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Apple Holds Firm As Publishers Settle With DoJ Over e-Book Pricing 129

Posted by Soulskill
from the 12-angry-government-agencies dept.
Nerval's Lobster writes "The U.S. Department of Justice has just settled with book publisher Macmillan in an ongoing case over the price of e-books, bringing its number of settlements with big-name publishers up to five. Justice claims that those five publishers, along with Apple, agreed to 'raise retail e-book prices and eliminate price competition, substantially increasing prices paid by consumers.' Apple competes fiercely in the digital-media space against Amazon, which often discounts the prices of Kindle e-books as a competitive gambit; although all five publishers earn significant revenues from sales of Kindle e-books, Amazon's massive popularity among book-buyers — coupled with the slow decline of bricks-and-mortar bookstores — gives it significant leverage when it comes to lowering those e-book prices as it sees fit. But Justice and Apple seem determined to keep their court date later this year."
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Apple Holds Firm As Publishers Settle With DoJ Over e-Book Pricing

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  • by TWX (665546) on Friday February 08, 2013 @02:57PM (#42835469)
    ...along with a DRM scheme that causes problems (see the 1984 controversy) are why I keep reading dead-tree editions.

    DVD and Blu-Ray have DRM that's somewhat nonsensical, but the media are cheap. I can excuse some of the stupidity because I'm not paying a lot for it.

    E-books are too expensive for not having a physical copy.
    • by h4rr4r (612664)

      All three are not impossible to crack.

      I just put shelves up for my books, as for the number i have book cases were too expensive. I pretty much either have to switch to ebooks or give up having any wall space not covered by books.

      • ...or give up having any wall space not covered by books.

        And you view this as some sort of problem?

    • by GIL_Dude (850471) on Friday February 08, 2013 @03:16PM (#42835701) Homepage
      Not only are they expensive, they are also not sold. They are licensed. This removes the ability to use the provisions of the first sale doctrine. So you can buy a license to a book - but you can't transfer it. With a physical book I can sell it to a used book store, hand it to my wife or kids and let them read it, send it off to a friend in another state, donate it, etc. With an e-book I can't (legally) do any of that. I can't even let my wife read it on her e-reader (separate account). Since we are very limited in what we can do (again legally) with them, they don't have the same value to me as a consumer. Yet they charge the same (or higher) price. I had put my thoughts on this into a blog entry some months back. They still pertain now. http://gildude.blogspot.com/2012/03/have-you-bought-into-e-book-model.html [blogspot.com]

      One of the things I'd like to see if the ability to transfer from one cloud service to another. Amazon has theirs, Google has theirs, other folks likewise have theirs. But I have no (legal) way to transfer an e-book out of say Amazon's service and into say Google's service if, for instance, I decide I want to use a different e-reader and move "my" licensed content. Can't do it. The only value I get out of e-books that is missing from physical books is the amount of books that can be stored on a small device and the ability to add more to that device from say a hotel room on a trip. However e-books have all the previously mentioned downsides - many of which people are very slowly becoming aware of.
      • I bought a Google e-book recently and used their instructions to convert it and download it to my old Nook reader. I think Google's will work on nearly any device.
      • by Shagg (99693)

        Not only are they expensive, they are also not sold. They are licensed. This removes the ability to use the provisions of the first sale doctrine.

        That's what the Publishers claim... doesn't mean it's true. As far as I know it hasn't been tested in court yet.

      • And that is why licenses like this should not be permitted. It is a blatant attempt to circumvent laws of purchase that exist to protect the consumer rights.
    • by Cinder6 (894572)

      I've noticed more and more Amazon eBooks, especially sci-fi books, being released without DRM. It's still very much in the minority, but at least it's happening.

      • by CCarrot (1562079)

        I've noticed more and more Amazon eBooks, especially sci-fi books, being released without DRM. It's still very much in the minority, but at least it's happening.

        I posted feedback to their help center a while back telling them that they needed to implement a DRM filter on their advanced search page, at least something like "DRM? Y/N". Yeah, right, I won't be holding my breath for it...

        In the meantime, search Amazon for books from Baen or Tor, they're the only two major publishers I am aware of that have implemented a no DRM policy. Or better yet, buy direct from Baen [baenebooks.com]. Tor's supposed to have a store too [tor.com], but something seems to have gone awry there.

