DOJ Sues Apple and Publishers for Collusion

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

  1. Apr 15, 2012 #81 of 165

    Steve Well-Known Member

    Aug 22, 2006
    I don't use either app, but I believe both the Nook and Kindle apps now redirect you to a web page when you try to do an in-app purchase. I think Apple actually relented to allow this, because at one time, I don't think they approved any method to bypass the App Store.
  2. Apr 15, 2012 #82 of 165

    RasputinAXP Kwisatz Haderach of Cordcuttery

    Jan 23, 2008
    I've been reading books from Kameron Hurley lately. Very good sci fi.

    Kindle, 7-8 bucks.

    Nook, $8-8.50

    Direct from Baen, the publisher, in unencumbered, download as often as you want multiple formats for one price? $6.

    I'm willing to bet Baen makes more money at $6.
  3. Apr 15, 2012 #83 of 165

    hdtvfan0001 Well-Known Member

    Jul 28, 2004
    As combining the old thread on this and the newer one with the news facts reported by MSNBC and others...the thread is now a hodgepodge of discussion. The title was also altered away from what the MSNBC story named it. Figured that would happen.

    Several reports online indicate there are continued talks behind the scenes regarding a settlement between the DOJ and the remaining 3 parties in the lawsuit.
  4. Apr 15, 2012 #84 of 165

    afulkerson MI Citizen Corps Vol of Year

    Jan 14, 2007
    I have both the Kindle and an IPad. The Kindle app on the IPad does not allow you to order anything. There is no way to go to the store. You can only see what you have already ordered from Amazon for your Kindle.
  5. Apr 15, 2012 #85 of 165

    hdtvfan0001 Well-Known Member

    Jul 28, 2004
    Apparently, there are state lawsuit implications for this situation as well:

  6. Apr 15, 2012 #86 of 165

    bobukcat Hall Of Fame

    Dec 20, 2005
    Thanks for the links. For anyone who believes that Apple's and the publisher's agency model is better for authors I recommended you read Joe Konrath and Barry Eisler's article (some foul language included) and / or this one from David Gaughran

    He also makes an interesting point that the publishers desire / demand for DRM was as responsible for Amazon's walled garden approach to the Kindle as anything Amazon may have chosen to do.
  7. Apr 15, 2012 #87 of 165

    klang Hall Of Fame

    Oct 14, 2003
    Yup, I always buy direct from Baen when possible. Got the latest Honor Harrington book by David Weber for $6. I used to buy these in hardcover but long ago ran out of space to store physical books. Have Baen email the file to Amazon and it shows up on my Kindle just like I had bought it from Amazon.

    I think the days of the big publishing houses are numbered.
  8. Apr 15, 2012 #88 of 165

    hdtvfan0001 Well-Known Member

    Jul 28, 2004
    As some of the details emerge, one of the bigger surprises is just how long these discussions were going on:

  9. Apr 15, 2012 #89 of 165

    bobukcat Hall Of Fame

    Dec 20, 2005
    The fact of the matter is that Amazon practically INVENTED the market. Sony had e-readers but it wasn't their core business and they didn't put much marketing into it. It wasn't until Amazon (the worlds largest seller or physical books) released a device and convinced publishers to release e-books the same date as hardcovers (there was a delay window before, if they were e-published at all) that any kind of market even worth talking about existed. Then they bet on it big time with marketing dollars, loss-leader titles, higher royalties, etc. With this in mind why would it be surprising or evil in any way that the one company who innovated and spent real money on the market would be the over-whelming leader in that market? Its similarly unsurprising that since real competition has entered that market in the form of the largest B&M bookseller (B&N) and the world's most valuable company (Apple) that their market share has declined.
  10. Apr 15, 2012 #90 of 165

    hdtvfan0001 Well-Known Member

    Jul 28, 2004
    Quite true.

    ...and competition is a good thing. In this case, the issue centers on just how "competition" was executed.

    Allegedly in this case - it was done by a group of industry players with alot of clout trying to drive prices upward for their own financial reward at the expense of consumers paying more. At least that is what the Atty General stated publically.

    While I suspect that since all this was going on for years, and the DOJ would not file suit against these big companies without some significant evidence to support the claims...Apple continues to deying any wrongdoing...and any guilt has yet to be "proven" for the 3 remaining players in the lawsuit.

