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message 1: by Erin (new)

Erin (Tangential1) | 966 comments Mod
We had a thread going elsewhere about the lawsuit that the US Department of Justice is bringing on a slew of publishers for price-fixing with Apple. Here's a new thread to consolidate that discussion.

Lenore posted in chitchat:
I can't remember on which thread we were discussing ebook pricing (one of the downsides of Goodreads being the inability to search by keyword), but for those who are interested, here is a recent update on the subject of the government's antitrust actions in this area:

And Sheri posted another link:
Also following it in the news. It's been in the blogs for some time. Although it sounds like all they are doing is paying a fine, not actually lowering prices.... will have to wait and see what happens.

message 2: by Erin (new)

Erin (Tangential1) | 966 comments Mod
Lenore wrote: "Well, since the early 20th century, Congress has made price-fixing illegal, so if publishers are agreeing on prices for ebooks (or, for that matter, if grocers are agreeing on prices for tomatoes), it is something in which the government should be involved."

I find it kind of hard to distinguish between what is price-fixing and what is an MSRP (manufacturer suggested retail price). It basically feels like the price-fixing is in that they've set this MSRP for ebooks way higher than the actual value of the product. How can a digital copy with no paper cost the same as or more than a paper copy when there is no printing expense? And there is no secondary sale value to ebooks either, since you can't sell them to a used book store. This is where I start raising a skeptical eyebrow at the publishers who've been whining about how having to reduce the price of the book is going to mean major losses for themselves. They way it looks on this side of the fence is that they've got to be taking a profit gain since they cut out that whole printing bit and didn't decrease any one else's percent of the price pie.

And then there's the question of how the publishers are holding most retailers of ebooks to one price and letting Amazon charge something else in some cases? (Supposedly...I've heard this word of mouth, but haven't actually hunted for price disparity myself.) Is this where the discussion about Amazon selling at a loss comes up? They're opting to take a small hit on their percent share per ebook sold, and by doing so they are able to sell more books which results in an overall gain?

message 3: by Steve (last edited Apr 13, 2012 03:31PM) (new)

Steve farmwifetwo wrote: "I too have trouble with this "but it costs as much as a real book". It's just a file, you send it out to the distributors electronically. There is no fuel, no truck, no driver, no store, no employe..."

None of those publishers or Apple ever tried to claim e-books cost as much to produce and ship as printed books. All of them involved in this were worried about Amazon pricing the books below trade/mass market prices in a price war and bankrupting them by undercutting their sales with aggressive pricing on books formatted for Kindles.

I'm not enthused about the minimum pricing myself, but if a book costs too much (print or e-book) I simply won't buy it. The market will set the level sooner or later.

Government price controls generally have a negative effect for the consumers in the long run; as demonstrated by wage and price controls in the 70's. I don't expect this to have a rosy outcome either. This is pure political grandstanding, not rational regulation.

message 4: by Pat (last edited Apr 13, 2012 06:26PM) (new)

Pat (PKlein) | 302 comments farmwifetwo wrote: "I too have trouble with this "but it costs as much as a real book". It's just a file, you send it out to the distributors electronically. There is no fuel, no truck, no driver, no store, no employe..."

I recently bought an ebook by a popular writer, that was so full of errors...averaged out about one a page...that it distracted the flow of my reading to the extent I was reading for errors instead of reading for content...I downgraded my review because the quality was so poor. In fact, I would have preferred to delete it permanently off my Kindle and get a refund. The price was the same had I ordered the paperback version...which I can assume was relatively free of the errors.

I figure that there is some overhead for additional servers, electronic storage, and personnel to maintain the libraries and the equipment and personnel to scan earlier texts...but it certainly doesn't begin to compare with actual printing costs, shipping, warehousing, and retail venues....apparently there is limited budgeting for personnel to edit scanned texts...

message 5: by Lenore (new)

Lenore | 652 comments Commenting on everyone’s posts here:

I went back and found the discussion on ninjapost. For those who want to review, the link is here:

MSRP -- is just that -- recommended. The manufacturer cannot lawfully require that the retailer sell at that price.

