Slashdot Mirror
Apple E-book Price-Fixing Trial Begins
An anonymous reader writes "Technology giant Apple is to begin its defence against charges by the US government that it tried to fix the prices of e-books. The iPad-maker is accused of working with publishers in 2009 to set prices in an effort to compete in the e-book market dominated by Amazon. Quotes from Steve Jobs' official biography have been cited as evidence in the case."
Yes please.
They'll be fine, with maybe a small fine of much less than the money made from the deals. At least they won't likely get their 'pet' judge this time.
Ah In Jobs we trust :)
Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
If Apple doesn't set the prices, how can they fix the prices?
"He is so stupid. And now back to the wall!" Moe Szyslak
Fascinating comment at the end of one of the stories linked to here. The writer claims that Amazon's model is unsustainable and equivalent to the Standard Oil play of selling at a loss to drive competitors out of business. In his opinion, Apple should be commended for raising prices by a few dollars per book? What say you Slashdot? What I have trouble determining in this shift from physical media to digital is how the artists are making out in this brave new world.
That Amazon's business model is anti-publisher does not excuse an alternative business model that is rabidly anti-consumer. They're both garbage.
No kidding!!! What do you say at this point?
"Technology giant Apple is to begin its defence against charges ..."
Doesn't the prosecution present their case before the defence begins?
You. Unless you get more money from the publishers than you spend on books.
Because the contract is that the publishers cannot sell to a distributor without telling the distributor that they cannot reduce their prices.
So unless Apple are having a sale on some book, nobody else can have a sale on that book.
Which means that you pay more, because there's no point to shopping around looking for a better deal.
"Technology giant Apple is to begin its defence against charges ..."
Doesn't the prosecution present their case before the defence begins?
Normally yes, but the DOJ has already presented its case to the public, and the judge has already decided. Might as well go right for the appeal.
Of course news about a fake are Fake News.
Books I understand, the people who bought iDevices paid a premium fully knowing cheaper "viable" alternatives existed. I don't follow why they should get anything back, those were fully informed decisions.
P.S. I prefer android personally.
First off, Amazon built the e-book market. When e-books started they were just niche amusements people got for their Palm Pilots and Windows PDA's. Publishers didn't care about them at all and made zero effort to establish them.
Amazon laid the groundwork, connected their store to a decent e-book reader and made e-books into the market it is today.
They were also not bankrupting any publishers. They paid the wholesale price for the books that the publishers asked for and then CUT THEIR OWN PROFIT MARGIN by selling lower than what they paid. The publishers already made a profit off the hardcover, the paperback and the e-books.
The problem wasn't that publishers were getting paid, in fact e-book sales were keeping alive books that were decades out of print and creating new profit where none had existed before. It was that they didn't feel they were getting enough. These are the same publishers that have said publicly that Libraries are stealing profits from them, btw. They are the reason an e-book now retails the same price as the hardcover even when the paperback is being sold simultaneously. Publishers are the reason an e-book can retail for $9.99 when the paperback sells for $7, if it's still even in print.
The publishers jumped into Apple's arms when they proposed their deal because it gave them a way to increase their profits and if it wasn't shady they wouldn't have all settled with the government rather than stand with Apple in their defense.
Smaller competitors who want to get into the market. Effectively, price controls like this will freeze out the competition. How? Well, say Apple are making 200% profit on everything they sell because they have price-fixed. You now can sell at 200% profit and compete with them (and thus become part of the cartel yourself), or you can try to undercut them. But they have a huge market, to themselves, with huge profit margins, complete control of the market (because they are all agreeing to price at whatever they want) and lots and lots and lots of spare cash to keep you out / buy you up.
Because of this, you also get a lack of competition (what's the point of competing if you can all agree to just set prices to X and no-one "wins" the market for having a better product?), the market stagnates and the customer gets screwed - not by the raised prices (as you say, that's up to the customer) but because the market is so closed that they either pay lots or DON'T get the products at all. It's also a pretty good way to kill off the technology and (thus) competitors who rely on book sales to sell reading devices, etc.
A company sets its own prices. That much is certain. But they should not be getting into groups and DECIDING how much the customer pays between them collectively, with no reference to how much it costs to supply the product itself, and no consumer interest. It's illegal for a reason. It destroy markets, stifles innovation, removes competition, and makes everything a big game to make money with no regard to consumers at all. And, at the end of the day, it becomes "pay lots, or get nothing", which isn't a technique that benefits taxpayers either. Yes, you get greater tax revenue from profits (you hope!), but you also get less people spending money and less money available to spend on other things for those that do.
