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  (Source: girvin.com)
Apple is not part of the settlement talks with DOJ

The U.S. Department of Justice (DOJ) could sue Apple this week over allegations regarding raised prices of e-books via an agency sales model.

Last December, the European Commission opened a formal antitrust investigation into whether five international e-book publishers had been partaking in anticompetitive practices with the help of Apple and its e-book store iBooks. The five e-book publishers include Hachette Livre (Lagardère Publishing France), Harper Collins (News Corp., U.S.A.), Simon & Schuster (CBS Corp., U.S.A.), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany).

Traditionally, publishers sell physical books to retailers for about half of the cover price, which is considered a wholesale model. Retailers then had the ability to sell those books to customers for a lower price if they wanted to.

But when e-books came along, this model was challenged. Amazon started selling best sellers for as low as $9.99 to encourage its Kindle e-reader sales. Publishers were not happy.

Apple then came along with iBooks, and publishers began to worry that it would take over the book industry the way Apple's iTunes took over the music industry, where customers would choose to purchase cheap, digital books instead of physical books.

However, Apple struck a deal with publishers in 2010. An agency model was implemented, where publishers were allowed to set the price of a book and Apple would take a 30 percent cut. The only restriction was that publishers were not allowed to let rivals sell the same book at a lower price.

This model helped Apple because its original iPad launch occurred in 2010, which was coupled with iBooks. To assure a successful launch of the device, DOJ believes Apple cut the agency model deal with publishers, which turned out to be an anticompetitive move.

After the European Commission opened an investigation of this agreement, DOJ climbed aboard as well. After looking further into the situation, DOJ threatened Apple and the five publishers with a lawsuit just last month for allegedly conspiring to raise prices, which violates federal antitrust laws.

Now, DOJ may sue Apple as soon as today while still working to reach a potential settlement with the five publishers, according to Reuters. Nothing has been set in stone, but DOJ does plan to pursue Apple.

Source: Reuters



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Who is best for books?
By Tony Swash on 4/11/2012 11:41:27 AM , Rating: 2
Here is what I want. Whatever is best for books. Period.

I love books, I really love books, I like browsing them and I like buying them and like reading them. One of the things I love about the US is that your books are of a much higher physically quality than most European books.

I understand that E-books are probably the thing of the future but I personally don't like e-books much because the general craft of them (the typesetting etc) is often so poor, I much prefer real books. I don't want real books to go away.

I love Amazon and buy a ton of stuff there. But I also understand Amazon is killing a lot of traditional retailing and is trying to (or merely will in passing) kill most traditional book publishing with it's sales model. Maybe the Apple deal might protect the publishers which might mean I can keep my precious books. On the other hand maybe publishers are superfluous to the whole business and it's possible to have a healthy book trade without them and still let me get my precious real books from actual bookshops which I can happily browse.

I don't want a world of just e-books or a world where paper thin margins mean all real books become poorly made.

Does anybody have a deeper understanding of the whole issue and can explain who (Apple, the publishers, Amazon) is best in terms of protecting traditional book making and publishing?




RE: Who is best for books?
By Cheesew1z69 on 4/11/12, Rating: -1
RE: Who is best for books?
By Tony Swash on 4/11/2012 3:16:52 PM , Rating: 2
Cheesew1z69 - you have a crush on me!


RE: Who is best for books?
By retrospooty on 4/11/2012 11:52:49 AM , Rating: 2
"I much prefer real books. I don't want real books to go away."

I hear ya, but progress is progress. You've got to like the idea of sitting home one night and getting wind of a book you want to read and having it available. You are reading it within a minute or two, without having to go to a store. The reading experience may not be as enjoyable, but overall what you gain outweighs what you lose. That and it saves companies on production and shipping cost, so hopefully eventually that discount is passed on to consumers (not by companies generousity, but by competition).


RE: Who is best for books?
By lightfoot on 4/11/2012 12:03:05 PM , Rating: 2
quote:
Amazon is killing a lot of traditional retailing and is trying to (or merely will in passing) kill most traditional book publishing with it's sales model.

Amazon is killing book retailers, not book publishers with their retail model of sales.

With this model (as it always has been) book publishers set a wholesale price and sell books at that price to all resellers. The resellers can then sell the book at any price that they choose - they now own the book and the publisher has already been paid in full. Amazon selling the books at or near cost hurts other resellers, but from the publisher's perspective it doesn't matter. If they sell a million books it doesn't matter if Amazon sold all of them or only a fraction of them. Either way the publisher sold a million books and got paid for them.


RE: Who is best for books?
By Solandri on 4/11/2012 2:19:46 PM , Rating: 3
Actually, the old book publishing model needs to die too. Basically it's a few dozen publishers deciding what millions of people will want to read. The authors have to pitch their books to a publisher, where a couple people read it and decide on behalf of millions of readers if it will/will not sell. If they say no, the author has to shop around with a different publisher. If they say no, shop around some more. Until either one says yes or the author gives up. Books which might appeal to niche markets rarely get past this process (though they tend to be more flexible than niche music or movies).

