The Apple E-Book Lawsuit and Amazon’s $9.99 Problem
“On April 11, the U.S. Department of Justice filed an antitrust suit against Apple and several book publishers, claiming that the companies conspired to limit price competition in e-books, in violation of Section 1 of the Sherman Antitrust Act.”
“Throughout the complaint, the Justice Department claims that the publishers viewed Amazon’s retail price of $9.99 as being too low: “…the Publisher defendants also desired to have popular e-book retail prices stabilize at levels significantly higher than $9.99″”.
At issue is the publishers’ “agency model” in which they set the retail price and give preference to Apple which gets 30% off the top.
And then there was this:
“Yes, prices to customers have gone up because of Apple’s contractual innovation—but the question is really whether those low prices were good for consumers. Justice should be asking whether Amazon’s low prices could be destroying value-adding services throughout the supply chain, and whether those low prices were likely to persist if no other e-retailers would enter the market.”
You can’t make this stuff up.
Speculation abounds that Amazon triggered e-book lawsuit
Nice headline for an article on DoJ against Apple and five publishers colluding to implement their ‘agency model’. That is, the publishers get to set the retail price, Apple gets 30% off the top and book buyers pay more.
“Amazon.com popped up throughout a lawsuit filed last week by the Justice Department against Apple and five major publishers, stoking speculation about its role, if any, in the proceedings.
“Amazon is mentioned about 90 times in the government’s lawsuit against Apple and the five publishers: Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster.
“Paul Aiken, executive director of the Authors Guild, said the potential consequences for bricks-and-mortar retailers are “frightening.” He said he supports new online sales channels but not at the expense of bookstores — the best places, he believes, to discover new authors.
“Amazon’s history is to undermine bookstores by focusing its predatory pricing practices on titles that those stores are trying to sell,” he said. “It’s open season again.”
Yeah, right, Paul. And your quibbles about the Kindle2? Color me unimpressed by your, and others, faux altruism on behalf of bookstores, publishers, and derivative rights, and “new authors” brought you by those wonderful traditional publishers.
Maybe they should just bite the bullet and admit their 150 year old business model for market control is sooooo yesterday.
And the key takeaway from the below interview:
[interviewer suggests Aiken is fighting technology] “We don’t want to fight it, we want it to be licensed.”
(This is about the Kindle2 text-to-speech capability.)
Funny little slip in that article, referring to “Jeff Bezo’s” …
Authors Guild was active in the publishers’ lawsuit against Google’s mass-digitization of copyrighted books – but the publishers reached an agreement with Google and dropped said lawsuit. Authros Guild carries on the good fight – Aiken: “ … our class-action lawsuit on behalf of U.S. authors continues.”
Amazon, in 2010, had 80% of the e-book retail market. Now, they have 60% and Barnes and Noble takes around 30%.
From April, 2012:
E-book lawsuit pressures publishers, boosts Amazon
“Arun Sundararajan, a professor at New York University’s Stern School of Business: “The traditional business model for publishers is under threat, and I think we will see it reshaped.”
“If the Kindle consolidates its position as the dominant player in the e-book business, Amazon will be taking a larger share of what consumers pay for e-books, and publishers will have little leverage in dealing with the giant online retailer.
“That sounds like bad news for consumers.
“Indeed, booksellers and publishers have argued that the Justice Department’s lawsuit will allow Amazon.com to operate as a monopoly.”
A lot more blah and faux concern for the poor traditional publishers and the close:
“Is Amazon.com about to reshape the publishing industry?”
They already have. Just ask E.L. James, Amanda Hocking, or Hugh Howey
And here is an excellent analysis of why traditional publishing is broken: