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DOJ Sues Apple and Publishers for Collusion


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#26 ONLINE   trh

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Posted 11 April 2012 - 05:12 PM

This is a very good article (IMO) in the New Yorker on Steve Jobs and eBooks and the iPad. New Yorker Jan 2010

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#27 ONLINE   Stewart Vernon

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Posted 11 April 2012 - 05:55 PM

As a consumer, I welcome lower prices...

but...

Why do people assume e-books should be priced lower than "real" books?

I grant you that the production costs for an e-book are negligible compared to actually chopping down trees and making real books... but given the author does the creative work to create the content... and what we want to buy/read is that content... why should anyone assume that e-books automatically should or would cost less?

IF digital replaces actual... and one day there are no more real books made... only e-books... why wouldn't the price for those e-books be whatever the market would bear?

If you want a real book (I sometimes do) then you should love that the real book costs the same or less (if in a bargain bin) than an e-book! Not chastising that the e-book costs more.

A CD contains digital music... you can buy digital music online... the same digital music, essentially... so why shouldn't both cost the same?

I love me some low prices... but entitlement to low prices never makes sense to me.

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#28 ONLINE   hdtvfan0001

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Posted 11 April 2012 - 06:36 PM

As a consumer, I welcome lower prices...

but...

Why do people assume e-books should be priced lower than "real" books?

I grant you that the production costs for an e-book are negligible compared to actually chopping down trees and making real books... but given the author does the creative work to create the content... and what we want to buy/read is that content... why should anyone assume that e-books automatically should or would cost less?

IF digital replaces actual... and one day there are no more real books made... only e-books... why wouldn't the price for those e-books be whatever the market would bear?

If you want a real book (I sometimes do) then you should love that the real book costs the same or less (if in a bargain bin) than an e-book! Not chastising that the e-book costs more.

A CD contains digital music... you can buy digital music online... the same digital music, essentially... so why shouldn't both cost the same?

I love me some low prices... but entitlement to low prices never makes sense to me.

The cost to "manufacture" an eBook is <$1.00 on average, according to 6 different NY Time Best Selling Authors who spoke on this subject at book signings I attended with my wife. This topic comes up more and more, and while the authors have some enthusiasm for the eBook format...they also have commented that the pricing is often "beyond what it should be".

The two top costs are the author contractual pmt. and promotional marketing expenses, which vary per title.

The underlying key cost on that front is the author payment for what is typically a substantial amount of work. Some authors work on 2-3 books overlapping, others 1 at a time. If that gets reduced significantly, we'll likely all see less books...in any format.

What then muddies the water are the outside players (like a large payment to iTunes) to simply deliver the content - especially when this can be done far more economically, and is done cheaper through other channels.

In the case for the topic on hand in this thread, it appears that Apple made an intentional choice to try to manipulate and control the market pricing in their favor to assure their target for profit.

Doing so with key publishers/distributors is clear collusion and price fixing, which is likely why 3 of the players already came clean to bail out from the heartburn - at least from their participation.

As a few others have said...this is not the first time (and likely not the last) that this has happened/will happen. Still...it's illegal, unethical, and plain wrong.

The fact that Apple would not immediately fess up and take their medicine (like the 3 other players so far) demonstrates the degree of their corporate arrogance - which has surfaced on other fronts in the past. This is not to bash Apple, rather, to expose that there is a pattern of this kind of culture at that company which is indefensible.
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#29 OFFLINE   Sixto

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Posted 11 April 2012 - 08:19 PM

As a consumer, I welcome lower prices...

but...

Why do people assume e-books should be priced lower than "real" books?

I grant you that the production costs for an e-book are negligible compared to actually chopping down trees and making real books... but given the author does the creative work to create the content... and what we want to buy/read is that content... why should anyone assume that e-books automatically should or would cost less?

IF digital replaces actual... and one day there are no more real books made... only e-books... why wouldn't the price for those e-books be whatever the market would bear?

If you want a real book (I sometimes do) then you should love that the real book costs the same or less (if in a bargain bin) than an e-book! Not chastising that the e-book costs more.

