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Books The Almighty Buck Apple

Amazon Battles Apple By Arm-Twisting Publishers 137

Posted by Soulskill
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."
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Amazon Battles Apple By Arm-Twisting Publishers

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  • So this has nothing to do with Arm processors? Oh well.

    • Re: (Score:1, Informative)

      by TSchut (1314115)
      Nor has it anything to do with fruit or one-breasted women riding horses and shooting arrows.
    • So this has nothing to do with Arm processors? Oh well.

      A clearer title would be "Amazon Battles Apple by Strong-Arming Publishers"

  • Meanwhile (Score:4, Informative)

    by zippthorne (748122) on Saturday March 20, 2010 @01:08PM (#31550262) Journal

    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, Apple is the only one who doesn't actually have a device available for sale right now?

    • Re:Meanwhile (Score:4, Insightful)

      by maxume (22995) on Saturday March 20, 2010 @01:16PM (#31550340)

      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).

    • Why is this is being set up as an Apple vs. Amazon fight when, of the several companies putting out eReaders, Apple is the only one who doesn't actually have a device available for sale right now?

      Because B&N device is still just getting started - meanwhile iPads are already selling at a good clip, and it's pretty obvious they are going to be a major player from the outset. I don't think the B&N reader is going to hold out very well long term, although I'd list them as a possible dark horse... but

    • Re: (Score:3, Informative)

    • Exactly, there's Sony, B&N and others. I think par tof Amazon's success is that the press talks about no one else. Now we have Apple who has, imo, a very half-assed device and they're unfortunately getting more attention then superior competition which means they'll probably get more sales than they deserve.

      The press needs to do a proper job rather than trying to build up some drama to report on.
      • Re:Meanwhile (Score:4, Interesting)

        by teg (97890) on Saturday March 20, 2010 @03:53PM (#31551570) Homepage

        Exactly, there's Sony, B&N and others. I think par tof Amazon's success is that the press talks about no one else

        I think Amazon's success is based on how easy it is to use, and get books on it. The Apple mantra, "it just works", sure applies there. Go to Amazon, purchase and a minute or two later, it's on your Kindle. Many others providing this hardware don't have as integrated a solution as Amazon does - other than B&N, probably none. Also, their hardware is good.

        Now we have Apple who has, imo, a very half-assed device and they're unfortunately getting more attention then superior competition which means they'll probably get more sales than they deserve.

        "Half-assed"? Apple does a lot of things, but "half-assing" is not one of them. They do, however, have evil lockdown schemes - even to the point of trying to censure publications in app form. Europe doesn't have the weird American "violence good, boobies very bad" attitude, so there have been cases of German magazines being censured by Apple [guardian.co.uk]. Other than the worrysome censoring and lockdown, I'm sure it's going to be a very good general purpose device. The Kindle is a specialized device - with e-ink, it'll last a lot longer and be a lot better when reading text books.

      • by node 3 (115640)

        Exactly, there's Sony, B&N and others. I think par tof Amazon's success is that the press talks about no one else. Now we have Apple who has, imo, a very half-assed device and they're unfortunately getting more attention then superior competition which means they'll probably get more sales than they deserve.

        What "superior competition" would that be?

        You mention that the press talks about Amazon more than Sony, and that that has played a role in Amazon's success. You're overstating things here. Sony's ebook reader and ebook services are inferior to Amazon's. B&N was the first real Amazon contender, and they got *plenty* of press out of it.

        Now the iPad, which blows away all existing ebook readers, is getting the press.

        The press needs to do a proper job rather than trying to build up some drama to report on.

        What are you talking about? The press isn't building up any drama here. The drama is taking

    • by Tharsman (1364603)

      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, Apple is the only one who doesn't actually have a device available for sale right now?

      For one because without being out the iPad had such a high level of pre-orders it's likely to be even more successful than the iPhone. http://www.newsfactor.com/news/Strong-Demand-Reported-for-iPad/story.xhtml?story_id=10300BOVCI9L&full_skip=1 [newsfactor.com]

      But it's not really an Apple Vs Amazon, it's a Publishers Vs Amazon, Amazon is loosing it's enjoyed monopoly on eBooks the day the iPad hits the streets and now publishers get options. Apparently, the Kindle will become a side market with the iPad being the main

    • Re: (Score:2, Insightful)

      by node 3 (115640)

      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

      • by mgblst (80109)

        You completely miss the point. The whole problem with Amazon/BN vs Apple, is that Amazon/BN make their money from books, whereas Apple will make their money from the hardware. Apple is not looking for much of a profit on books, just like it doesn't make much of a profit from Music or Apps. They are in the hardware game.

        • by node 3 (115640)

          You completely miss the point. The whole problem with Amazon/BN vs Apple, is that Amazon/BN make their money from books, whereas Apple will make their money from the hardware. Apple is not looking for much of a profit on books, just like it doesn't make much of a profit from Music or Apps. They are in the hardware game.

          That's exactly the reason that Apple's iPad is having such an effect on Amazon. The publishers got a taste of the agency model and want to take it to Amazon, and Amazon is playing hardball to tell them "no".

    • Apple is the only one who doesn't actually have a device available for sale right now?

      Actually Apple has had a device for portable eBook reading available for sale for the last year. The Kindle reader for iPhone/iPod Touch has been a free app for months now, and other eBook readers have existed for these platforms as well. What Apple hasn't had is their own eBook store to profit from.

  • by Auckerman (223266) on Saturday March 20, 2010 @01:08PM (#31550264)

    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.

    • huh? (Score:4, Insightful)

      by arcite (661011) on Saturday March 20, 2010 @01:13PM (#31550314)
      "Until I can actually BUY an e-book, not rent them for life, the entire market will remain irrelevant to me."

      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:huh? (Score:5, Insightful)

        by Auckerman (223266) on Saturday March 20, 2010 @01:19PM (#31550362)

        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.

        • Re: (Score:2, Insightful)

          by brucifer (12972)

          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.

          • by eric2hill (33085)

            That's not the point. Yes, DRM can be bypassed. But it's a pain in the ass. If I buy a book that has a lock on it, and I can only open the lock while in an Amazon store, then breaking the lock on the book is still damaging the item I've paid for. Sell me a book without the lock.

          • by HiThere (15173)

            I, personally, prefer to not break the law. So I'm not interested in "buying" ebooks that I don't then own.

            Of course, the other limits on e-books mean that they are only superior to paper books in a minority of situations. This means I'm not *that* interested in them anyway. But as I've given up on buying DVDs over DRM, I don't think that ebooks are likely to change my opinion, even if they *do* become the superior medium. (There's a couple of models I keep watching. If the prices drop enough, I may gi

            • by Skreems (598317)
              The odd thing is, the rental model has been proven to work quite well. Books inherently take a long time to get through, and you're probably not going to re-read them all that frequently. As such, it seems like the perfect medium to do a Netflix-type service. That way you're renting, but at a flat fee for access to ALL books, not just one book.
              • Re: (Score:3, Insightful)

                by blamanj (253811)

                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

                • by Skreems (598317)
                  Don't get me wrong, I agree with you completely that the current setup is flawed. I don't own any ebooks for exactly the reason you describe. All I'm saying is, the space seems perfect for a rental service like Netflix or the Zune "full access" music service, and I'm surprised that nobody's put one together yet.
                • by dangitman (862676)

                  If they decide you don't deserve the book (the 1984 fiasco), they can take it away without due process.

                  I wasn't aware that there were any due process [wikipedia.org] involved in Amazon selling electronic books, as Amazon is neither the government, or a court of law. Why do so many people on slashdot expect private companies to take on the role of government?

              • by Trinn (523103)

                I would like to note that I myself and many friends of mine can finish a decent sized novel in one or two days, so I wouldn't say books inherently take all that long to get through, it depends a lot on the individual. I'm not sure how much this impacts the rental model, but I would say the model that seems to work far better for most is the used bookstore model, not a true rental, but essentially you can always resale any [decent] book you've bought for a reasonable sum to put toward new purchases, and you

                • by Skreems (598317)
                  Well, inherently longer than a movie, for example, for which the rental model works quite well. The only problem with libraries is limited supply since they operate on physical items (or ridiculous approximations of physical items imposed by the publishers, even when eBooks don't have to be limited).
          • Anyone reading this page should be able to bypass DRM on an ebook rather easily.

            What eBook? Amazon deleted it off your Kindle while you were asleep. License terminated. DRM servers shutdown. End of story.

        • by node 3 (115640)

          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.

