Self Published authors as well. I disagree with most of the writers concerns with Self Pub authors. I think they are a different market all together still. Most readers that I have spoken to, still value the publisher house name stamped on the inside of a cover and will pay more for the next big thing over taking a gamble with an unknown author.

[Kelli Wheelwright]

It doesn't trump my entire argument. I am saying that there is still a stigma against self published titles. You can't compare self pub titles against published work because they are still viewed differently in the market place. To say that all of the self published titles are flooding the market and consumers will no longer pay the $9.99 for a published book is an unfair statement.

 

I am just pointing out that they are still very different market places and that the article that you posted pulled a whole new argument peice into the discussion.

[Kelli Wheelwright]

I think some of the low ball pricing is due to the fact that most readers wont give indie authors a chance unless they practically give their book away. Perhaps if we could sure up the Independent Authors and how they are viewed by the public, their pricing could become more competative with published authors.

 

Bottom line it comes down to supply and demand. I understand the market is flooded with new titles everyday, but do most readers even consider half of them?