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DOJ Sues Apple and Publishers for Collusion

Discussion in 'Tech Talk - Gadgets, Gizmos and Technology' started by bobukcat, Mar 8, 2012.

  1. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    You kind of contradicted yourself there... but anyway, the author can self-publish and set his own price and get more money that way now. He doesn't have to go through an agent or a publisher to publish an eBook at Amazon or Apple.

    If you agree to use an agent or a publisher, then you have to pay them something. If they take too big of a chunk, that's up to you to decide.

    Same thing with Apple's chunk... if you think Apple charges too much, then you can setup your own Web site to advertise and take orders and sell the eBook yourself and keep all the money BUT also have all the expense too.
     
  2. trh

    trh This Space for Sale

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    The content of an eBook and print book is the same. So no lower perception there. The reality is that the cost to get an eBook delivered to me is cheaper than a printed copy. So because that cost is cheaper, I want to pay a lower price. The actual value I place on the book is after I've read it.
     
  3. bobukcat

    bobukcat Hall Of Fame

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    I perceive that because a book suddenly cost me 50% more than it did before while being completely unchanged in content I am being screwed over - the DOJ agrees with me. :)

    Your argument is that undervaluing the book (a subjective measurement to be certain) will lead to a steady decline in book prices and eventually ruin the book industry. The results in the wholesale model point to exactly the opposite happening - more books were sold and the authors made more money while the consumers got a better deal. Even the authors know they will sell more books at $9.99 than at $14.99 (blockbuster releases somewhat excluded). You seem to support higher book prices even though the author and publisher are both making less money while consumers pay more, I cannot understand that position but we can agree to disagree.
     
  4. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Winters,...
    You seem to assume that the price elasticity for all books is the same. Sure, some books my sell double what they would have when priced 50% higher, but under a lot of circumstances, there would be only a marginal increase in sales due to a lower price. E.g., I'd rather sell 5,000 books @ $15.00 than 6,000 @ $10.00, as would all but the most altruistic of authors.
     
  5. bobukcat

    bobukcat Hall Of Fame

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    Not if you made more selling the 6000 at $10.
     
  6. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Winters,...
    Not sure how to interpret your emoticon, but most certainly the DoJ isn't saying you've been screwed over, or that any one has been. Merely that there's enough smoke to see if there's a fire.
     
  7. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Winters,...
    And just how would that work? And you can't change the percentages the author gets.....
     
  8. Steve

    Steve Well-Known Member

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    Doesn't that depend on what the royalty is based on?

    E.g., my daughter-in-law wrote a fashion self-help book 2 years ago, and she received a negotiated $$$ amount up front from the publisher for the first 20k copies, and now gets a fixed $$$ amount for each copy sold over that, no matter what the sales price of the book. That goes for both the print and e-editions.
     
  9. trh

    trh This Space for Sale

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    Actually, they have said 'the consumer' has been screwed over. AG Holder during his press conference:
    The three publishers that have settled have agreed to pay back $52 million; DOJ has stated they believe the total 'screw job' is at $100 million.

    The actual filing is interesting reading. Including emails excerpts between the publishers. Also, DOJ doesn't refer to it as the 'agency model', but as the 'Apple agency model' as Apple drafted it and sent it to each of the publishers.
     
  10. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Winters,...
    Of course, but for sake of arguing that authors are always better off selling at a lower price, you have to use same percentages, and not a fixed amount or floating percentages.
     
  11. Steve

    Steve Well-Known Member

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    I know you were responding to a different argument, so this question isn't directed at you, but is a non self-publishing author getting a % a common occurrence? I thought publishers usually gave authors fixed, negotiated per-copy royalties, based on # copies sold, with the royalty changing when they reached certain sales milestones.
     
  12. trh

    trh This Space for Sale

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    Here's a link to a literary agent that discusses your question. Barbara Doyen
     
  13. Steve

    Steve Well-Known Member

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    Thanks. Per that article, my DIL gets a % of the cover price, so a fixed amount per copy sold (over 20k copies).
     
  14. bobukcat

    bobukcat Hall Of Fame

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    No, but what did change is what they are getting a percentage of. Amazon used to buy the books at a fixed 50% of the cover price (just like they did for paper books) and that is what the author was paid on. That meant they were getting paid their percentage (17.5 seems to be the most widely quoted number) of $11 (assuming a $22 hardcover list) per copy while Amazon was selling it for $9.99. Under the new model if the book sells for $13.99 they get paid their percentage of $9.80 after the reseller takes their 30% cut. That example equates to about 12% lower royalty rate.
     