          Or, in this case, Apple. Do you think the third largest publicly traded company in the world is going away any time soon?

          For me, the convenience of something like the iBookstore outweighs the risks. So I might have to repurchase a handful of books that I'll want to re-read in the future if somehow Apple folds. That's just the cost of modern life.

          Life is too damned short to hold off on enjoying the things the world has to offer (including DRM encrypted books, music and video) just because in the future you m

      • You can actually inherit paper books.

        eBooks, over my dead body... what do you mean "okay"?

      • by kyz (225372)

        "Until I can actually BUY an e-book, not rent them for life, the entire market will remain irrelevant to me."

        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 think the key word here is RENT, i.e. "Want to keep having those books? Then you have to pay me money every single month. You'd better keep them in good condition too, because if you stop paying, I'm going to take them back. My books, baby, not yours."

        I don't know about you, but I prefer it when I only pay ONCE for a book, and can then do what I want with it, rather than RENT it.

      • by Palshife (60519)

        He meant the life of the company, not the purchaser.

        Besides, why shouldn't his books live on after he dies? Shouldn't he be able to give them to friends and family?

    • by kithrup (778358)

      What do you mean by "buy"?

      Since there is no physical medium, I don't think a "buy" model will ever happen. So that probably means no re-selling to, say, used book stores, or donating to libraries (which typically then sell the books you donate).

      If you mean, "without any DRM," then there's Baen's Webscription [webscription.net], which offers a variety of formats, all without DRM. And the Apple deal with publishers allegedly allows the publishers to decided whether or not they want the content DRM'd. (Gee, I wonder what the

    • Re: (Score:3, Insightful)

      by digitig (1056110)

      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.

    • by selven (1556643)

      Buy? Market? Who said anything [google.ca] about a market? [gutenberg.org]

  • by kithrup (778358) on Saturday March 20, 2010 @01:09PM (#31550276)

    This goes contrary to the degree of control Amazon likes

    Forcing an "agency model" on any retailer is going contrary to both history and market standards. The general model for booksellers is to buy wholesale, at somewhere around 40%-50% of MSRP, and then sell at some price between that and MSRP. Amazon has discounts of MSRP all the way from 55%, to only a few percentage points. Barnes & Nobles has similar prices (if you become a "B&N Member," for US$25/year, the prices are pretty much the same as Amazon's. A bit lower sometimes, a bit higher sometimes.)

    What's really going on here is power: the publishers have decided they don't want retailers undercutting each other -- that leads to a single player having market dominance, which allows them to try to force concessions (lower prices, content changes, etc.) from the publishers. As examples of this, see Amazon and Wal-Mart.

    When Apple joined the ebook market, however, they were able to take the same "we don't care about making a profit on content" attitude they have for music, and offer it to the publishers. And the market share Apple can offer with the iPad is probably at least as large as Amazon's current market share with is Kindle. (And unlike Amazon, Apple won't be paying the end-user bandwidth costs.) This gives publishers who are willing to sign up with Apple enormous negotiation power with Amazon -- over ebooks. Amazon's only negotiation power that can counter that is the physical book market.

    Personally, I would certainly be offended if someone said, "You will sell this product at a price we dictate, and only take 15%. You cannot charge more to make more money; you cannot try to maximize profits through selling more by offering it for less. And if 15% of an arbitrary price we set isn't enough for you to make profit -- or even enough for you to run your business, tough." And I'd fight it as best I could.

    Of course, that's also pretty much Amazon's attitude towards the publishers. So a pox on all of them, really.

    • by arcade (16638)

      I actually think it's perfect for us consumers that the various selling-points force the price downwards. It means that I as a consumer will get my goodies for a cheaper price.

    • by armareum (925270)

      Personally, I would certainly be offended if someone said, "You will sell this product at a price we dictate, and only take 15%. You cannot charge more to make more money; you cannot try to maximize profits through selling more by offering it for less. And if 15% of an arbitrary price we set isn't enough for you to make profit -- or even enough for you to run your business, tough." And I'd fight it as best I could.

      What the hell are you referring to? The publisher *is* allowed to set the price - and so clearly they *are* able to vary their profit per unit.

    • by droopycom (470921)

      This goes contrary to the degree of control Amazon likes

      Forcing an "agency model" on any retailer is going contrary to both history and market standards. The general model for booksellers is to buy wholesale, at somewhere around 40%-50% of MSRP, and then sell at some price between that and MSRP.

      This is another example of people clinging to an historical model. The same way MPAA/RIAA get blamed for trying to apply their old models to digital media.

      There is no history or market standard for ebooks. The general model for booksellers does not apply to e-booksellers.

    • by fermion (181285)
      When Apple joined the ebook market, however, they were able to take the same "we don't care about making a profit on content" attitude they have for music, and offer it to the publishers.

      I don't know where Amazon makes a profit, but I doubt it is on 9.99 eBooks. What Amazon has done with books is what Walmart has done with so many other products. Sell some items at a loss, or demand other products be sold wholesale at a price that causes the manufacturer takes a loss, or only cover fixed costs. Even if

  • Alternate Headline (Score:2, Interesting)

    by imsabbel (611519)

    Apple Strongarms Publishers: They are not allowed to sell it cheaper anywhere else!

    • Wait...what?? (Score:3, Insightful)

      by jamrock (863246)
      Apple "strongarmed" the publishers by agreeing to their retail model? Clearly you have a different definition of "strongarm" than most people...
      • ...the most favored nation clause.

        As someone who has been involved in negotiating a contract for the buyer with a most favored nation clause, they do seem wrong. You are either asking your supplier to lie to you, or to reveal the lowest price they charge anyone. Some contracts say this can't be revealed, though it is generally assumed it can't be revealed only when identifying the involved parties also.

        It completely eliminates the equality of negotiating positions. The saving grace for suppliers is th
    • by eggnoglatte (1047660) on Saturday March 20, 2010 @01:57PM (#31550634)

      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.

  • Lesser of the two... (Score:5, Interesting)

    by semiotec (948062) on Saturday March 20, 2010 @01:21PM (#31550372)

    One control-freak company wants to sell cheaper books, while another control-freak company wants to sell more expensive books?
    I know which weevil/weasel I will go with.

    and while this is just one side of the argument, but anyone who thinks Apple's deal with the publishers will work out better for the authors should read this:
    http://techcrunch.com/2010/02/07/its-nsfw-because-the-word-fuck-is-in-the-url/ [techcrunch.com]

    • by haystor (102186)

      One control freak company wants to sell more expensive hardware and one control freak company wants to sell less expensive hardware.

    • Re: (Score:3, Interesting)

      by digitig (1056110)
      And you end up with a cluster of devices, because it ends up with the books you want not all being available on the same device. Another triumph for market forces.
      • by semiotec (948062)

        I agree, and that's why DRM should be removed from ebooks as well, but that's not the argument I was making above.

        My point was if Apple/publishers win, ebook prices will go up. Publishers don't want to sell ebooks, because it cuts into their lucrative hardcover sales, and Apple doesn't give a shit about books (Steve Jobs: “People Don’t Read Anymore.”), they don't give a fuck if the ebook market implodes because the prices are too high and nobody buys them anymore. They already have the mus

    • One control-freak company wants to sell cheaper books, while another control-freak company wants to sell more expensive books?
      I know which weevil/weasel I will go with.

      and while this is just one side of the argument, but anyone who thinks Apple's deal with the publishers will work out better for the authors should read this:
      http://techcrunch.com/2010/02/07/its-nsfw-because-the-word-fuck-is-in-the-url/ [techcrunch.com]

      I'm waiting for Apple to take things to their logical conclusion and allow authors direct access to the market. They've already done this for programmers with the app-store and there are a few (too few) self published artists [apple.com] on the iTunes store. Now they need to do the same for video and books. The tools have become so powerful and cheap that talent can self-finance or crowd-fund through sites like Kickstarter [kickstarter.com] and the bottleneck left now is in the publisher/distributer cartels.

      • by semiotec (948062)

        yes, let's all wait for Apple to come to the rescue and ignore everybody else who's already trying to do that...
        and of course, nothing is real unless Apple does it.

        Scribd
        http://www.scribd.com/ [scribd.com]

        Amazon Self-Publish
        http://www.amazon.com/gp/seller-account/mm-summary-page.html?topic=200260520 [amazon.com]

        but you do know that publishers don't just "publish", right? editing is a crucial step and good or bad marketing can make or break an author.
        Even authors like Doctorow who freely distributes their contents online have editors

        • yes, let's all wait for Apple to come to the rescue and ignore everybody else who's already trying to do that...
          and of course, nothing is real unless Apple does it.

          Stop your knee-jerking already (jeez, like a bull to a red cloth.) Apple doing so would be significant because they are a market leader in mobile devices and the biggest music retailer [arstechnica.com] and they make a lot of software used by content producers. It's great others are already doing it, I'm waiting for Apple to do it too because I happen to be an Apple customer already.

          but you do know that publishers don't just "publish", right? editing is a crucial step and good or bad marketing can make or break an author.
          Even authors like Doctorow who freely distributes their contents online have editors and publishers. A good combination of the two means that even trash like D*n Br*wn's D* V*nc* C*d* can become a bestseller.

          Oh I agree good editors are crucial. You don't need publishers to do that however. The whole industry could decentralize from big megalithic com

          • by semiotec (948062)

            Stop your knee-jerking already (jeez, like a bull to a red cloth.) I'm waiting for Apple to do it too because I happen to be an Apple customer already.

            Spoken like a true Apple-fan. Still doesn't invalidate what I've said: nothing matters for you until Apple does it. Doesn't matter for you that Amazon and many others are already selling books directly for authors without publishers online, until Apple starts doing it.

            The whole industry could decentralize from big megalithic companies to smaller companies and transitory partnerships.

            In an ideal world, where people only care about quality of their work and not about making boatloads of money, maybe. In the real world, not a chance. These "small companies" will always aggregate, and multiple "transitory partnerships" with t

            • Spoken like a true Apple-fan. Still doesn't invalidate what I've said: nothing matters for you until Apple does it. Doesn't matter for you that Amazon and many others are already selling books directly for authors without publishers online, until Apple starts doing it.

              Don't presume you know me based on a couple of posts on the internet and some stereotypes.

              • by semiotec (948062)

                Don't presume you know me based on a couple of posts on the internet and some stereotypes.

                I don't claim to know you based on a couple of posts, but it seems consistent with all or most of your previous posts about Apple, they fit the stereotype pretty well. Seems like Apple can do no wrong in your eyes.

  • by bangzilla (534214) on Saturday March 20, 2010 @01:25PM (#31550390) Journal
    First they ignore you: ""
    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.....
    • Re: (Score:3, Interesting)

      by dloose (900754)
      I'm confused... Is Apple the "they" in your post? Who's pricing model is "ill thought out" and what is "ill thought out" about it?

      You may be right. In 5 years, all authors could be publishing independently. But right now there's money to be made by selling books put out by the big publishing houses. Amazon and Apple are competing for that money.

      I think you mean, "Then they lose". "Loose" is the opposite of "tight". "Lose" is the opposite of "win", "find", and "gain". This is important.

      • Re: (Score:3, Insightful)

        by arcite (661011)
        No kidding... Amazon is the one with the most to lose. Apple doesn't really care about being middleman. Apple barely breaks even hosting Apps/music/movies/ebooks; as long as you buy their hardware they could probably care less what you do with it. You can buy and ipad/ipod/iwhatever and never spend a dime on content and still get loads of use out of it through free apps and your own content you upload to it. Why should Apple take the responsibility for pricing third party content, why not let authors/publis
    • by HiThere (15173)

      WRT: "Then they loose", I think you need to read
      http://www.antipope.org/charlie/blog-static/2010/02/common-misconceptions-about-pu.html [antipope.org]
      by Charles Stross.

      (Actually, that's just the first of around 4 blog posts, but you can find them by following the links from that page. The others are called things like CMAP#2.)

    • 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!"

      The only "they" who stands to lose is the author. Self-publishing on Amazon gives authors 35% of net proceeds.

      If Apple adopts the iTunes music and app model for eBooks, authors will keep 70% of net revenue--double what Amazon currently gives them.

      Though 35% is more than the typical author's share from Amazon sales when you have a publisher, a publisher also does a lot more in terms of editing, marketing, handling all the transactional details, paying advances, arranging for distribution, securing cost disc

  • by xzvf (924443) on Saturday March 20, 2010 @01:33PM (#31550436)
    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.
    • by digitig (1056110)
      Ebooks have been around for a while now, and the selection is still poor and overpriced. How long is this going to take?
      • Re: (Score:1, Funny)

        by Anonymous Coward

        it will take more piracy...