    Whatever the outcome...I suspect this will impact the eBook business in a major way going forward. There is alot of $$$ at stake (invested to date and future revenue) for multiple players.
  11. Apr 15, 2012 #91 of 165

    bobukcat Hall Of Fame

    Dec 20, 2005
    What I would like to know is what exactly the outcome of the suit would be if DOJ wins and what the publishers that settled agreed to. If its not a return to the old pricing model or some other step designed to bring back the lower prices we once enjoyed I'm not sure there's anything positive in it for consumers or the authors.
  12. Apr 15, 2012 #92 of 165

    Herdfan Well-Known Member

    Mar 18, 2006
    That is a very easy problem to solve. Raise your price to Amazon. By this time the installed base of Kindles was very large. Simply raise the price and Amazon would have been forced to their prices. If they didn't, they would run the risk of losing titles and pi**ing off their Kindle base.

    Price fixing goes on every day right under our noses. Some illegal, some not. Take gas prices. Let's say there are two gas stations across the intersection from each other. The Shell station gets a load of higher priced gas and raises their prices 5 cents. The Citgo station looks across and sees the price over their went up, so they also raise their price. This is not illegal as the station owners did not conspire to set prices equally.
  13. Apr 15, 2012 #93 of 165

    Steve Well-Known Member

    Aug 22, 2006
    Lower... is another example. Here the author is selling e-books directly to the consumer.
    Ya. I believe all this current pricing strategy maneuvering by the publishers is akin to rearranging deck chairs on the Titanic. Even if it means they will be less profitable, book publishers need to radically alter their fundamental business model to one that is sustainable in a completely digital economy, much like newspapers and magazines are struggling to do. They either need to accept the fact they're going to make less money, or go out of business entirely, IMHO.
  14. Apr 15, 2012 #94 of 165

    hdtvfan0001 Well-Known Member

    Jul 28, 2004
    Good question, likely without a good answer at this time.

    Please note that I have repeatedly used the word "allegedly" in my posts regarding this lawsuit, as no guilt by Apple or anyone else has gone through a legal process in any way.

    In the end, I suspect everyone, Apple fans, eBook fans, Kindle fans, Nook Fans, and Android fans all share 1 thing in common for the future - fair and competitive pricing to offer eBooks to consumers as one alternative way to read books.

    I'm still optimistic that this all turns out making all eBook readers happy as an end result.
  15. Apr 15, 2012 #95 of 165

    trh This Space for Sale

    Nov 2, 2007
    NE FL
    The original Kindle app had a link directly to Amazon to buy books. In Feb 2011, Apple changed their TOS so that any products bought through an app, Apple would get their 30%. The eventual solution was the removal of the "buy" button in the Kindle app, but you can go to Amazon via Safari and buy your books and then send them to your iPad.
  16. Apr 15, 2012 #96 of 165

    Steve Well-Known Member

    Aug 22, 2006
    My bad. I was mis-remembering that Apple changed the rules last summer to allow re-directs for newspaper and magazine subscriptions, not e-book purchases.
  17. Apr 15, 2012 #97 of 165

    Author New Member

    Apr 15, 2012
    The author isn't the one who decides what a book will cost. That's between the publisher and the retailer. Unless he or she is self-published, the author has very little say in anything other than the actual content of the book.

    For dreaming up a story, creating characters, spending months or even a year doing this, the author is given a small advance and approximately 6 to 10% royalties on print books and about 17% on ebooks.

    The lion's share of the money goes to the publisher. He takes that cut for editing, designing the cover and distributing the book. These are fixed costs that are usually recouped fairly quickly. And the author doesn't see another cent until his advance has "earned out."

    Most authors have day jobs because they simply can't make a living based on what their publishers pay them.

    Amazon came along and changed all that. By allowing authors to go straight to ebook and paying them a 70% (that's SEVENTY) royalty on gross sales, they've given many authors a chance to bypass the publishers, hire their own cover artists and editors and actually make an excellent living on their work.

    So if you ever hear publishers screaming that the ebook prices have to be higher because they're trying to protect authors and get them more money, that's complete nonsense. What they're trying to protect are their office suites and staffs that they maintain with their 90% of net profits.

    Anyone who thinks Amazon is the bad guy in this has it wrong. From the content creator's point of view—the author—Amazon is the hero.

    What's really happening here is that publishers are scrambling to hang onto a business model that is falling apart—and who can really blame them? But the people who wind up suffering are the authors and the readers.

    Now that traditionally published authors can bypass the publishers and go straight to Amazon, they can offer their ebooks at a substantially lower price ($2.99 to $5.99) and still make enough money to survive and continue to write.

    There is no reason for ebooks to be priced as high as $12.99 and $14.99, except to pay for the outrageous overhead caused by the publisher's way of doing business.