  15. bobukcat

    bobukcat Hall Of Fame

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    They filed a civil lawsuit, they aren't saying there might be fire, they are saying there's a big one burning and we know who lit it! It has to be proven in a court of law (or settled) but its not just an investigation anymore.
     
  16. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    Think about what you just described there for a minute.

    Now... let some time elapse and let Amazon continue to sell eBooks for less than they are actually paying for them... and let that drive all of Amazon's competitors out of business.

    Ok... now in that future, where Amazon is the only place left to sell your eBook. You don't think Amazon will continue to pay $11 for a book that they sell for $9.99 do you? No... instead, Amazon will then begin to say "Your book is only worth $9.99, we will pay you half of that" and you will not have much choice in shopping your book elsewhere by then.
     
  17. trh

    trh This Space for Sale

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    Amazon drive all of their competitors out of business? Including Apple?

    You seem to be arguing that it was ok for the publishers and Apple to fix prices to stop one company from taking over the market.
     
  18. bobukcat

    bobukcat Hall Of Fame

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    As I've said before, using the spectre of possible wrong doing in the future is hardly justification for illegal behavior. Do you really believe that Apple could not have been competitive with Amazon if purchasing the ebooks in the wholesale model? I might accept that B&N would have had a challenge there but then it is up to them to deliver some type of additional value to the consumers, and they've proven they can with the Nook line. I know several people who chose Nook over Kindle because they could go to the B&N store to buy it and they allowed lending when Amazon did not. That is how a free market is supposed to work.
     
  19. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    To be fair... Even the DOJ isn't sure they can prove Apple was involved in the price-fixing... the documents I read indicated that while Apple was in favor of and encouraged the model, that it was the publishers themselves who met to discuss setting the actual prices.

    That's a tricky question to answer...

    Amazon had 90% of the market a couple of years ago and only has 60% now as a result of the pricing changes. Arguably, without those pricing changes Amazon had a head start on cornering the market and was using eBooks as a loss-leader to keep that marketshare.

    As for advocating illegal activities to prevent other possible wrongdoing... I don't want to go political here... but our country was kind of founded on doing just that... if you believe there is a wrong about to happen, risk breaking that wrong law to create justice. It is arguably not just a right but a responsibility.

    Now, if you get caught and lose (like the DOJ pursuing Apple and the book publishers) then those are the breaks... but if you are trying to prevent something else you believe in, then it's hard to argue completely against taking action.

    Look at what happened to Web browsers basically. For those who forget...

    Web browsers were free at first... then some companies started charging nominal fees for boxed packages... then Netscape came along and changed the game.

    Netscape gave their browser away, but built features into their server-side software that could only be viewed by their browser and then pushed to make those standard HTML. This helped sell their server software and made it impossible (practically) for their competitors to sell competing browser software.

    Thus Netscape captured the browser market... which also meant they had a huge leg up on the server side. Then, guess what? Netscape started charging for their browser once the competition had been pretty much eliminated!

    Then comes Microsoft... Microsoft bought the company who created Internet Explorer... Microsoft began bundling IE with their operating system, began integrating special features on it that only worked with Windows Web servers (sound familiar??) and worked to get those included in standard HTML.

    Microsoft had one-upped the Netscape model by not only having a free browser but making sure each Windows-installed machine came with that as part of the pre-load.

    So... Netscape complained... about essentially the same process that had gained them marketshare in the first place!

    Microsoft had their hand slapped... but the real damage was finally done. The value of Web browser software had been forever ruined. Now it is unthinkable to pay for Web browser software... so companies either develop them as a loss-leader to sell something else OR hobbyists develop them for fun and programming experience.

    It's not too much of a leap to see things like eBooks devalued over a long process until people begin to expect them to be near-free. It is already happening to the music industry if you think about it. People balk at prices of music to the point of sometimes trying to justify why it is "ok" to steal electronic copies since it "doesn't hurt" anyone... It's about a 1 second hop to justifying the same thing for digital copies of anything and everything.
     
  20. bobukcat

    bobukcat Hall Of Fame

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    As I and others have stated, there were many other things that happened in the same time frame as the pricing model changes. The largest one was definitely the introduction of the iPad and iBooks by Apple. The 2nd largest was B&N releasing the Nook reader (as a lower price than the Kindle BTW). Considering there was no market to speak of at all before the Kindle and a still very small market (relatively) when the iPad was released I don't think it's accurate to credit the pricing changes for the market share shift. It may have had played a part but it was a small piece of the puzzle comparatively.


    Some people will create a rationale for anything they do, legal or not. Software was being pirated way before music was and I'm sure there is some degree of ebook pirating going on as well. Of course people have been selling cover-less paper books for a long time too, which is essentially pirating.
     

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