News - Apple sued, this time by the US, accused of eBook price fixing

[HEXUS]

Joining Apple are Hachette SA, HarperCollins, Macmillan, Penguin...

Read more.

[kopite]

i`ve seen a number of cases where the ebook price has been more than the paperback price :S

IMHO The publishers do seem to be profiteering so hopefully they will be made to stop this .

[aidanjt]

Bit of an oxymoron, price fixing is inherent to artificially scarce (government-granted monopoly, at that) articles like books. And they're surprised this kind of thing happens?

..believing that the Agency pricing model allows publishers to avoid sales losses by preventing excessive eBook discounting from reducing sales margins below the established level for existing paperbacks.

Typical copytard 'reasoning'. If hard copies aren't in demand then let them die off with dignity. People want eBooks, so be reasonable and give them eBooks.

[crossy]

(believing that the Agency pricing model allows publishers to avoid sales losses by preventing excessive eBook discounting from reducing sales margins below the established level for existing paperbacks.) Typical copytard 'reasoning'. If hard copies aren't in demand then let them die off with dignity. People want eBooks, so be reasonable and give them eBooks.

There's the thing that I don't understand - surely the publishers set the cost that they're willing to have their product (whether eBook or real one) sold at, so if it's being sold cheaper than that, then surely it's the seller that's making the loss. In which case, why do publishers even care - as long as they get their five bucks (or whatever).

Did no-one point out that price fixing is the kind of thing that happened in Soviet Russia, so definitely "un American"?

[kopite]

If the publishers had a modicim of common sense they`d see that by allowing ebooks to be cheaper people are more likely to buy a book on impulse rather than reading reviews/recomendations by friend etc.

Its the same with games. Most of the time I dont buy stuff on steam because its usually more expensive than in the shops but when they have the sale on i buy games that I wouldnt even have looked at before.

[capt_cornflake]

Apple and the music industry seem to have been able to get away with similar practices with online music sales for years.

[cheesemp]

All the time soft backs are cheaper than the ebook equivalent I'm sticking with real books. They have the added advantage I can give them away after reading!

[davesom555]

Good, about bloody time, this is one of the reasons I won't by an ebook reader just yet. Paying 20 quid for an electronic book is just ridiculous when you can get the paperback for the same amount.

[Noxvayl]

Apple and the music industry seem to have been able to get away with similar practices with online music sales for years.

Yeah its annoying, about time they got cautioned. I hope the legal proceedings are swift so we can see the benefits ASAP(As Soon As Possible).

[crossy]

Good, about bloody time, this is one of the reasons I won't by an ebook reader just yet. Paying 20 quid for an electronic book is just ridiculous when you can get the paperback for the same amount.

That must be a text book, rather than a novel, that you're talking about? Even then, the most I've paid on O'Reilly's site so far has been about US$30 (about £19).

Actually, speaking of ORA, I'm impressed with the way that you can get the print book and then get the "digital" edition for so little extra.

[mikerr]

There's the thing that I don't understand - surely the publishers set the cost that they're willing to have their product (whether eBook or real one) sold at, so if it's being sold cheaper than that, then surely it's the seller that's making the loss. In which case, why do publishers even care - as long as they get their five bucks (or whatever).

No the publishers set the price, *and the retailer cannot sell it cheaper* under the agency model.
That's the deal the amazon wouldn't give them, but apple would - that's how apple got them on board.
They set the sell price at $19.99 and apple take 30%

Before that they were sold to the retailer (amazon) under the wholesale model, and the retailer could sell at any price - including a loss, where the retailer takes the hit.
e.g. publishers sold many books to amazon for $14.99, amazon sold at $9.99 to drive the ebook/kindle market.

Why do the publishers care ? Well they don't want the prices being driven down, and the consumer getting used to the idea of cheap ebooks - before long the publishers would have to reduce wholesale prices...

It sounds like price fixing, and thats exactly what it is.

[crossy]

Before that they were sold to the retailer (amazon) under the wholesale model, and the retailer could sell at any price - including a loss, where the retailer takes the hit.
e.g. publishers sold many books to amazon for $14.99, amazon sold at $9.99 to drive the ebook/kindle market.

Thanks for that explanation - I'd assumed that all books were sold "wholesale", in which case the "agency model" was a bit of a surprise to me - definitely sounds like an (illegal) cartel.

[aidanjt]

Thanks for that explanation - I'd assumed that all books were sold "wholesale", in which case the "agency model" was a bit of a surprise to me - definitely sounds like an (illegal) cartel.

Wholesale only works with physical books because there's an actual physical exchange of property. With eBooks, the etailer does the manufacturing (replicating the file) and all the distribution, and there is no limit to the number they can put out on the market unless the publisher exercises their government-granted monopoly rights. Which is exactly what they're doing. Why the government is surprised when companies use rights they granted them to behave unethically is beyond me.

Basically, the old publishing model is rapidly becoming completely redundant and irrelevant, and they know it.

[crossy]

Wholesale only works with physical books because there's an actual physical exchange of property. With eBooks, the etailer does the manufacturing (replicating the file) and all the distribution, and there is no limit to the number they can put out on the market unless the publisher exercises their government-granted monopoly rights. Which is exactly what they're doing. Why the government is surprised when companies use rights they granted them to behave unethically is beyond me.

I'd assumed (probably wrongly) that when Amazon et al were granted eBook rights, that either the original publisher got a part of the sale (either percentage of the purchase price or a fixed lump sum), or that the eBook seller paid a certain amount for the right to - for example - sell 20,000 "licenses". And they then had to report back to the publisher the number sold.

[mikerr]

It isn't about limiting the number of ebooks sold, its about keeping the perceived value of books high,
sadly publishers still don't like the idea of ebooks being cheap.

If the agency model succeeds you will only ever be able to buy an ebook at RRP, no discounts or sales ever, no matter where you buy it from.

[aidanjt]

It isn't about limiting the number of ebooks sold, its about keeping the perceived value of ebooks high

In economics, that's the same thing. You can't charge lots for something which is hugely abundant. For example, you'd be hard pressed to find vendors selling 10m^3 bags of air. Why? Because we have 5x10^18kg of it sitting over the surface of the Earth. All you have to do is inhale and you've got instant breathable air. If you were living on Mars, however, that would be a very different matter, since Mars' atmosphere is rarefied and toxic to us anyway. So you could pretty much charge whatever you want for breathable air on Mars.

In the case of eBooks, the scarcity is entirely imaginary, there's no limit to the number of times it can be replicated for every human being on Earth in almost no time flat. But instead of launching at a price which is accessible to everyone, the publisher launches high and slowly dials it down as sales dry up to milk the maximum profits. By that mechanism they limit the supply making it to the consumers, keeping perceived value high.