        • by rujholla (823296)

          In the meantime, search Amazon for books from Baen or Tor, they're the only two major publishers I am aware of that have implemented a no DRM policy. Or better yet, buy direct from Baen [baenebooks.com]. Tor's supposed to have a store too [tor.com], but something seems to have gone awry there.

          Actually I don't think baenebooks.com sells books directly anymore. Last time I was there they said that they were now using amazon.com as their ebook distributor.

          • by CCarrot (1562079)

            Actually I don't think baenebooks.com sells books directly anymore. Last time I was there they said that they were now using amazon.com as their ebook distributor.

            S'weird, cause I just bought their latest monthly book bundle [baenebooks.com]...the downloads don't seem to come through Amazon...and I can pay with PayPal...

            I did notice, though, that Tor is selling on there as well, so maybe they just decided not to bother setting up their own store.

        • by Githaron (2462596)
          O'Reilly [oreilly.com] sells their books DRM free in multiple formats. You can re download your books whenever you want and they will even sync your books to your Dropbox account if you so desire. Of course, they sell technical books not story books.
    • by kbrannen (581293) on Friday February 08, 2013 @03:30PM (#42835875)
      One can easily argue that the price of the e-books shouldn't be dirt cheap because the content is what you're really paying for. What should be true is e-books are the price of the physical book minus all the expenses that physical books have the e-books don't (e.g. paper, printing, shipping, etc) plus a few cents for the server. I don't know what percent that is of a physical book, but that does seem reasonable. I'm disgusted when I see the e-book costing the same or more than a physical book.
      • by CastrTroy (595695)
        I don't think that eBooks really should cost much less than print book. Most of the money goes to the author and publisher. Very little money goes into paying for shipping/warehousing/printing a physical book. You can go down to your local dollar store and pick up novels/bibles there for $1 a piece. And they are probably only buying them off the supplier for 30-50 cents a piece. I wouldn't be surprised if the overhead costs were pretty much the same for print and e-books. I'm actually pretty satisfied w
        • by Githaron (2462596)

          Most places do not give you the right to sells your ebooks. Many times, you are not even supposed to loan them out. Aside from publishing and distributing cost, this is a reason that a ebooks are much sell valuable than print books and should be sold accordingly.

          .

          • by CastrTroy (595695)
            Sure you can't resell them, but they also never wear out, and they take up a lot less space on your bookshelf, and it can be ordered right from you ebook reader and delivered to you instantly. You don't have to worry about the book store not carrying a new release book because the author isn't popular enough, or worry about them running out of copies. Personally, if I had a choice of an e-book and a paper book for the same price, I would choose the eBook most of the time. It's just more convenient, and w
        • by chrismcb (983081)

          I don't think that eBooks really should cost much less than print book.

          I guess it depends on your definition of "less"
          I can get mass market paperbacks from B&N for 10% off the cover price. So I refuse to pay more than 10% off the cover price for an ebook. Yet ebooks are routinely equal to or more than the mass market paperback. Thanks to Apple
          The big winners (from me at least) in this fiasco were independent authors. As that is pretty much all I read right now.

      • by Pembers (250842)

        I've heard (too lazy to dig out a source) that printing physical books and shipping them to the retailer accounts for about 20% of the retail price. Publishers invest a lot of money in each book that they publish (the author's advance, editing, cover design, marketing and so on). They still have the mindset that shelf space is scarce, meaning that if a book doesn't show a profit within six months or a year of release, it probably never will, because it will have been kicked out of the front of the bookshop

        • by Githaron (2462596)
          In a sense, "shelf space" is still scarce. If a book does not have a lot of exposure to potential buyers, the likelihood of the book being bought decreases. First/Front page space is scarce. While keeping a title on sale indefinitely is now much cheaper, I would venture a guess that most of the sales are still within the first year.
      • by TWX (665546)

        One can easily argue that the price of the e-books shouldn't be dirt cheap because the content is what you're really paying for.

        A hardcover is about $25 for a novel, a paperback is about $8.

        • by kbrannen (581293)

          One can easily argue that the price of the e-books shouldn't be dirt cheap because the content is what you're really paying for.

          A hardcover is about $25 for a novel, a paperback is about $8.

          Paperbacks are much cheaper for a couple of reasons: 1. the materials; 2. they aren't as "new" so it's like they're on sale compared to the hardback. I don't know if it should be that way, but that's the way it seems to go. I will admit that the hardbacks do last longer, so perhaps the better materials should cost more. Personally, I prefer the paperbacks.

    • by Mitreya (579078)

      E-books are too expensive for not having a physical copy.

      It is also not unheard of to have a higher (or very similar) price for an eBook. So sometimes they are literally too expensive.

      Also, does the license automatically offer a non-DRM version if my new eReader is unable to support current format 20 years later?

      • by 0123456 (636235)

        The last book I bought, the DRM-infested e-book was $20 and the paperback was $12.

        Either publishers have no clue, or they're trying to keep selling paper books rather than e-books. The funny part is that by demanding DRM on the e-books Amazon sell, they're helping to tie Amazon customers to their Kindles so they can't buy from other stores.

        • by squiggleslash (241428) on Friday February 08, 2013 @05:26PM (#42837411) Homepage Journal

          People aren't buying eBooks because they're cheap, they're buying them because you can be pretty much anywhere, and suddenly think "Wait? Stephen King has a new book out? It's been WEEKS since the last one!", whip out your Kindle, select the book, buy it, and start reading it within a minute of having that thought.

          And later that day, you can think "Hmmm, what was that fuss about involving King and Kubrick? Oh yeah, I read about that in "The Making of The Shining", let me just take a look at that. And you can witch to that book.

          And then you can think "OMG, I don't remember where it was in this tome, but hold on, I have this nifty search button", and then find the relevent pages.

          eBooks are 100% about convenience, and 0% about price. It's instant gratification. And while you lose one type of flexibility, you gain other types. And the ability to search or have access to your book without notice may well be more useful to you than the ability to have a copy 20 years from now, or the ability to lend the book to a friend.

          It may even be worth paying more for.

          • by 0123456 (636235)

            eBooks are 100% about convenience, and 0% about price. It's instant gratification.

            That is obviously nonsense, or people wouldn't be selling so many $0.99 e-books and this case wouldn't exist because Amazon wouldn't have been cutting prices on e-books to sell more.

            • by squiggleslash (241428) on Friday February 08, 2013 @05:59PM (#42837783) Homepage Journal

              If you've ever been to a bookshop you'll have seen books on sale at ridiculously low prices too. It's not unheard of in any industry to put things on "special offer" in order to "sell more stuff".

              In addition, this case is about Amazon trying to make its ebooks less expensive than Apple's, B&N's, etc. It is not about Amazon trying to undercut paper book prices, and indeed, as the GGP correctly noted, Amazon frequently charges more for eBooks than new paper books (and virtually always more for eBooks than Amazon charges for used paper copies.)

              I'm not sure why you'd think people are buying Kindles to get cheaper books, but it just isn't true, and that's not the attraction.

              • by 0123456 (636235)

                I'm not sure why you'd think people are buying Kindles to get cheaper books, but it just isn't true, and that's not the attraction.

                Uh, let's see. Maybe it could be because I know a ton of Kindle owners and many of them bought those Kindles to get cheaper books?

          • What you're describing is short-attention-span quick gratification. Books for the twitch-twitch market.

          • by chrismcb (983081)

            eBooks are 100% about convenience, and 0% about price

            For you maybe. I like my ebook because it is convenient, and when I bought it, ebooks were cheaper. Then Apple decided to screw the customers over.
            I've already payed several hundred dollars for the convenience when I purchased my reader. I don't also need to pay that for each book
            don't forgot you also loss the convenience of reselling your book

  • I buy ebooks when, usually from Amazon, when they are $10 or less. Mostly I don't buy from Apple 1}because I can only read on my iPad and 2) because it is usually more. Increasingly music is the same way, but because there is no lockin it is not so critical. Amazon gets my money for streaming video.

    Which is to say I think that I don't think that the price is the critical factor here. Over time we are going to see more open sales and less lockin. This will happen as publishers depend less on printing

    • I rent ebooks...

      FTFY.

      • by Mitreya (579078)

        I rent ebooks...

        FTFY.

        And, oddly enough, I still pay a full purchase price for that rental service (sometimes higher than the cost of a paper copy)

        • I rent ebooks...

          FTFY.

          And, oddly enough, I still pay a full purchase price for that rental service (sometimes higher than the cost of a paper copy)

          Precisely why I have a standing ban on ebooks. That is, until I can get my automatic book scanner built [wired.com]

    • I dunno. I've bought books from Apple's store. They come as an unencrypted epub file which I can happily read on pretty much any modern eReader.

  • Publishers should be able to price their product at whatever levels they want. They got into trouble when they got together to agree on set prices.

    Ebooks are an interesting thing. The Apple and Kindle Ebooks seem to be licenses to view the content, unless you illegally break the DRM of the content and load it into callibre or a similar software. You can't buy an ebook and then sell it when you are done. You can't buy a used ebook :)

    Physical textbooks are getting that way too, coming with 1 time licenses

    • by Cinder6 (894572)

      Actually, some Amazon eBooks don't have DRM. I still don't think you're allowed to sell them when you're done, though.

    • They were agreeing on a set agency pricing.

      See normal pricing is wholesale, meaning that I decide what I need to charge for a product, and I sell it to stores for that much (usually with quantity discounts). Then the retailer is free to price it as they wish. They can mark it up a ton and try to make big unit profits, they can sell it at a loss as a loss leader. I am happy either way because I am getting what I want per copy.

      Agency pricing is different. Here the manufacturer tells the retailer what price th

      • by rochrist (844809)
        Agency pricing isn't rare at all. Try buying a Vox AC-15C1 amp for less than $599.
        • I'm not saying you never see it, the audio world likes it to an extent, Denon does it, but it is not very common. Most manufacturers decide what they want to make per unit and price accordingly. What the retailer does is of no concern to them.

          Agency pricing is legal, but not to collude on it.

      • by gnasher719 (869701) on Friday February 08, 2013 @06:23PM (#42838069)

        Agency pricing is pretty scummy period in my opinion, and is fairly rare. Here not only was it being done, but as a collusion.

        Apple has so far sold 25 billion songs, all with agency pricing. Record companies set the price, and Apple sells it. The same things with books. Apple sells tens of thousands of different ebooks. They don't want to worry about what price to set for each book. So they let the publisher set the price; the publisher has more experience anyway.

        Now apparently Apple told the publisher: If you sell the same book to other distributors for less, then we are not interested. Can't see anything wrong with that.

    • by Shagg (99693)

      Publishers should be able to price their product at whatever levels they want.

      Distributors should be able to price their product at whatever levels they want.

      It's one thing for a publisher to set the price when they sell to a distributor. It's quite another thing for publishers to dictate the price when a distributor sells to a consumer.

    • by chrismcb (983081)

      Publishers should be able to price their product at whatever levels they want.

      You are right. But publishers shouldn't be able to specify the price the middle sales to the public.

  • by DogDude (805747)
    What a fucking mess. I'm glad I still read actual books.
    • by hedwards (940851)

      Which works great if you don't spend a lot of time traveling. Or have a huge house.

      Personally, I use the library and only buy books that I'm going to want for years to come.

    • Maybe you should read something to help cure that smugness.
  • by Anonymous Coward

    There's a much better way to avoid being gouged for books. Pirate.
    Ebooks are tiny and there is apparently a quite active ebook piracy scene. You can find torrents that are VAST archives of thousands of books (of just one genre!) and they're smaller than your average HD movie rip.

    The ebook prices publishers put forward are an absurd, laughable fantasy designed to protect their old business models as long as possible. (And to foster the idea that their high prices are somehow normal)

    I can get 10-12 dollars fo

    • On the other hand, given the egregious awards for downloading just a few movies or songs - imagine the financial penalty for a collection of a thousand books.

      Everyone is just lucky the book industry is not going after pirates the same way the music industry has.

      • by vivek7006 (585218)

        On the other hand, given the egregious awards for downloading just a few movies or songs - imagine the financial penalty for a collection of a thousand books.

        Everyone is just lucky the book industry is not going after pirates the same way the music industry has.

        Yeah, that worked out so well for the music industry

        • It doesn't matter how little it has helped the music industry. What matters is that the music industry has destroyed quite a few lives. And the publishing industry COULD do the same if it chose, I would be wary of putting myself into the middle of a very likely action.

    • Well, that's a solution... if you have no scruples whatsoever.

      • Scruples? No, if you're opposed to ebooks it's a good way of fighting back.

        Destroy the market for ebooks and publishers will give it up.

        A DVD-R holds a hell of a lot of books that you can hand around to friends and strangers.

  • Really this case has a lot more depth to it than just the old Apple/Aamazon angle. Everyone shoudl read more details as to what this is all about. [time.com]

    It was about the publishers (and Apple) trying to keep the market more open to competition - an excerpt:

    "While the deal caused prices to go up for some new releases and bestsellers, according to Schumer, the average ebook price actually went down from $9 to $7....It was actually Amazon - not Apple or the publishers - that held too much market power and was using

    • by Chris453 (1092253)

      It was about the publishers (and Apple) trying to keep the market more open to competition

      Do you really believe that? If so, I have some ocean side property to sell you in Arizona...

      Apple and the publishers did this to make money (as much of it as possible) and didn't think anyone would notice their backroom dealing.

      • by Anonymous Coward

        Yep. They're out to make as much money as possible by *DROPPING* the average price by $2.

        Reading comprehension for the win!

        • by Chris453 (1092253)

          Yep. They're out to make as much money as possible by *DROPPING* the average price by $2.

          Reading comprehension for the win!

          Maybe you should take a look at who made that $2 claim that you are spouting off as fact. Who made it again? Senator Charles Schumer made that claim in an op-ed to the Wall Street Journal. The SAME Charles Schumer that has taken at LEAST $100k in legal bribes (campaign contributions) from the book industry according to latest figured released [opencongress.org].

          Maybe you have a reliable source for that $2 claim that isn't getting kickbacks from the same industry?

        • Reading comprehension for the win!

          Ummm you might want to take a reading compression course – or maybe some high school math. You have been misled or tricked. The article never mentions revenues or profits.

          Bestsellers increase in price while other books now sell for less. If Amazon sold the same number of “Bestsellers” as all other books then yes, revenue would decline. However, if “Bestsellers” are their best sellers – which is a reasonable assumption – you can no longer say that. Now, pulling Amazo

      • Why not? They
                Wanted to keep the market open
                They wanted to shift power away from distributions (dominated by Amazon)
                They wanted to gain control of retail price of their books. (End discounting of their books, have 1 day specials to promote their books, etc)

        Multiple motivations can drive the same actions.

      • Apple and the publishers did this to make money

        Of course they did.

        Because Amazon destroying all other publishers means they make very little money. But do you think that's better, or worse for readers?

        Amazon charging less so they can lock the whole market into the Kindle platform for eBooks is not exactly an altruistic move either you know.

        • Apple and the publishers did this to make money

          Of course they did.

          Because Amazon destroying all other publishers means they make very little money. But do you think that's better, or worse for readers?

          Amazon charging less so they can lock the whole market into the Kindle platform for eBooks is not exactly an altruistic move either you know.

          You mean instead of *middle men* bleeding artists dry, and electronic store fronts taking massive mark-ups on Authors Books. That sounds wonderful.

          As for the whole kindle thing. I'm pro a move to open devices and formats, and look forward to Apple relinquishing its patents on its closed formats [and it embracing open ones flac and webm being good starts] , and opening its devices to Alternative store-fronts *including* kindles who currently use a web-app :)

          I Agree with you I think boycott Apple until they o

          • You mean instead of *middle men* bleeding artists dry, and electronic store fronts taking massive mark-ups on Authors Books.

            Apple also encourages individual authors. They even write book writing software and give it away for free. Then they let you charge whatever you want for your book.

            You can also try to sell through Amazon but it's up to Amazon whatever price below your base price they want to charge.

    • It was about the publishers (and Apple) trying to keep the market more open to competition - an excerpt:

      Bless you sweetness, you do know that this is nothing to do with *competition*...its the opposite of competition its a cartel. As for Apple...because you don't really care about the publishers is in it for "most favored nation", that means *nobody* can compete on price with Apple.

      In fact this is anticompetitive....its why the DoJ is breathing down Apples Neck

    • by SEE (7681)

      Blatant collusion in price-fixing is illegal, and screaming "But Amazon!" doesn't change that.

      And, oh, my, Senator Schumer of New York says things that support New York-based publishers in a dispute with Washington-based Amazon? Next up, we'll ask congressmen from West Virginia what they think about nuclear power as an alternative to coal; it'll be just as reliable.

  • Not all ebooks are overpriced or have DRM.
  • The library has always been my first choice for books, but something like Spotify for books would move the library to 2nd...

    • My libary lends e-books.

      Also, doesn’t Amazon Prime kind of do this – letting you lend 1 book a month?

  • Both are total rip-offs.

  • Unfortunately prices remain high and I remain to read in a old way. Libraries can count on me!

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