Amazon Battles Apple By Arm-Twisting Publishers 137
Posted
by
Soulskill
from the slapfight-of-the-titans dept.
from the slapfight-of-the-titans dept.
bizwriter writes "Apple has upset the e-book pricing cart by agreeing to a so-called agency model, where the publisher sets the price and the seller takes a cut. This goes contrary to the degree of control Amazon likes, so although it apparently gave in to Macmillan back in February, it turns out that Amazon continues twisting arms. The problem publishers face is that Apple has a most-favored-nation clause, so it gets the best deal that the publishers offer. If the publishers give in to Amazon, then they also have to provide the same terms to Apple."
Re:Ambiguous title (Score:1, Insightful)
if all the idiots stopped posting, this site would fall silent
huh? (Score:4, Insightful)
You're really concerned what's going to happen to your ebooks when you're dead? Taking corporate paranoia to the afterlife is a little extreme, no?
Re:Meanwhile (Score:4, Insightful)
Because Apple is the one with the contracts that (potentially) hurt Amazon's business (whereas Barnes and Noble is trying to run the same sort of business as Amazon).
Re:huh? (Score:5, Insightful)
You're really concerned what's going to happen to your ebooks when you're dead? Taking corporate paranoia to the afterlife is a little extreme, no?
I don't have to buy a different set of eyes to read books purchased at different stores. They all work, as is. Where as, with ebooks, once you have a collection from Amazon, if you EVER want to read them again, you must do so on an Amazon supplied reader. If at any point in the next couple of years, Amazon decides to stop manufacturing those readers and yours dies, all of your books stop being readable.
We already know with DRM'ed music, that companies have taken their tracking servers off line, making moving the music to new hardware IMPOSSIBLE.
If I own something, I own it. I don't need the entity I bought it from to give me permission to use it.
First they ignore you.... (Score:4, Insightful)
Then they ridicule you: "Ho ho - tiny little screen; who'd buy one of these toys?"
Then they fight you: "Crap - we better make our own ebook reader and screw around with pricing to protect ourselves. But we're kinda late and our pricing strategies are reactive and ill thought out"
Then they loose: "Double crap - all our best selling authors are now publishing their own book directly on the Kindle and taking 85% of the revenue rather than the 10% we used to give them. Ingrates!"
Feel free to bookmark this post and come back to it in 5 years time to see how it all came true.....
Wait...what?? (Score:3, Insightful)
twisting is good, though (Score:4, Insightful)
The headline makes it sound like Amazon is doing something bad. But Amazon is twisting publishers' arms to sell their books for less than they would otherwise. Publishers have wanted to charge excessively high prices for their books. And Apple has been trying to lure them by letting them get away with it.
Re:This is unexpected, how? (Score:3, Insightful)
Competition from a new contender that is known to be a strong player causes the strongest early market entrant to throw a hissy fit, news at a 11.
Until I can actually BUY an e-book, not rent them for life, the entire market will remain irrelevant to me.
There are plenty of DRM-free epub titles out there. Just none that I want.
Re:Alternate Headline (Score:4, Insightful)
Huh? So Apple basically says "we follow whatever retail model you want, but if you give somebody else a discount, you have to give it to us as well".
How the hell is that strongarming? Of course anybody would always fight for getting a deal that at least matches what competitors get. Those have got to be the weakest demands any company with some market power has ever negotiated.
Re:What's best for consumers (Score:1, Insightful)
"[. . .] music publishers are making less money."
Wrong. Music companies are making less money per sale.
Re:huh? (Score:2, Insightful)
Ok seriously, this is slashdot (not Sparta). Anyone reading this page should be able to bypass DRM on an ebook rather easily. If you feel that strongly that you own an ebook (which I agree you do), then look outside the DRM encased format you bought the title in.
This really goes back to the classic sense of the term "hacker", taking something apart and making it work for you.
iphone runs both the B&N ereader and the Kindl (Score:4, Insightful)
Re:What's best for consumers (Score:4, Insightful)
While it doesn't always happen, the company that provides the best prices and best selection to the consumers should be the winner. In music Apple unbundled the album and created a reasonable price point. More music is being sold, but music publishers are making less money. Consumer wins. In publishing the total cost of a book should be authors cut + cost of manufacturing + cost of distribution + marketing costs + profit for publisher + profit to distributer = total cost of book. E-books should dramatically reduce the cost of manufacturing and distribution and if things follow the music model, more books will be sold allowing for a reduction in profit margin due to volume. The consumer wins, if Apple and Amazon can strong arm the publishers not to add savings from manufacturing and distribution to their profit margins.
This particular case is Apple giving the publishers a way to strong-arm Amazon and increase prices for ebooks by 50%. If you want to look at it from the perspective of a consumer, then Apple's entrance to the market isn't very good. The funny thing is that Amazon did the same thing to Apple a few years ago by introducing the agency system to mp3 sales. The difference is that Amazon provided a superior product for the same or a lower price that forced Apple to then improve its own product by removing DRM. This time Apple is forcing Amazon to raise prices, so it's not quite as fun for those of us buying books.
Re:First they ignore you.... (Score:3, Insightful)
I think Apple's way creates a more sustainable market place for the consumer while maintaining quality...unlike Amazon model, which is more akin to walmart.