Antitrust enforcement is not price control – in fact, it is the antithesis of price control. The antitrust laws prohibit anyone in the sales chain – producers, wholesalers, or retailers – from fixing the price at which something can be sold, whether by agreement (a group of retailers saying they will not discount) or by fiat (a wholesaler or manufacturer dictating the price). In enforcing the antitrust laws, the government does not tell sellers at what price they may sell – each seller decides what it needs to make a profit, and if others are selling the same product for a lower price, the seller has a choice of meeting the competitor’s price or competing in a different manner (more service, enhanced features, whatever). But the seller may not say to his competitor – or his downstream retailer – let’s make a deal that we will not sell this item for less than X. It is the absence of a price-fixing agreement (a private price control, if you will) that is enforced by the antitrust laws.

I understand that the publishers and Apple complain that somehow price-fixing is necessary to compete with Amazon. To which I say, huh? Amazon cannot drive publishers out of business by selling ebooks cheaply, because they are not themselves publishers – they need to get that content from somewhere. They may in fact be driving paper books out of business – but that’s because, for good or ill (and I’m not sure it’s for good), we are moving to a digital world. Print newspapers are also having trouble surviving. (I can’t live without my daily print newspaper, but my four kids, all of whom read the paper daily, read the paper online.) Publishers will have to adjust, at which point they will license their books to Amazon – and Apple – at whatever prices are necessary (I say prices, because some books are worth more than others) for the publisher to make a profit.

message 6: by Pat (new)

Pat (PKlein) | 302 comments farmwifetwo wrote: "Also it's not just the anti-trust there are issues with, it is e-borrowing as well through libraries."

I read both articles on this reference...thank you, thank you...very good resources. I joined Goodreads about two weeks ago and felt like I had arrived in Nirvana having read my books in complete isolation and feeling I would explode if I couldn't find someone to share with who wasn't a ten year old...

As I tried to access (i.e. buy) books that were recommended and looked REALLY interesting I hit the 'exclusivity wall' was the first time I realized that shopping on Amazon for my Kindle did not afford me access to the 'world of literature' could I have been so isolated?

I've even tried downloading the Nook app to my computer in the hopes of buying books from B&N only to find that it is far inferior to the Kindle app for reading...not to mention it simply doesn't want to communicate with the store...At one point I wondered if I would have to purchase a Nook just to gain access!

I've counted over two dozen books so far that I really want to read but are not accessible. Ironically not because they are out of print, but because of these 'book wars'...

Lately I discovered some self-publishing authors with ebooks available through their websites and picked up by Amazon...since I am not an author, I really had spent little time looking into the pros and cons of publishing and distribution...they opened my eyes a little as Amazon tried to gobble them up entirely.

It appears the reader, even more than the author, has become a disposable about a mother devouring her young!

IMO, books belong to US...we are the ultimate investors/consumers/arbiters of taste...maybe the answer will be that the whole process should rest with readers and their authors ...

message 7: by Steve (last edited Apr 16, 2012 09:45AM) (new)

Steve There is no legitimate rationale to consider this trust-busting. I'm not saying I like Apple and those few publishing houses setting minimum fees, I just think it's none of the government's business. If (for example) the latest LRK book is too expensive I can buy a Jim Butcher or Elizabeth Moon. Bestsellers don't constitute a monopoly in any way, shape, or form; there are plenty of books available from other publishers. It's no different from pro football: If you think football games are too pricy because the NFL sets prices then watch basketball, hockey, or watch a DVD. Leisure activities cannot be monopolized.

It should also be noted that only 5 or 6 publishing houses were involved in this with Apple; there are dozens that were not.

message 8: by Steve (new)

Steve I'm happy to see more self-publishing. As I said previously on this topic, those publishers charging more for e-books than printed versions are just shooting themselves in the foot longterm. E-books are clearly the future of publishing; overcharging for them is beyond foolish.

I just don't think this is an issue for the government to get involved in. Let the free market deal with it.

message 9: by Pat (new)

Pat (PKlein) | 302 comments farmwifetwo wrote: "It isn't that the fact it's priced higher at one or the other that's the overall issue. Most people say exactly the same thing "will buy what I can afford and if you don't like it....". As Pat ment..."