A CD contains digital music... you can buy digital music online... the same digital music, essentially... so why shouldn't both cost the same?

I love me some low prices... but entitlement to low prices never makes sense to me.

Yep, I tend to agree, not really sure where I side with this situation, but hopefully it doesn't affect Apple too much. Ever since the switch to the iOS ecosystem the family loves all the integration. Some really cool stuff compared to what we came from. Kids were home for Easter and loved the new addition to the entertainment center (Apple TV) with the integration with iCloud/iPhone/iPad. It just gets better and better.

We actually use the Kindle App for books, which easily allows the iPad and Kindle Touch to share books. Works great.

And Macmillan’s CEO sure thinks he didn't do anything wrong: http://www.tor.com/b...om-john-sargent

As with most things, two sides to every story, but if they did do something that's not accepted, then they'll change it and we'll move on with hopefully not much impact.

Interesting that it's not criminal, rather civil.
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#30 ONLINE   Stewart Vernon

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Posted 11 April 2012 - 09:28 PM

Yeah... that's why I am torn. The collusion and price-fixing allegations are bad news and need to be addressed.

What I wouldn't want to see, however, is Amazon killing e-book sales with prices so low that authors no longer want to write books.... so it's a case where I kind of have to hope both sides lose!

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#31 ONLINE   trh

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Posted 11 April 2012 - 09:52 PM

According to the New Yorker article, author's royalties went up 10% with eBooks.
There was a recent survey that showed people with eBook readers increased their reading (therefore more books being sold).
And didn't Google just announce they are coming up with a program where authors can self-publish on Google and get most of the sales?

So I don't think authors are going to lose out with eBooks. The publishing industry needs to adapt to the new technologies and get away from an antiquated pricing model.

#32 OFFLINE   phrelin

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Posted 12 April 2012 - 12:28 AM

No need.

This new thread is about the new (current) information and the actual US Justice Department lawsuit. The previous one was about speculation in advance. A number of things have changed in the interim.

OK then I'll more or less repeat myself.

As an old guy, I remember when under state imposed "Fair Trade" statutes, the manufacturer was able to impose a fixed price for items. These fixed prices could offer some price protection to small merchants in competition against larger retail organizations. This began in 1931 during the Great Depression in my state, California.

It took a long time, but those laws are gone now. What you see is the MSRP which large discount stores ignore completely.

The idea that in the 21st Century U.S. a manufacturer and a retailer could agree that no one could undersell a price because the manufacturer sets the retail price disturbs me.

Manufacturers and wholesalers can decide the price they'll sell an item to a retailer. But what the retailer charges is none of their business.

Any time the Justice Department goes after price fixing done by manufacturers and retailers together, IMHO they should get all the positive accolades possible.

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#33 ONLINE   hdtvfan0001

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Posted 12 April 2012 - 06:30 AM

The idea that in the 21st Century U.S. a manufacturer and a retailer could agree that no one could undersell a price because the manufacturer sets the retail price disturbs me.

Manufacturers and wholesalers can decide the price they'll sell an item to a retailer. But what the retailer charges is none of their business.

Any time the Justice Department goes after price fixing done by manufacturers and retailers together, IMHO they should get all the positive accolades possible.

Kudos -agree.
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#34 OFFLINE   Sixto

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Posted 12 April 2012 - 07:16 AM

Seems like if the DOJ wins then it might end with the book industry being worse for publishers, retail chains, and eventually consumers. I guess it all depends on one's perspective. If the goal is for Amazon to have a monopoly, lower prices even at a loss to Amazon, then if they win that may happen. I would think that this could hurt the content creators as well.

http://news.cnet.com...argeting-apple/

http://www.nytimes.c...ls.html?_r=1

The more I read the less it sounds like a good idea for this suit, but we'll see how it plays out.
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#35 ONLINE   hdtvfan0001

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Posted 12 April 2012 - 07:20 AM

The "goal" has always been to have a free market - not one that is manipulated by Apple, publishers, Amazon, or anyone else through illegal collusion and/or price-fixing.