    • by mschuyler (197441)

      That is correct to a point, but the manufacturing costs are really not that great a percentage and distribution is an add-on that bookstores have to pay: "Plus shipping." One of the things a publisher will do is seek a price point where printing of the book is reduced. For example, if they figure a given title will sell 10,000 copies, but the break point of the hard copy price falls from $3.50 apiece to $3.25 apiece at 12,000 copies, then they will go ahead and print 12,000 copies, sell the 10,000 (assuming

    • Re: (Score:1, Insightful)

      by Anonymous Coward

      "[. . .] music publishers are making less money."
      Wrong. Music companies are making less money per sale.

    • by Colonel Korn (1258968) on Saturday March 20, 2010 @02:16PM (#31550792)

      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: (Score:3, Insightful)

        by jo_ham (604554)

        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

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        You couldn't be more wrong about Apple/iTunes/DRM if you had tried!
        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 /.'rs with their "i hAtoRzs teh aPPleZEs" attitude that kept the lie alive as long as it did.

      • Re: (Score:2, Insightful)

        by dangitman (862676)

        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.

  • by pydev (1683904) on Saturday March 20, 2010 @01:39PM (#31550498)

    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.

    • 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.

      Generally when a corporations threatens to stop doing business with you altogether, including with regard to different products and different markets, most people consider that to be doing harm to the person or organization they're doing business with. For example, publishers publish whatever book they think will make money. If they can't sell books designed for smaller markets at a higher price, those books may simply no longer be a viable business move for them to publish so they don't get made. And since

    • Amazon is trying a very old business model:

      1) Undercut everyone on price.
      2) Drive all competitors out of business.
      3) Profit! ...not new at all. What is particularly dangerous is that retailers with enough market share can do more than just manipulate price. Witness Walmart's insistence on "explicit" music being edited without any packaging notice. That's the sort of thing that happens when a single retailer wins.

      The battle has sadly mostly been lost for music, to Apple. (Ironically enough.) I would hat

  • In the music business Apple was happy to have companies sell at different prices, they had a lock on the market via the iPod so people would pay $0.99 for 128Kb songs while others (e.g. Yahoo) were charging $0.79 for the same song encoded at 178Kb (in WMA format).

    Books will be different: they won't be able to force consumers to pay their inflated prices because they can't stop people from buying from their competitors. The solution - prevent competition by working with the publishers to force everyone to s

    • by HiThere (15173)

      I *think* you've misread the deal. I understand it thusly: If Apple decides to sell a think at a 15% markup, they can. If someone else decides to sell it at a 10% markup, they can, and they can thereby undercut Apple's pricing. Apple is just saying "You can't charge us any more than you charge our competitors." I don't see anything about sale price in that.

      N.B.: I only read the summary. So I could be misunderstanding this.

      • by jo_ham (604554)

        No, that's pretty accurate. Apple here is not setting the prices, it is just defining the nature of the sales method on their store and the percentage that Apple will take. There's no mandate about what that price should be.

        If someone undercuts them, so be it - if they can make money at that margin, that's the nature of business.

    • by jo_ham (604554)

      Apple doesn't care if you buy from the store really - they don't make much money at all on that front, the bulk of the meat for them is in the hardware. The original 99c one-price model was to prevent the music industry from setting the one hit on an album to $1.50 and setting all the other filler to 79c and then advertising "songs from 79c!". They wanted to prevent all the popular stuff being much more than the bulk of the catalog. The traded that away in exchange for the removal of DRM.

      I don't see how the

  • by ClaraBow (212734) on Saturday March 20, 2010 @02:15PM (#31550786)
    Doesn't this mean that if you have an ipad, which runs iphone apps, that you will be able to buy from apple, or Amazon or B&N? What am I missing here?
  • I support Amazon's position here, and I have titles for sale on their site. Unless Amazon intends to become a wholly-owned subsidiary of Big Publishing, they've got to stand up for this now. If they are the World's Biggest Bookstore, then they have leverage and they should use it.
  • This is just another demonstration of the fact that Apple is smart (but evil) and publishers (in any medium) are stupid. If publishers had a *clue* about how to properly participate in this whole electronic and online thing, we wouldn't be seeing any of these big battles.

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