The new reality is that authors will self-publish and people on the Internet at large will decide what is/isn't "publication-worthy" via word of mouth. The publisher's job (editing, proofreading, formatting/typesetting, and some marketing and publication) all will be spun off into a la carte services. Authors will hire an editor to proofread/edit, a graphics artist for illustration and cover art, and optionally a marketer to increase the odds of their book becoming a "hit" via word of mouth. The traditional publisher is dead, they're just zombies who are gonna fight it until they run out of money and influence over the copyright laws.

It's the same thing that has to / is happening in music and video production. The power of the publishers / studios as gatekeepers to media is evaporating. Due to the internet, there's no longer any barrier preventing any joe in some random house in the world from reading / listening to / watching something created by another joe in some other random house.

The next big gatekeeper is going to be the shared, verifiable (to minimize astroturfing) review services which use algorithms to tailor their recommendations to your individual tastes. Amazon does this - it will make new suggestions based on your past purchases and browses. This is exactly what's needed to steer customers to new books / songs / movies they may like when faced with tens of millions of choices from wanna-be authors, singers, and directors. If the company providing this service is also the one selling your books, it's a service for which authors will gladly pay 30% of their revenue.

If the publishers/studios had been smart, they would've been dumping their money into researching this customer preference classification and prediction in the 1990s. But they weren't. They were so convinced their old business model had to survive that they dumped that money into researching DRM instead. So now they're gonna lose their status as gatekeepers to the companies which did work on this.


RE: Who is best for books?
By tayb on 4/11/2012 1:09:29 PM , Rating: 2
I could care less about real books. They are a complete waste of energy, resources, and money from the production stage all the way to sitting on the shelves at a retail store. The waste is even more egregious and excessive when you realize that it could ALL be avoided by distributing the same book digitally.

A world of e-books only is by far the most desirable. Publishers go from a "must have" to a "nice to have" and allows independent authors to create, price, and sell their content without having to worry about the risk involved with printing and selling millions of copies. The risk is simply the time spent writing the book. THAT is a book world I want to be a part of.

Not some world where publishers collude on prices to keep everything expensive so they can avoid the wave of the future and appease a vocal minority who are stuck in the 90s.


RE: Who is best for books?
By Tony Swash on 4/11/2012 3:24:29 PM , Rating: 2
quote:
I could care less about real books. They are a complete waste of energy, resources, and money from the production stage all the way to sitting on the shelves at a retail store. The waste is even more egregious and excessive when you realize that it could ALL be avoided by distributing the same book digitally.


You have no soul!! Just kidding. I love books and love them as physical objects. I used to run a business way back when that designed, typeset and printed books, I still love the smell of the ink on the page. Varnished full color on a matt 135gsm high quality stock - ahh heaven. I like buying books from Amazon, cheap and easy, but there is nothing like spending an hour or two just browsing the shelves in a good and preferably slightly quirky bookshop discovering all sorts of stuff you never knew existed.


DOJ are you awake?
By shadowamazon on 4/11/2012 9:20:23 AM , Rating: 5
What about creating frivolous patents with the sole purpose of suing its competitor? That's not anti-competitive?




RE: DOJ are you awake?
By SKiddywinks on 4/11/2012 9:38:33 AM , Rating: 5
This is a 6


Settlement???
By DrApop on 4/11/2012 1:29:41 PM , Rating: 2
So what does "settlement" mean? Does that mean they still can operate using the agency model or is the agency model done away with?

Or does the suit center around the collusion with Apple rather than the agency model itself?

Either way it sounds like the government is going to make money from this while the consumer will still have to pay the high prices for ebooks.

Either way, I haven't paid over $9.99 for an ebook and I won't. The big publishers have lost my complete business by jacking up the prices. While I do miss reading several authors who publish with the big publishers, there are thousands upon thousands of terrific ebooks out there that are priced just right rather than the rip-off price.




RE: Settlement???
By ritualm on 4/11/2012 1:59:19 PM , Rating: 2
It means they merely have to pay a fine and be able to walk away without admitting any wrongdoing on their part. If they get sued and they lost, the fines get a lot bigger because they are then found guilty of the crap they're doing.


RE: Settlement???
By lightfoot on 4/11/2012 2:48:48 PM , Rating: 2
A settlement almost always requires that the offending action ceases, even if they don't admit wrongdoing and pay a fine.

In this case either the agency model or the most-favored nation would almost certainly be eliminated.


Apple patents
By rich876 on 4/11/2012 10:28:04 AM , Rating: 3
Apple is always in court getting sued or being sued. What's wrong with that Company? It's okay for them to steal a patent, but when an invalid patents of theirs, which should have never been accepted in the first place, gets used by other companies, they react with vengeance.

I'll never buy a product from them. They are just too greedy.




RE: Apple patents
By retrospooty on 4/11/2012 11:48:49 AM , Rating: 2
"Apple is always in court getting sued or being sued. What's wrong with that Company?"

I can sum it up in 2 words... "Buncha asshats"

Plain and simple. Apple for all its nice products and advancements to the industry, is run by greedy children. The top greedy child died last year, but there are plenty of greedy children underneath that are keeping the sue forst innovate second mentality going.