I should be reading this month's selection for the group instead I am getting a long overdue education on publishing houses and book marketing practices...and becoming pretty pissed in the process. I don't define the behavior described below as free market activity:

excerpt below:

"As Apple prepared to introduce its first iPad, the late Steve Jobs, then its chief executive, suggested moving to an “agency model,” under which the publishers would set the price of the book and Apple would take a 30% cut. Apple also stipulated that publishers couldn’t let rival retailers sell the same book at a lower price.

“We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway,’” Mr. Jobs was quoted as saying by his biographer, Walter Isaacson.

The publishers were then able to impose the same model across the industry, Mr. Jobs told Mr. Isaacson. “They went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books,’ ” Mr. Jobs said.

The Justice Department believes that Apple and the publishers acted in concert to raise prices across the industry, and is prepared to sue them for violating federal antitrust laws, the people familiar with the matter said."

. . . .

IMO if you eliminate the free market through these practices, you cannot invoke the free market to solve the problem.

message 10: by Sabrina (new)

Sabrina Flynn | 819 comments I read today in a local newspaper that Google is only letting Independent bookstores sell ebooks through them for a limited time until they figured out another option. Had anyone else heard of this?

I agree with some of the comments in the above posts, and I'm glad authors are banning together and going independent. I could totally see them cutting out the middle man and working directly with Independent bookstores.

message 11: by Erin (new)

Erin (Tangential1) | 966 comments Mod
Pat wrote: "IMO if you eliminate the free market through these practices, you cannot invoke the free market to solve the problem. "

Exactly! There would have to be a world-wide boycott of the publisher's currently using the agency model. And even then, I'm not sure they'd actually respond. It would have to be a boycott of those publishers entirely. Which is really very unfair to the authors who are currently contracted to them. And unfair to the readers who'd really like to read the work of those authors.

Frankly, the publishers are asking for piracy with what they're doing, imo. People understand that they speak with their money and when they don't want to support the publisher's behavior with their dollars, but still want to read the book...they're going to find alternative sources of what they're looking for. That's free market, right? But the publishers brought in the government to make piracy illegal rather than letting the market settle itself out (they could have reduced prices, provided better service, etc, etc). So the government has already been invited to the party anyway. Accepting that it's their role to work out this anti-trust problem is just accepting that they are moderating for both sides of the fence now.

You really can't put as many limitations on a product as have been applied to digital media and still be in a free market.

message 12: by Steve (new)

Steve Pat wrote: "IMO if you eliminate the free market through these practices, you cannot invoke the free market to solve the problem."

The free market isn't what any one company, or even a group of them, does. It's what all their competitors and potential competitors can do to provide the goods or services. Nobody is forced to buy books from any of these publishing houses; they can read stuff from other publishing houses, get books used or from the library, or simply do something else with their leisure time.

Major corporations are in fact quite often quite anti-free market because it's far easier to legislate competition out of the market with some well-placed bribes and campaign contributions to government officials and politicians than it is to actually compete.

message 13: by Steve (new)

Steve farmwifetwo wrote: "The Justice Department doesn't care what the price of the book is. The charge is that the end supplier of the good in question cannot charge what they wish for the product.

If it were refrigerator..."

That'd be a valid analogy only if other refrigerator manufacturers and retailers such as Sears and Walmart didn't exist. But they do, just as there are plenty of other book publishers besides those involved in this mess.

message 14: by Steve (new)

Steve By the law, probably. Stupid laws get passed all the time; and governments can be very selective about which ones they enforce. But there is no moral reason the federal government should be involved in this specific case since we're not talking a monopoly here. It just makes books from these 5 publishers overpriced, which is sheer stupidity for all of them long term.

Please understand I'm playing Devil's Advocate here, not insinuating these publishers are doing right. I just think the cure is likely going to be worse than the disease.

message 15: by Erin (new)

Erin (Tangential1) | 966 comments Mod
I can see what Steve is saying. That in Sheri's refrigerator example it'd be like if Kenmore and GE were price-fixing with Sears and Walmart then you could theoretically go buy a Frigidaire from Home Depot.