    I'm glad the justice department caught them at their game.
  18. Apr 15, 2012 #98 of 165

    phrelin Hall Of Fame DBSTalk Club

    Jan 18, 2007
    The point is that Apple had the resources to be serious competition through discounting at the retail level to attract customers away from Amazon - loss leaders are one way to do that if you are a capitalist with a lot of assets. But we all know Apple is a company used to making a fantastic 25% profit. So they hoarded cash and cut price-fixing deals with major publishers.

    Steve Jobs was no capitalist saint.
    The big publishing houses are like everything "big" in this country. In this business, management gets used to being overpaid for holding authors hostage, all the while sleeping during the invasion. All of a sudden their territory has been taken over by some e-commodity upstart from Etherland known as Amazon so they try to find a way to leverage their hostages.

    In this case, they turned to the one big guy in the Etherland who missed out on this e-commodity and cut a deal to slit the throat of the upstart. Only the Sheriff steps in and says that's not legal.

    In the process, hopefully the hostages will be getting away. Sites like offer alternatives. Simply for a book store is out there.

    Yes, the big news is self-publishing.

    While Amazon has given freedom from they stodgy old publishing houses, they aren't the only ones. For instance offers serious competition. Check out the company's about page.

    As of the dates indicated, these folks are known successful ebook self-publishers:
    • Amanda Hocking - 1,500,000 ebooks sold (December 2011)
    • Barbara Freethy - 1.3 million self-published ebooks sold (Dec 2011)
    • John Locke- more than 1,100,000 eBooks sold in five months
    • Gemma Halliday - over 1 million self-published ebooks sold (March 2012)
    • Michael Prescott - more than 800,000 self-published ebooks sold (Dec 2011)
    • Chris Culver - over 550,000 (Dec 2011)
    • Heather Killough-Walden - over 500,000 books sold (Dec 2011)
    • Selena Kitt - "With half a million ebooks sold in 2011 alone"
    • J.A. Konrath - more than 500,000 ebooks sold (November 2011)
    • Stephen Leather - close to 500,000 books sold (Nov 2011)
    • CJ Lyons - almost 500,000 ebooks sold (Dec 2011)
    • J.R. Rain - more than 400,000 books sold (Sept 2011)
    • Darcie Chan - more than 400,000 ebooks sold (Nov 2011)
    • Bob Mayer - 347 sold in Jan to over 400,000 total sold by year's end (Dec 2011)
    • Bella Andre - more than 400,000 books sold (Feb 2012)
    • Tina Folsom - over 300,000 books sold (October 2011)
    • J Carson Black - more than 300,000 books sold (November 2011)
    • B.V. Larson - over 250,000 books sold (Dec 2011)
    • Kerry Wilkinson - more than 250,000 books sold (Feb 2012)
    • T.R. Ragan - 239,592 books sold (March 2012)
    • H.P. Mallory - more than 200,000 ebooks sold (July 2011)
    • Marie Force - more than 200,000 sold in the last year (March 2012)

    Read this Guardian story Amanda Hocking, the writer who made millions by self-publishing online. Also read Self-published ebook author becomes Amazon's top seller. Google "ebook self publishing success stories" ;)
  19. Apr 15, 2012 #99 of 165
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Gold Club DBSTalk Club

    Apr 17, 2003
    I would like to see eBooks priced the same way as physical books.

    Publishers put a price on the cover of their books and sell the books to retailers at less than than price. The gap between what the retailer pays and what they charge is their margin. Out of the margin the retailer pays the costs associated with selling that book. (Warehousing and buildings, staffing, profits if possible.)

    If retailers choose they can charge less than the sticker price of the book. Retailers with lower overhead may be able to charge less for the book than the label. And consumers might choose to go to a large bookseller with a discount than a smaller seller that has to charge full price to break even.

    The "agency" pricing model seems to break that ... instead of the sticker being a "suggested retail price" it is a required retail price, and all sellers get the same cut (at least the way I read it).

    Amazon was selling eBooks at a loss to sell their Kindles and promote the concept of reading eBooks to their customers. If the publisher wanted a $14.99 sticker price with 30% payment to the seller ($4.49) and Amazon wanted a $9.99 sale price that works out to a loss of 51c per book. What is wrong with that?

    If Apple doesn't want to play the discount game they are not forced to. Conspiring to stop Amazon from offering discounts is a problem.
  20. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

    Dec 2, 2010
    Indeed it is, though we don't know that that's the case.

    The other problem: predatory pricing is also illegal. We have a lot more sympathy for our friends running a local store when Cost-Mart comes in and undercuts them than we do for a big publishing house.

    (Though these Big Box chains have learned to do so without obvious 'intent' to drive them under, and without lowering prices in one store in order to kill competitors in a specific market.)

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