Tip of the Iceburg
By lightfoot on 4/11/2012 11:40:52 AM , Rating: 3
The problem is that Apple now uses its dominant size and market position to dictate terms to other companies. Apple no longer negotiates with anyone. When AT&T sells an iPhone, Apple gets all the profit. When AT&T sells a similarly priced Android (or any other phone OS) AT&T takes a large chunk of the profit and the manufacturer gets almost nothing. Android sales now effectively subsidize iPhone sales.

How is it possible that Apple has negotiated such contracts without abusing its dominant position? They didn't.

And this extends to every supplier in their supply chain. In order to get Apple's business they have to be willing to shift nearly all the profit to Apple. If you don't get Apple's business you have to close up shop.

If this reduced profit was then passed on to the end user this could be portrayed as benefiting the market and the consumer. The fact that Apple just pockets the money does not benefit anyone, and thus is an abuse of their market power. Suppliers get harmed, customers get harmed and competition gets harmed. Only Apple wins, and they win because they cheat by manipulating the market.

The only solution I see to this problem is to break Apple into two companies. A software/services company and a hardware company.

So long as Apple controls both sides, competitors can not enter the market, and they simply can't compete.




They have already been sued
By tayb on 4/11/2012 12:31:32 PM , Rating: 3
http://www.bbc.co.uk/news/business-17681137

I hope the bring the hammer down on all of them.




Stupid is as stupid does
By Motoman on 4/11/12, Rating: -1
RE: Stupid is as stupid does
By Smilin on 4/11/2012 10:27:08 AM , Rating: 3
The stupidity here is thinking anyone will fall for such a flagrant oversimplification of the issue.

I'm an intelligent consumer who buys ebooks and I won't explain my reasoning for doing so outside of an honest discussion. Certainly not to hyperbolic trolls.


RE: Stupid is as stupid does
By Motoman on 4/11/12, Rating: -1
RE: Stupid is as stupid does
By Etsp on 4/11/2012 12:10:26 PM , Rating: 2
Can you provide me a specific example/clause in the TOS of an eBook retailer that explicitly denies your ability to make an unencrypted backup copy of your eBooks?


RE: Stupid is as stupid does
By Motoman on 4/11/2012 2:16:26 PM , Rating: 2
Why don't you show me in the TOS of any e-book retailer how they would address these issues for me (copied from my own post a little farther down):

I can resell it if I want to. Can I resell an e-book?

I can gift it to someone. Donate it to the library.

Can I do that with an e-book?

Can the retailer come to my house and take back a real book that I'd bought from them, the way Amazon electronically deleted the e-book 1984 from people's devices after having sold it to them?


RE: Stupid is as stupid does
By ritualm on 4/11/2012 12:58:03 PM , Rating: 2
Smart people read. Dumb people troll.

Quit trolling.


RE: Stupid is as stupid does
By tayb on 4/11/2012 1:12:14 PM , Rating: 2
Have you ever even purchased an e-book? This is not like a library e-book rental. When you buy an e-book it is yours to keep and there is absolutely nothing stopping you from backing it up, re-downloading it, distributing it to multiple people, etc. You are confused.


RE: Stupid is as stupid does
By SPOOFE on 4/11/2012 2:02:31 PM , Rating: 2
quote:
But you're abdicating all ownership rights.

So if I buy a physical book, I own all the content of that book? Can I go start selling copies of that physical book?

No?

... Huh. For a second there, I actually suspected that maybe, just maybe, you had a salient point.


RE: Stupid is as stupid does
By Motoman on 4/11/2012 2:14:52 PM , Rating: 1
I can resell it if I want to. Can I resell an e-book?

I can gift it to someone. Donate it to the library.

Can I do that with an e-book?

Can the retailer come to my house and take back a real book that I'd bought from them, the way Amazon electronically deleted the e-book 1984 from people's devices after having sold it to them?

Your suspicion was right. You should have gone with it.


RE: Stupid is as stupid does
By Smilin on 4/11/2012 2:42:26 PM , Rating: 3
Your oversimplification continues as does your offhanded dismissal of logic.

Convenience is not an "excuse". It's what's known as a "reason".

Find me a magical printed book that can leap through space and time from My Wife's Kindle to mine while I'm on business across the country. Find me an entire book store that fits in a pocket. That is what you call an excuse?

In fact I took two books with me on business. Both of them combined weighed less than 6oz. A big deal when lugging crap through airports. My wife reads a book a day sometimes but typically 'just' two a week. When we go on vacation she would have to bring a stack to heavy too even carry.

Paying more for a digital download than the real thing is exactly what this lawsuit is about. I look forward to prices going back to 1/2 or less as they were before.

And just one last point: When you buy an e-book nobody makes you sign a contract that says you can never ever buy a physical book again. There are some classics I like in hardcover on my shelf. 1984 would be one (I own a several hardback, paperback, and an electronic versions of it).

I don't think you can come to grips with people seeing the same facts and making a different decision than you. Your reaction is to dismiss their logic as emotion or deception.

Get a grip.


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