Consumer Group: E-book Price Fixing Costs Big Bucks [ Edited ]

[Ya_Ya]

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Nallia wrote:
Eh, B&N's hands aren't clean either. It's done its share of pushing competitors out of business and was very good at it for a long time. I've been a loyal customer for many years, but I can't pretend they're innocent victims.

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Oh, they aren't.  I think their hands are a little less grimy than some, but they didn't just put down the Ivory...

Unfortunately, this will probably put everyone except Amazon out of the ebook business; perhaps Google will bother to keep selling and take the loss but I doubt B&N will be selling ebooks in 2 years, if they're even still in business. I don't know that Sony or Kobo can afford it either...

[MacMcK1957]

I just saw an article last week that ebook sales have gone from $78 million in 2008 to $1.7 billion last year. One of the things we need to remember is that this is a market in Its virtual infancy. We had issues with a single outlet engaging in predatory pricing to try to dominate the market. Then we saw what appeared to be a concerted effort by several content providers, led by a different delivery outlet, in what certainly looked like it could be collusion in price-fixing. Fighting one abuse with another? Maybe. Neither is something we want to see, and I can't believe those are the only options. This is a long way from over. We're still in early innings. What is the long-term market going to look like? What pricing models? What delivery methods? No way to know what the end result is going to look like, but I'm sure it's going to see a lot of changes.

[Ya_Ya]

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MacMcK1957 wrote:
... I can't believe those are the only options. This is a long way from over. We're still in early innings. What is the long-term market going to look like? ...

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It's pretty clear that there won't be a long-term market other than Amazon monopoly.  B&N can't afford to take a $3 loss on one ebook let alone multiple millions of ebooks...  And from what I know of Sony, it can't.  Maybe Kobo can; I'm thinking not, but I have no data to back it up.

I don't disagree that there has to be a solution, but if Amazon's competition can't stay in business until that better solution is found, it won't ever be because Amazon will be able to do exactly as it likes.  And if/when Amazon is the only game in town, I doubt they'll continue taking a $3 loss per ebook...

[MacMcK1957]

If DOJ is taking a good look at the ebook business, you can't help but wonder whether they might have dropped a quiet word in Amazon's ear that they would be watching. Holder specifically announced a commitment to maintaining a competitive marketplace in ebooks. Might that have been a gentle hint directed at Amazon? One can only hope. There are remedies for predatory pricing if the conduct is considered egregious enough, and Amazon could certainly meet that standard.

[Ya_Ya]

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MacMcK1957 wrote:
If DOJ is taking a good look at the ebook business, you can't help but wonder whether they might have dropped a quiet word in Amazon's ear that they would be watching. Holder specifically announced a commitment to maintaining a competitive marketplace in ebooks. Might that have been a gentle hint directed at Amazon? One can only hope. There are remedies for predatory pricing if the conduct is considered egregious enough, and Amazon could certainly meet that standard.

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One should hope, but do you really see it happening?  I don't. 

[MacMcK1957]

I always hope. I thought Holder's phrasing sounded a bit pointed. We'll have to wait and see if Amazon jumps back into their old practices, or if there are consequences if they do. Also, I have to wonder whether Google is going to want to become a major player. They could make things interesting.

[Ya_Ya]

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MacMcK1957 wrote:
I always hope. I thought Holder's phrasing sounded a bit pointed. We'll have to wait and see if Amazon jumps back into their old practices, or if there are consequences if they do. Also, I have to wonder whether Google is going to want to become a major player. They could make things interesting.

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Yeah, I like to think of myself as a realist, but I'm a pessimist.  

Although, you do have a good point.  Google could absolutely be the epub alternative if Amazon does its thing and gets away with it.  Google can hold out as long as Amazon (probably) and might actually prevent the monopoly if they care to.

[keriflur]

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Ya_Ya wrote:

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MacMcK1957 wrote:
I always hope. I thought Holder's phrasing sounded a bit pointed. We'll have to wait and see if Amazon jumps back into their old practices, or if there are consequences if they do. Also, I have to wonder whether Google is going to want to become a major player. They could make things interesting.

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Yeah, I like to think of myself as a realist, but I'm a pessimist.  

Although, you do have a good point.  Google could absolutely be the epub alternative if Amazon does its thing and gets away with it.  Google can hold out as long as Amazon (probably) and might actually prevent the monopoly if they care to.

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Google is more diversified and more streamlined than Amazon.  Amazon still uses shipping to deliver product (meaning they also have the overhead of warehouses) while Google does everything digitally.  They've got what it takes to take Amazon head to head for longer than Amazon will be able to do it.  We'll see if they want to.

Given that B&N's readers are Android-based (and I believe Kobo's are too, though I'm not sure), Google may want to.  It wouldn't be the first time they went to bat to protect one of their hardware manufacturers.

I'll be interested to see what happens with Apple here also.  I didn't see anything in this morning's announcement saying that the settled pubs can't sell through Apple, just that the current contracts were null and void.  I wonder if Apple will try to price-compete with Amazon, or if they'll bank on their users to see the ibookstore as superior to Amazon.  I know that in the last few years they've made it a lot harder for the other ebookstores to sell on the idevices - maybe that's the route they'll continue to take.

[Ya_Ya]

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MacMcK1957 wrote:
We'll have to wait and see if Amazon jumps back into their old practices, or if there are consequences if they do. 

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geertm and Doug are having a discussion on the NOOK Book board that applies.

Apparently the terms will prevent Amazon from doing so; they can enter into single year agency agreements prohibiting total discounts from being greater than the retailer's total commission for that year...   

(I'm paraphrasing Doug; I haven't read the terms yet.)

[MacMcK1957]

The agreement terms kind of imply that DOJ is understanding of the Amazon circumstances that led, at least in part, to the agency model setup. So they've crafted an agreement that still allows the booksellers to prevent Amazon from dumping. Be amazing, wouldn't it, if DOJ announced they were committed to maintaining a competitive marketplace and actually accomplished it?