To be clear....Apple is part of this lawsuit...not Amazon. It's not if people compete, but how.

As long as authors write books...people will read them. Where they get them, however, will be a market-driven choice.
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#36 OFFLINE   Sixto

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Posted 12 April 2012 - 07:33 AM

The previous thread's title was certainly more accurate: "DOJ to Sue Apple and Five Publishers for Collusion":

http://www.dbstalk.c...ad.php?t=202810


The actual title of the article that this thread is based on is: "US says Apple, publishers conspired to fix prices".

It sure is weird to not see the publishers mentioned in the title.
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#37 ONLINE   hdtvfan0001

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Posted 12 April 2012 - 08:30 AM

Actually...the previous thread and title are obsolete...since 3 of the parties chose to admit their guilt, cease their participation from the illegal practices, and are no longer part of the current lawsuit by the Justice Department.

The title heading with Apple as the significant named lawsuit target came right from headlines by much of the mainstream media...example...CNN's title below. The two remaining publishing houses appear to be secondary participants.

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#38 OFFLINE   lparsons21

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Posted 12 April 2012 - 09:19 AM

Being an avid reader, I wasn't thrilled with Apple and the publishers getting together to push the price of ebooks up. So on one hand I'm hoping that this benefits us that read a lot.

One good thing that came out of the push for higher prices was that I started looking for other legal methods to get books. And lo and behold, there are tons of free ebooks out there, and not just the classics. Bunches by new or never before published authors, as well as some early efforts by more established names are available. Many are very good, most are just OK, and some are really bad. But they are free and I've found new authors to watch for.

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#39 OFFLINE   klang

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Posted 12 April 2012 - 09:49 AM

The previous thread's title was certainly more accurate: "DOJ to Sue Apple and Five Publishers for Collusion":

http://www.dbstalk.c...ad.php?t=202810


The actual title of the article that this thread is based on is: "US says Apple, publishers conspired to fix prices".

It sure is weird to not see the publishers mentioned in the title.


It is not as good an Apple bash with the publishers included.

I agree this should have been combined with the original thread.

If this results in lower e-book prices from Amazon I'm all for it.

#40 ONLINE   hdtvfan0001

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Posted 12 April 2012 - 09:57 AM

Being an avid reader, I wasn't thrilled with Apple and the publishers getting together to push the price of ebooks up. So on one hand I'm hoping that this benefits us that read a lot.

Excellent point.

There's that delicate balance between market pricing and enough financial incentive to the content providers (authors/publishers) to supply their products.

One good thing that came out of the push for higher prices was that I started looking for other legal methods to get books. And lo and behold, there are tons of free ebooks out there, and not just the classics. Bunches by new or never before published authors, as well as some early efforts by more established names are available. Many are very good, most are just OK, and some are really bad. But they are free and I've found new authors to watch for.

You're right again...there are numerous thousands of free eBooks out there.

I suspect that the end result of this lawsuit, as well as adjustments that might happen with the Amazon lower pricing that spawned this activity by Apple and the publishers...is to establish some kind of tiered pricing based on the age of the eBook.

This has already happened where a new Blu Ray disk release is offered for a limited time (usually a week) at an introductory discounted price by retailers, then it changes to a higher price for a period of time...and later it gets reduced in price based on age.

I would not be surprised to see the publishing world adopt something similar.
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#41 OFFLINE   lparsons21

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Posted 12 April 2012 - 10:14 AM

I would hope that would end up being the price model going forward.

For me, it isn't important that I read that latest best seller when it comes out. If it is a good read, it will be around for a long time and I'll read it later. Same for DVDs and video of all sorts.

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#42 OFFLINE   klang

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Posted 12 April 2012 - 10:40 AM

Some e-book prices are already changing with the same cycle of hardback and paperback releases. I held off buying Clive Cussler's The Jungle until it came out in paperback. The e-book price went down about $5.

