9 ms·

I for one applaud this effort and always viewed the agency model as anticompetitive, anticonsumer and arguably outright price fixing. Ebooks have essentially z

• deleted 15y ago
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• aiscott 15y ago
  I am at a loss to understand how the "agency" model is anti-competitive or price-fixing. I am hoping someone can just explain it rather than saying that it simply "is." The agency model is what keeps the price of apps on the app store low. Developers (agents) can charge whatever they want, but clearly that doesn't equate to automatic sales at whatever price. It is in fact a very competitive market. Nothing about the agency model, as I see it, in the example of the App Store has even a hint of being anti-competitive. How is this different for books? I just don't see it. But I am open to explanations. If anything is anti-competitive, it is selling at a loss so that nobody else can enter the market. That is what Amazon was doing. Price fixing requires collusion between the producers to all sell at the same price point. It's certainly possible this is going on with the big publishers in Apple's store, but that doesn't require Apple's participation in the collusion. It doesn't exonerate Apple either, it's orthogonal. In the wholesale model that traditional booksellers and Amazon use, it's still possible for publishers to price fix. It's possible for book sellers to price fix. It seems to me that Agency vs Wholesale doesn't really have much to do with the concept for price fixing. What am I missing?
  • gvb 15y ago
    This link makes some sense of it: http://blog.nathanbransford.com/2012/03/why-dojs-potential-lawsuit-over-agency.html http://blog.nathanbransford.com/2012/03/why-dojs-potential-l... It isn't the agency model that is the problem, it is how the Apple et al. coerced/enabled the publishers to price-fix and then allowed/enabled the publishers to impose that price fixing on Amazon. I still don't exactly understand why Apple and Google are being sued and not the publishers. [edit] It is Apple and five publishers according to the WSJ: "Three of the publishers have agreed to settle, according to court documents. Those are Hachette Book Group, Simon & Schuster and HarperCollins Publishers Inc. Under the settlement, those publishers will terminate any agreement they have with Apple regarding electronic books." http://online.wsj.com/article/SB10001424052702304444604577337573054615152.html http://online.wsj.com/article/SB1000142405270230444460457733... [/edit] Money quote: Along comes Apple and the iPad. Steve Jobs talked the publishers into the agency model - publishers set their own prices and they get 70% of the proceeds. [...] Publishers then turned around and imposed that agency deal on Amazon, which is the subject of the DOJ investigation [the agency model, not Amazon - gvb]. The end result: There really is more competition in the e-book world, but prices are higher than they likely would be if Amazon and others were able to discount as they saw fit.
    • rbarooah 15y ago
      Right - basically the argument is that publishers cooperated with Apple to raise prices, and prices actually did go up. Which raises a red-flag of anti-competitiveness. The counterargument is that this took place at a time when prices were artificially lowered because of Amazon's leverage over the publishers. When competition was restored, prices returned to a level set by the market.
      • jamesaguilar 15y ago
        And the counter-counter argument is that if it were really the prices set by the market that we were returning to, collusion would not have been required.
        • 15y ago
• tjoff 15y ago
  As a side note, I can often find a book online and can have it shipped to me for way less than it costs me to pay for the same book in an e-book format damaged with DRM. Sometimes I pay the premium just because I want to (don't know if that's just stupid) and sometimes I buy the book, just store it and read a pirated version of the ebook. But even if I buy an ebook I strip the DRM regardless of whether my kindle can manage the DRM. If the ebook was substantially cheaper than the real book (because it was subsidized or if I was paying less due to the DRM restrictions) I'd probably question my morality but as the prices are now I have no problem with it. A bit sad I have to go through hoops and be a criminal every time I buy a book though. The market is sick and with new players (apple, google) joining I would have hoped that there would actually be some competition?
• viggity 15y ago
  If you don't want to pay the price they are setting then don't buy the book, it is that simple. I as a producer should be able to set it at whatever price I wish.
  • adestefan 15y ago
    Yes, but you don't have the right to tell the retailer what price they must sell your product at. The trouble began when they went back to Amazon and said, "You must sell at the price we agreed on with Apple and nothing less."
    • Xuzz 15y ago
      No, but I think it's reasonable to just not sell through their market if they won't let you choose your end-user price. I feel the same way about my apps — I don't want to sell through the Amazon Appstore where they choose my price for me.
      • fpgeek 15y ago
        Part of the issue is that none of the publishers were willing to individually bear the the costs of not selling through Amazon. They were only willing to threaten that together. To continue the analogy: If, for instance, the Top 100 paid app authors of Android apps banded together to force Amazon and Google to change their terms by threatening to take away their titles that would certainly raise at least a few antitrust eyebrows.
        • rbarooah 15y ago
          This implies that Amazon had a monopoly position. This is further illustrated by the fact that they did delist MacMillan's paper books in retribution. Without Apple providing an alternative, Amazon controlled prices within the ebook market.
