3 ms·

I've always held that the "agency model" pushed by Apple is anticompetitive. The argument for it is that ebooks are different to physical books in that they are

by cletus 15y ago

I've always held that the "agency model" pushed by Apple is anticompetitive. The argument for it is that ebooks are different to physical books in that they are infinitely copyable (which is obviously true) and that leads to books being priced at or near cost and publishers don't want to be "commoditized" in that way. But that's a BS argument. A traditional bookshop will have a 100% markup for recommended retail price to cover costs (store, employees, utilities and so on). The publisher's half will be divvied up a number of ways including editing, printing, distribution and let's not forget the author (10% or less). Amazon of course reduced their overhead (no physical store) and increased their volume cutting down that markup significantly. They may have through volume been able to negotiate a lower cost from the publisher but I have no evidence of that. Ebooks change the model drastically. Printing costs disappear. Editing, the author's cut and the publisher's profit remain. Distribution costs are basically zero. What's more, ebooks have no resale market (unlike, say, college textbooks). This reduced utility should lower the sticker price. Yet publishers seem stuck in a mindset of looking at nothing more than the retail price as some kind of metric for profit. Publishers should be embracing ebook distribution. It lowers their costs and (in theory) increases their profit through no printing and distribution costs. Their needs to be structural separation between wholesale and retail market segments and that means publishers shouldn't be able to dictate the retail price. Period.

Steko 15y ago
Your "argument for it" is a complete straw man. The real argument for the agency model is that the publishers own the rights to publishing and can set terms as they wish. If they want to wholesale ebooks they can do so... and they can also decline to do so if such is their desire. If they want to use an agency model they can and can also decline to do so. The publishers presumably want to sell books using the model that favors them (cf Adam Smith) and so they have chosen the agency model. What very well may be anticompetitive about this situation is for all the large publishers to get together and collectively move to a model that knowingly results in higher consumer prices. IANAL but on it's face that looks pretty bad and I'd guess based on reported emails that they've pretty clearly crossed the line on price fixing laws. Presumably their defense is that the initial "lower prices" were loss leaders by monopolist Amazon not true market prices and there's probably some truth to this and that's probably why we'll see a non-trivial but non-blockbuster settlement in the low eight digits.
- mikecane 15y ago
  >>>The real argument for the agency model is that the publishers own the rights to publishing and can set terms as they wish. You lack knowledge of publishing. This model was struck down by the courts in the 1970s. Had it still been in effect, there would have never been a videocassette rental market -- which some studios, notably Warners, tried to subvert by tiered pricing for cassettes that were deemed "Rental Only." Book publishing is trying that trick now too: Do you like the fact that Random House has jacked up the pricing of eBooks to extortionate levels to public libraries -- many of which are supplementary funded by tax dollars, perhaps even yours? It's the same damn eBook you can buy for yourself, only 4x or more in price. This while libraries pay far less for print books. Listen, unless you've an understanding of the history of book publishing, all you've got as an argument is some ideology, not fact. And the fact is that the current arguments in book publishing go waaaaay back in time, as far back as 1922: Book Publishing: This Isn’t 1922 Any Longer http://mikecanex.wordpress.com/2012/02/06/book-publishing-this-isnt-1922-any-longer/ http://mikecanex.wordpress.com/2012/02/06/book-publishing-th... The most damaging thing that ever happened to book publishing is something none of you know about. A change in the tax laws in the 1970s that classified book inventory the same way as factory inventory, thus making it no longer economical to keep books in print and in warehouses. This led to a sweeping change in the availability of books, creating shorter print runs and far less availability of books published even within a year. None of you should be sympathetic towards the publishing industry. The obstructionism that is dooming them is the product of their own inaction and action. [typo edits]
FreakLegion 15y ago
As regards technical publishing at least, you drastically overestimate the cost of printing. A $30 book costs a couple of dollars to print, depending on the size of the run. This is to say that removing printing from the equation has very little impact on the cost of professional book production. Editing and production are the real costs, and they're not insignificant.

by cletus 15y ago

Steko 15y ago

Your "argument for it" is a complete straw man. The real argument for the agency model is that the publishers own the rights to publishing and can set terms as they wish. If they want to wholesale ebooks they can do so... and they can also decline to do so if such is their desire. If they want to use an agency model they can and can also decline to do so. The publishers presumably want to sell books using the model that favors them (cf Adam Smith) and so they have chosen the agency model. What very well may be anticompetitive about this situation is for all the large publishers to get together and collectively move to a model that knowingly results in higher consumer prices. IANAL but on it's face that looks pretty bad and I'd guess based on reported emails that they've pretty clearly crossed the line on price fixing laws. Presumably their defense is that the initial "lower prices" were loss leaders by monopolist Amazon not true market prices and there's probably some truth to this and that's probably why we'll see a non-trivial but non-blockbuster settlement in the low eight digits.

mikecane 15y ago
>>>The real argument for the agency model is that the publishers own the rights to publishing and can set terms as they wish. You lack knowledge of publishing. This model was struck down by the courts in the 1970s. Had it still been in effect, there would have never been a videocassette rental market -- which some studios, notably Warners, tried to subvert by tiered pricing for cassettes that were deemed "Rental Only." Book publishing is trying that trick now too: Do you like the fact that Random House has jacked up the pricing of eBooks to extortionate levels to public libraries -- many of which are supplementary funded by tax dollars, perhaps even yours? It's the same damn eBook you can buy for yourself, only 4x or more in price. This while libraries pay far less for print books. Listen, unless you've an understanding of the history of book publishing, all you've got as an argument is some ideology, not fact. And the fact is that the current arguments in book publishing go waaaaay back in time, as far back as 1922: Book Publishing: This Isn’t 1922 Any Longer http://mikecanex.wordpress.com/2012/02/06/book-publishing-this-isnt-1922-any-longer/ http://mikecanex.wordpress.com/2012/02/06/book-publishing-th... The most damaging thing that ever happened to book publishing is something none of you know about. A change in the tax laws in the 1970s that classified book inventory the same way as factory inventory, thus making it no longer economical to keep books in print and in warehouses. This led to a sweeping change in the availability of books, creating shorter print runs and far less availability of books published even within a year. None of you should be sympathetic towards the publishing industry. The obstructionism that is dooming them is the product of their own inaction and action. [typo edits]

FreakLegion 15y ago

As regards technical publishing at least, you drastically overestimate the cost of printing. A $30 book costs a couple of dollars to print, depending on the size of the run. This is to say that removing printing from the equation has very little impact on the cost of professional book production. Editing and production are the real costs, and they're not insignificant.