Re:What's best for consumers (Score:3, Insightful)
Apple didn't remove DRM because it faced pressure from Amazon, it removed DRM at the earliest possible opportunity that it could, as one of the original stated goals of the iTMS - as soon as they were able to change the deal with the music companies they did so (and in turn gave up the "one price" model that had been in place before, and moving to a variable pricing model).
While it may look like this is a bad deal for consumers, I think that ultimately it will balance out. Amazon's model is very similar to that of Wal Mart - a giant that can essentially dictate the market conditions, making it hard for smaller retailers and encouraging a monoculture. Large supermarkets and retailers like Amazon and Wal Mart reduce the choice for consumers, and in the case of WalMart, can actually dictate the content of your product (or they can refuse to stock it, and cost you a gigantic portion of your sales).
Apple's model switches it around a little, and allows the publisher to set a price, and I am sure that they will try to set the prices high (I mean, who doesn't want to maximise their profits), but if it's too high then no one will buy. Eventually the sweet spot will be released.
I am not a fan of retailers like WalMart gaining too much control of a market - it only puts pressure on the supplier of the products to drive prices down, which in the long run is bad for the consumer (but hey, if WalMart sells milk 5c cheaper per pint, who cares that it forces smaller farmers out so only the mega-farms can economically produce milk?). If a model that favours publishers works, it will allow the rise of much smaller publishers who just simply couldn't survive under a "profit margin squashed to zero" approach. The rise of smaller publishers also means that the current big guys have to compete more on quality and price.
Re:huh? (Score:3, Insightful)
That's not an unreasonable point of view, however, there's a "truth in advertising" issue going on. If Amazon said, "We'll sell you this book as a physical object for $X or rent it to you for $Y" there would be little argument about the issue. However, that's not what they're doing. They are claiming to sell you the ebook. But if you buy an ereader that's better than theirs, you can't take the book with you. If they decide you don't deserve the book (the 1984 fiasco), they can take it away without due process.
So if Amazon wants to get into the book renting business, more power to them. But that's not what they're claiming to do now.
Re:Meanwhile (Score:2, Insightful)
Barnes & Noble's device is fairly decent, although its missing Wikipedia and some of the features could be better done. Why is this is being set up as an Apple vs. Amazon fight when, of the several companies putting out eReaders,
A few reasons:
1. When the Nook was announced, the buzz was Amazon vs. B&N. Now the iPad is the new product, and *that's* the one getting the buzz.
2. The iPad is leaps and bounds ahead of any of the current readers.
3. Apple's dominance with the iTunes store makes them a serious contender. No matter what media market they enter, it will be a tectonic shift when they do.
And in this particular case, the primary reason:
4. Amazon's current bout of "arm twisting" is in direct response to Apple's deals with the publishers.
The Nook didn't cause this, the iPad did.
Apple is the only one who doesn't actually have a device available for sale right now?
Yet somehow they've already sold hundreds of thousands of them.
But "for sale right now" isn't even a rational metric. The iPad had a lot of buzz going for it before it was even announced, and had already significantly affected the markets it's entering (and creating) long before the orders started being taken. The ebook market really isn't that much different with the Nook than it would have been without it. But that very same market has already been significantly altered by the iPad before the iPad was even available for purchase.
Re:What's best for consumers (Score:2, Insightful)
You couldn't be more wrong about Apple/iTunes/DRM if you had tried! /.'rs with their "i hAtoRzs teh aPPleZEs" attitude that kept the lie alive as long as it did.
Apple NEVER wanted DRM, DRM was shoved down their throats in an attempt by corporate weasels to force the consumer to buy elsewhere/anywhere but the iTMS.
Unfortunately, it was people most like
Re:Meanwhile (Score:2, Insightful)
I am open to it being a better reader, however until I can see one for myself and try reading for 4+ hours on it, I cannot judge whether it is a better ebook reader or not.
Surprisingly, unless you have some super inside secrets and have already used an iPad, you are unable to conclusively say it is superior at the task of reading ebooks. Most people are in this same category and may believe it is superior, but very, very few people are able to make a blanket statement about this issue.
Re:What's best for consumers (Score:3, Insightful)
So Apple's stated goals, on record, that they wanted to remove DRM had nothing to do with it whatsoever?
Remember, it wasn't Apple's choice to use DRM in the first place.
And if you think that artists get much from a $10 CD, you are mistaken - the iTMS (and other online distribution channels) have done more to put money in the artist's pockets than anything the big cartels have done in recent years, since it allows independents and small shops to get distribution to a wide audience - a difficult thing to get when the big players control the radio stations and have the money to manage the physical creation and distribution of CDs.
Just because Apple is going to enter this market (selling a product that they don;t set the price of) does not mean that authors are suddenly going to get screwed - that is happening already due to the publishers. eBooks may be a way for smaller authors and publishing houses to get some serious distribution going, in much the same way that music producers have done.
Apple may be a part of that solution, with a large and successful store with a broad audience. They won;t be the only player though.
Re:What's best for consumers (Score:2, Insightful)
The difference is that Amazon provided a superior product for the same or a lower price that forced Apple to then improve its own product by removing DRM.
This is entirely backwards. Firstly, Apple sold tracks without DRM before the Amazon music store even opened. Secondly, the only reason the Amazon store was opened was because Apple wanted to remove DRM, and the labels wanted a bludgeon to use against Apple on pricing. That Amazon was able to sell DRM-free tracks in the first place was because of the music industry's reaction to Apple's (downward) influence on pricing.