    • rbarooah 15y ago
      You do have the right to tell the retailer what price they must sell your product. It's called a contract. The retailer doesn't have to accept it. Without Apple, the publishers had no meaningful alternative ebook store so Amazon always had the upper hand in contract negotiations, even going so far as to threaten to delist their paper books if they didn't accept the terms.
• shawnee_ 15y ago
  The publishing industry has been ripe for disruption for quite some time now. The pieces of the puzzle are there. But still it remains very difficult for a talented writer to make a living without some kind of brick and mortar publishing house agreeing to represent that writer. So, this problem is especially interesting from the POV of a writer / aspiring writer. Historically, writers would snail-mail the first 1-3 chapters to various literary agencies or publishing houses, include SASE, and wait for the inevitable rejection. (And yes, they DID insist on snail mail; this I know from experience). Those few lucky writers who would land an agent to represent them would likely get an advance, and hope for decent first-run sales. The publishing house would be responsible for placement in book stores, contact/ promo with "Book of the Month" clubs, etc. And depending on how well that writer's debut novel did, the writer would either get another advance, or fade into obscurity. Any number of circumstances around a first run could make or break a writer. No piece of this old model was friendly to writers. J.K. Rowling was (now famously) rejected by every publishing house she sent Harry Potter to. The agency (Bloomsbury) that eventually agreed to buy and publish it didn't take on significant risk, and yet it has profited insanely from the success of her talents. It could be debated that back then, yes -- there was some risk associated with editing and formatting and typesetting and printing a hard-copy book. An agency would be right to take a "cut". But, aside from editing what part of the "book manufacturing" process is actually necessary now? At some level, literary agencies and publishing houses have to know, deep down, that their time as gatekeepers of literary evolution is coming to a close. But yet, they dig their heels in, and refuse to acknowledge that their costs are lower so their prices should be lower -- if there was any real competition going. Instead, they say, "our costs are lower so our profit should be higher" . . . and so far, it is working for them, because everybody in their industry has agreed to play by those rules. Writers sure aren't getting any more wealthy, but publishing houses are . . . One of the main problems with agency relationships is that they totally mess with the risk:reward model. Travel agents, insurance agents, real estate agents, literary agents, stock brokers -- their risk is minute compared to the risk of those they "represent" because the "agency model" encourages industry collusion. As long as every agent in the industry is doing the same thing, individuals are not accountable, and the mainstream society simply accepts it. The unfortunate thing is that the end sellers and buyers (writers and readers) are the ones who end up losing out.
• Steko 15y ago
  "Only Amazon seems to be interested in creating an ebook market rather than just gouging consumers." Oh please, prices are [edit] often [/edit] lower now then when Amazon controlled the market. Apply every observation you've made about "the agency model" to smartphone apps and your conclusions fall apart.
• electromagnetic 15y ago
  Agreed. This is probably the first time I've seen anything on Ebook pricing and not have to hit my head against the desk because people are being retarded with people calling for all ebooks to cost $.99 because they're cheap assholes, or people completely misunderstanding the fact that printing and distribution costs only attribute 20-30% of the cost of selling a book. (Retailer takes 30%. Printing/distribution, essentially the dead tree portion takes 30%, the publisher takes 30% to pay for the editors, etc., and finally the writer gets 10% (and their agent gets about 1%, or 10% of the writers cut.) Ebook pricing has been anticompetitive outside the Amazon market. Of paper books I own, I've (or my wife has) read over 90% of them. 5% are in my to-read list, and probably the last 5% are books that I've gotten out of nostalgia, or ones that I've said "I'm getting this one for when I have kids". That last 5% mainly consist of books that I personally haven't cracked open and read that book that's on my shelf, most that I've found at garage sales that are in great condition and I've said "I love that book, I'd rather see it go on my shelf than into a dump" and yeah when my kid gets old enough, that copy of Enders Game I found for $0.25 is so getting stuck in their hand. (supposing the printed word still exists in the next decade and kids understand how to read off of the mysterious bound fibres called 'books')
• vacri 15y ago
  They don't have zero distribution costs, they have (close to) zero shipping costs. Distribution is not just shipping.
  • Groxx 15y ago
    It seems like the other aspects you may be including in 'distribution' would fall more accurately under advertising. Placement on shelves in major chains, displays, flash banner ads, etc, are all much closer to advertising than they are to actual distribution, especially when it's digital. Placement on B&N's center display is equivalent to being on the landing page on Amazon. Both directly provide zero sales and move zero inventory (minus whatever is on B&N's stand), but expose them to many times more eyes.
    • vacri 15y ago
      Marketing is a fundamental part of distribution - if you're claiming wholesale catalogues (ie: marketing, 'hey folks, this is what we're selling') are not technically part of what a distributor does, you're moving the goalposts. There's also pipeline management - while product inflow is not physical entities in the digital world, there is still the issue of finding new products and managing digital license agreements. Being a 'distributor' is more than just 'sending out a product from storage'. If that's all you're doing, you're a 'shipping department', not a 'distributor'