The problem is that even if Frigidaire isn't price-fixing, it's going to set it's MSRP to exactly what it's competitors have price-fixed to (back in our ebook model, that's the $7.99 for an ebook of a mass market paperback), because it's competitors are all pricing that way, so why not. Maybe it's because their sales shares are less geared toward ebooks, but I haven't seen any publishers pricing too much lower than what those fixed-prices are.

Doesn't change the fact that the existence of price-fixing in the market has set a price for the market that is fully controlled by those doing the price-fixing.

message 16: by Pat (new)

Pat (PKlein) | 302 comments Steve wrote: "Please understand I'm playing Devil's Advocate here, not insinuating these publishers are doing right. I just think the cure is likely going to be worse than the disease.


Me....I'm all for seeing wrongdoers feet held to the fire even if it's only to expose their malfeasance.

message 17: by Lenore (new)

Lenore | 652 comments For yet more on this topic, see .

message 18: by Steve (new)

Steve Lenore wrote: "For yet more on this topic, see ."

This illustrates my point exactly. The chief beneficiary of this legal action is likely to be Amazon, not small publishing houses or the consumer.

message 19: by Steve (new)

Steve Pat wrote: "Steve wrote: "Please understand I'm playing Devil's Advocate here, not insinuating these publishers are doing right. I just think the cure is likely going to be worse than the disease.



Because they're not doing wrong, they're doing stupid. Big difference.

The market will eventually require some sort of pricing adjustment from these 5 publishers. If their e-books cost too much they will see that reflected in their sales. (Frankly I don't know why most publishers don't just sell e-books directly from their own website if they're upset about Amazon's pricing policies. I mostly buy from Amazon simply because they usually cost less anyway.)

The government action is not only completely unnecessary, but will probably make things worse for the consumer in the long term.

message 20: by Steve (new)

Steve Some further insights on this whole issue from a conservative/libertarian blog:

Did you catch the bit about the publisher who "dared" to show Amazon who's boss by removing all of its titles from Amazon's "virtual shelves" and, as a consequence, took a $1.5 million hit in annual sales? The whole article takes that tone. Amazon stands on one side, "unsustainably" selling books at ever-lower prices, and the traditional publishers nobly stand on the other, insisting that publishing is a "craft industry" and therefore requires that prices be higher. The oddest part is that nowhere do the publishers suggest that consumers are want to pay higher prices for this craft. There's an odd assumption that consumers would want to pay higher prices if only Amazon weren't around to force prices down.

There is a telling quote from an author caught in between the publisher, who wanted the books to cost more, and Amazon, who just wanted to cut prices: "I don’t know whether Amazon is being greedy or [the publisher] is being cheap, but I’m caught in the middle. . . . What matters to me is getting my books back on Kindle." Never fear, dear author, Amazon has made self-publishing easier than ever.

And that's the bottom line. Amazon has made the sale of books more convenient than the publishing industry ever imagined. And, for lack of imagination, they have failed to adapt. The publishing industry wants to keep its editors and staff assistants, marketers, and salespeople, just as if the world hasn't changed.

No matter what happens in the courts these publishers are swimming against the tide...

message 21: by Pat (last edited Apr 17, 2012 10:28AM) (new)

Pat (PKlein) | 302 comments Steve wrote: No matter what happens in the courts these publishers are swimming against the tide...

My sister and I had almost the exact discussion over our coffee an hour ago! How could publishing houses act like such dinosaurs (no offense dinos...just an expression, you were wonderfully adaptive).

A review of those publishers' author lists is many 'caught in the middle' with exclusive contracts...self-publishing will not be in their reach for some time.

message 22: by Erin (new)

Erin (Tangential1) | 966 comments Mod
I've heard self-publishing mentioned several times here, but something no one has mentioned yet is the fact that quite a few authors have stated that they have no desire to self publish (LRK among them). And several authors who have done really well self publishing have signed contracts recently with old-skool publishing houses. Personally, I really don't see publishers getting edged out of the market by a horde of authors deciding to take on self-publishing.

