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

Posted by Soulskill on 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."

5 of 129 comments (clear)

  1. And those expensive E-books... by TWX · · Score: 4, Interesting

    ...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.

    --
    Do not look into laser with remaining eye.
    1. Re:And those expensive E-books... by GIL_Dude · · Score: 4, Insightful

      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

      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.

    2. Re:And those expensive E-books... by kbrannen · · Score: 4, Insightful

      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.

    3. Re:And those expensive E-books... by squiggleslash · · Score: 4, Insightful

      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.

      --
      You are not alone. This is not normal. None of this is normal.
  2. Re:Of course Apple are going to take it to court. by alexander_686 · · Score: 4, Informative

    You are right – but you are also missing the point.

    There are 3 major players: the publishers, the distributors (Apple or Amazon), and the customers.

    Amazon’s Kindle used a distributor’s model. Amazon would buy the book at a fixed price from the publisher but would set the retail price. They could, and did, sell books at a loss, to promote the Kindle.

    Apple uses an agency model. The publishers set price and then negotiates the percentage the retailer (Apple) keeps. It is alleged that Apple and the publishers colluded to break Amazon’s near monopoly.

    The agency model shifts power away from the distributors to the publishers. As you say this model has been around for a long time – so why care?

    What makes it a Federal case is that (allegedly) this raised prices for consumers. Why? Because now all bookstores sell the same book for the same price, so bookstores are no longer competing on price. It shifts power away from customers to the publishers, resulting in higher prices.