#43 OFFLINE   TBoneit

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Posted 12 April 2012 - 11:26 AM

As a consumer, I welcome lower prices...

but...

Why do people assume e-books should be priced lower than "real" books?

I grant you that the production costs for an e-book are negligible compared to actually chopping down trees and making real books... but given the author does the creative work to create the content... and what we want to buy/read is that content... why should anyone assume that e-books automatically should or would cost less?

Snip


Ebooks should be lower cost for several reasons.

1. No physical media. This means no paying for paper, printing, typesetting, Warehousing, Trucks running around delivering, labor costs.

2. Same payment to the author and less distribution fees and Ebook should allow a lower price with a higher profit.

3. I'm sure it costs Amazon a lot less to warehouse a Ebook (1 server?) than to have warehouses all over for the same print title, pay for packing materials, packing labor, shipping costs (cost to pack, then take to loading dock and ship. Include paying to have the books delivered, unloaded and stocked in the warehouse Vs having them delivered over the Internet.

4. The customer paid the expense for the Ebook hardware (the reader) not the publisher.

If the book sells for $20 hardcover, Vs Ebook. Pay the author the same fee. I'd bet the publisher could make the same $$, the Author the same $$, the seller the same $$, possibly a distributor's $$ and still sell for a lot less.

IMO there is price gouging going on if the price is equal or higher.

Just one persons opinion of course.
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#44 OFFLINE   Christopher Gould

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Posted 12 April 2012 - 12:17 PM

Game of thrones at Walmart paperback 6.59 lists for 8.88. Kindle 4 book set 29.99 average out to 7.50 a book. So paperback cheaper than e-book.

#45 ONLINE   Stewart Vernon

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Posted 12 April 2012 - 02:41 PM

Ebooks should be lower cost for several reasons.


To be clear... lower "cost" or lower "price"?

Clearly an ebook is cheaper to produce than a real book (i.e. lower cost)... but that doesn't necessarily translate to a lower price for the consumer.

Think about you and your job... You get hired today for $10/hr and 2 years from now you are much better at your job. You can do the work more efficiently, higher in quality, and are just all-around better at your job. So... should you get paid more for your skills OR should you be paid less because you shouldn't get paid more to do the same work?

Why should an author be expected to charge less for an ebook than a printed book? Why shouldn't the author be able to get more money for his work? IF you were an author wouldn't you want more money for your work?

Also, once printed books become a thing of the past... and ebooks are the only way for authors to sell... why then wouldn't they cost whatever the author wants to sell them for?

1. No physical media. This means no paying for paper, printing, typesetting, Warehousing, Trucks running around delivering, labor costs.


Agreed. The cost to produce an ebook is lower. But that doesn't automatically mean the price will or even should go down.

2. Same payment to the author and less distribution fees and Ebook should allow a lower price with a higher profit.


True... but the author could keep the price the same and make even more profit. Why isn't that possible?

4. The customer paid the expense for the Ebook hardware (the reader) not the publisher.


I bought my bookshelf too... not the publisher. Not sure what that has to do with anything.

If the book sells for $20 hardcover, Vs Ebook. Pay the author the same fee. I'd bet the publisher could make the same $$, the Author the same $$, the seller the same $$, possibly a distributor's $$ and still sell for a lot less.


Yes... very true... but they can make more profit if they keep the price the same.

Think... Why should they charge different prices? IF they charge the same price for ebooks and printed books... then you decide if the book is worth $20. If the book is worth $20 to read, then you pay that price and choose your format (printed vs ebook).

There's just no automatic reason to expect an ebook to *have* to be priced lower than a printed book whether it can be or not.

They could also lower the price of real books too... sometimes they do this... Amazon sells books nearly half their listed price anyway... so clearly there is profit built into the model, right?

IMO there is price gouging going on if the price is equal or higher.

Just one persons opinion of course.


You are of course entitled to your opinion. I've already said too that I would like lower prices... That would be nice and I would buy more books... but I don't expect lower prices just because they are ebooks. I don't know why anyone should expect lower prices, no matter how much we might want them.