For one thing, publishers have all those editing resources sorted out, which I imagine is probably really handy for the authors who end up with contracts. Really, I don't think I've heard of free-lance book editing being a huge niche kind of market, so it's probably not all that easy to find a professional to help you out. Plus you'd have to front that cost yourself if you were self publishing. Take out a business loan to write a book? Verses getting a royalties grant (or whatever they're called) up front to write it.

message 23: by Steve (new)

Steve There are advantages and disadvantages to both; and I expect both will be in use for the foreseeable future,

message 24: by Pat (new)

Pat (PKlein) | 302 comments I've just ordered the sixth installment of "Wool" by Hugh Howey who is self-publishing (with alot of help from his friends and supporters)...he does an excellent job of documenting his novel writing lifestyle choice on his blog...apparently the offers he has received from publishers to take over printing and marketing were rejected...for a number of good reasons.

His work has garnered a large audience and put him in the top 100 scifi and top selling lists on Amazon...

The books are reasonably priced (sometimes free) and wonderful reads...

He enjoys an active give and take with his readership. To the degree that they are designing his book covers...

message 25: by Steve (new)

Steve Pat wrote: "I've just ordered the sixth installment of "Wool" by Hugh Howey who is self-publishing (with alot of help from his friends and supporters)...he does an excellent job of documenting his novel writin..."

Could you recommend one of his free books so I can try him out? I'm always happy to find a new author...

message 26: by Pat (new)

Pat (PKlein) | 302 comments If you are an Amazon Prime member, they are all currently free. I don't see any offerings for free now...but if you want to try the first installment of Wool and you are not a member it is only 99 cents. I recommend it...

I bought it in installments because I was 'trying it out' and didn't want to commit to buying all five parts...ended up with all five because I found it so interesting.

message 27: by Pat (new)

message 28: by Erin (new)

Erin (Tangential1) | 966 comments Mod
Pat wrote: "Is this still happening?"

I'm pretty sure we completed most of the change over already. There was a massive push for all the volunteer GR librarians to help relocate data from other sources back in January. Here's the official blog post from Goodreads about the switch-over:

It basically came down to Amazon being restrictive with the API data that they let other sites use. If if the data for a book came from Amazon, then Amazon wouldn't let GR link to any other bookseller for that book or use the data on their mobile app. I think that second one was probably really the big reason GR opted to find other data sources, since they've been trying to bulk up their mobile app.

message 29: by Vicki (last edited Apr 23, 2012 10:51AM) (new)

Vicki (vickivanv) | 282 comments Mod
Here's an interesting article on how consumers are upset and confused about e-book prices. This site is a bit slanted toward traditional publishing IMO, so take it with a grain of salt. I rather enjoy the comments on these kinds of articles as well.

I've been pretty consistently underwhelmed with what I've seen of publishers in the last few years. And I have zero sympathy for them. They had plenty of notice digital was coming, and chose not to face forward and meet it head on. Amazon, for all its faults, has been scrappy, innovative, and forward-looking. Bezos had vision and built his company, even around the end customer (so, so unlike most traditional publishers). So good on him, and on Amazon's success. It was Amazon's relentlessly pushing forward early and large-scale innovation that finally started to drag traditional publishing, against all odds, into the digital age.

A lot of writers will want to stay with traditional publishers, but I think more and more will choose self-publishing, either on their own or through concierge services or facilitators they hire out on a per-project basis. I like to see an increasing number of ways for writers to get from point A to point B.

message 30: by Erin (new)

Erin (Tangential1) | 966 comments Mod
So this has absolutely nothing to do with the lawsuit, but the lawsuit has brought forward a bunch of concerns about ebooks recently, so I thought these links would be most appropriate on this thread.

Amazingly, the publishing house MacMillan is going to drop DRM from it's Sci-Fi books (Tor books)!

Check it out:

I also liked the related blog post from paidContent from a publishing exec who has joined the masses of ebook consumers who opt to strip DRM from their purchases (even though it is technically illegal):

message 31: by Vicki (new)

Vicki (vickivanv) | 282 comments Mod
About honking time! Baen's been DRM-free for years. But better late than never, I say. Interesting that the SFF genre is stepping out into the vanguard--very appropriate!

Good article on the DRM-stripping exec. Maybe the industry will pull its head out of its wazoo once more execs follow the example and see the advantages for themselves. Maybe they'll learn the lesson more quickly than the music industry did.

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