Lower prices means less perceived value. Consumers will still wait for sales and want further discounts... People always want things to be cheaper... and I don't want authors to stop writing books.

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#46 ONLINE   trh

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Posted 12 April 2012 - 03:39 PM

I don't think anyone believes author's fees should go down with eBooks. The New Yorker article stated that Author's royalties went from 15% to 25% with eBooks. And they (the publishers) could afford to give more royalties to the writers because a good portion of their overall costs went down -- but they wanted to keep the same selling price.

Another item not mentioned previously as a cost for publishers is 'returns'. The New Yorker stated the industry normal is 35% of all printed books are returned by vendors to publishers. The publishers have to write that amount off; and they do that by charging us all more for our books. This cost doesn't apply to eBooks.

And the comparison using someone working for an hourly rate isn't appropriate. Writers are more like commissioned salesman -- they more they sell, the more they make. So as an author becomes more popular/successful, they will make more money (and that hasn't changed whether the book is printed or digital).

But the lawsuit is because Steve Jobs wanted 30% of $15, not $10 and he told the publishers that he could make that happen.

#47 ONLINE   trh

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Posted 12 April 2012 - 03:56 PM

One good thing that came out of the push for higher prices was that I started looking for other legal methods to get books. And lo and behold, there are tons of free ebooks out there, and not just the classics.

Don't forget to check with your library also. Many have eBooks you can 'check out'. And if yours doesn't ask them if they have any agreements with other libraries. My county hasn't implemented eBooks, but the county next door does. I had to drive 35 miles to their library to get a card, but since then, I've read 20 books from their system.

Of course publishers are trying to charge libraries additional fees for eBooks, but that is another topic.

#48 OFFLINE   bobukcat

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Posted 12 April 2012 - 06:10 PM

The main reason I expect e-books to be less than print = Amazon sold MILLIONS of copies of new releases for $9.99 on Kindle when Hardbacks were $20+. Of course that was before Apple and the Publishers got together and decided they could force us to pay more. If Apple had used the same purchasing (from the publisher) model that Amazon was, the same model Amazon (and other retailers) had been using for physical media books for years and years we wouldn't all be paying more for e-books today.

Everyone loves Apple but does anyone really believe that e-book adoption rates would be anything like they are today without the Kindle and Kindle applications Amazon brought to market? Sure others were making e-book readers before them but none of them compared in adoption rate. When B&N released the Nook line popularity increased dramatically again. Then the iPad was released....

#49 OFFLINE   bobukcat

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Posted 12 April 2012 - 06:18 PM

Why should an author be expected to charge less for an ebook than a printed book? Why shouldn't the author be able to get more money for his work? IF you were an author wouldn't you want more money for your work?


Lower prices means less perceived value. Consumers will still wait for sales and want further discounts... People always want things to be cheaper... and I don't want authors to stop writing books.


I'm not sure anyone has said they want the author to get paid less, if they did I missed it. The fact that lower price of finished product may equal a higher volume (others have linked statistics that e-book consumers buy more books than non-e-book consumers) is further incentive for writers.

Amazon and others (Google most recently) provide ways for authors to publish directly, enabling a whole new generation of writers to go to market without the publishers. JK Rowling completely cut the publisher out of her e-book delivery. The times are changing and the publishers are trying to do anything they can to keep themselves relevant as long as possible, that's understandable until they conspire to fix prices - then it's time for a lawsuit. :-)

#50 OFFLINE   jdskycaster

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Posted 12 April 2012 - 06:24 PM

trh hit it on the head. The issue is with apple taking a rediculous comission for doing nothing other than hosting a file for download. This is becoming an issue not just for books but for everything that is sold on itunes.

Many companies that want to develop commercial applications for their customers are forced to pay these royalties to apple when the companies creating the apps are already supporting apple by making the hardware more attractive to apples customers. This is not a two way street and there are already signs that many commercial apps will not be ported or developed for ios because of the itunes royalty ripoff.

Who deserves to be paid more? The writer, the publisher or apple?




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