The point is that the market is bigger than a company, even a government. Harming the market DIRECTLY harms the stability of the economies of world governments. Thus it is illegal.
There's nothing stopping a company with a patent licensing its patent ONLY for 10 bajillion dollars even though it costs next to nothing to manufacture. That's just business. Nobody's stopping that. But colluding with competitors to price other competitors and your own customers out of the market is in nobody's interest - not even the companies that do it, or their shareholders!
I think the word you're looking for is "condone". Condoming an island country could prove to be extraordinarily difficult.
Apple's point was that they had no deal at all in the shady part, the publishers colluded among themselves.
Glad to see they have enough evidence to go after Apple.
It seems fairly obvious that they are guilty.
Now how about some banks?
Maurice W. Hilarius Voice: (778) 347-9907
Prior to e-books, when a publisher stopped printing a book, their profit from that book was done. If it was a very popular book they might order more printings, but again, when the printing stopped so did that books revenue stream. This was a problem for the publisher, the author and the reader. The publisher and author's side is easy to understand; no new income, but consider also the reader that didn't know about that author at the time, it's been 20 years and they just read an author's newest novel which is part of a series and they feel a desire to read their older books. If they are lucky they might be able to track down a copy from a library or hunt through a few used book stores for one, neither of which gets any profits back to the author. Or conversely they found a dog eared used copy in a flea market and want to read more of that author's works, but the author died and all their books are out of print.
E-books, and Amazon created a new revenue stream for publishers, buying up books at wholesale (for which they paid what the publishers asked! how is that anti-publisher??) and selling those e-books below their own costs to expand a market from a niche curiosity into every day ubiquity. E-books continue to generate revenue long after the printing presses shut down, unlike paper books. So these poor, taken advantage of publishers went from zero profits after print to "some" profits. Oooo, evil Amazon, how could you mistreat them so???
It was the publishers with Apple's help that decided "some" profit wasn't enough, they wanted moar! So now you get numerous cases where the e-book's price is HIGHER than the paperback!! I've seen e-books listed for the hardcover price years after the book was released and used paperback copies were selling for $1 right beside it.
I swear, the only publisher that ever really understood e-books was Baen. Give the old books away for free as advertising for the new books, it's not like they were making money sitting on a hard drive waiting for a new print run!
Condoming an island country could prove to be extraordinarily difficult.
How hard could it be? It's a reasonably small island, and latex grows on trees!
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
It would be easier if it was hard!
I know it's trendy to hate apple, but the fault lies at the feet of the extremely greedy publishers.
An e-book should be MAX 50% the price of the paper book.
Do not look at laser with remaining good eye.
In every voluntary trade each side benefits otherwise there would be no trade.
True.
If Apple wants to set up deals with publishers to set prices nod the customers agree to pay those prices who is actually the victim?
Everybody but Apple.
The reason its not so simple is because its not a single-variable problem. The optimal price for each retailer to sell at is different.
A simple example of this sort of thing are price differences between the prices at convenience stores and grocery stores.
What Apple was doing was conspiring with the publishers so that the minimum price that anyone could sell at was a close approximation of only Apples optimal price. The publishers have already plead guilty. Apple is trying to claim innocence. Fuck Apple.
"His name was James Damore."
What island country are you talking about?
If you mean Vietnam, let me be the first to tell you that Vietnam is not an island. Vietnam lies on mainland asia, just south of China.
Except Steve Jobs approached the publishers and suggested the arrangement to begin with.
In other words Apple tried to do what they did with music , open up a market and allow everyone to make money and be of benefit to the users.
This model kept the ebook prices artificially high and removed competition on price.
How would that be to the benefit of the users?
Apple's point was that they had no deal at all in the shady part, the publishers colluded among themselves.
Ignorance is no excuse for breaking the law!
"For every expert, there is an equal and opposite expert"
Apple approached the publishers not vice-versa, look it up on your ipad fanboi.
They are a greedy self-serving company more than most, there charitable donations until recently were an extremely low percentage for a company of their size.
The Department of Justice is not seeking financial damages from Apple if the government wins the case.
http://www.tuaw.com/2013/06/03/apple-doj-ebook-price-fixing-trial-begins-today/
Not really a shakedown for bribes. Your forgetting government power also include contract law. Apple was seeking to control prices with contracts. If the courts enforced those contracts then they would be shutting down competition.
Enforcement of the contracts Apple wrote would be government action. The government is sueing so it doesn't have to enforce anti consumer contracts. If Apple wants to fix prices they can do so without the force of law behind them.
The *vast* majority of costs associated with creating a physical book are *identical* to the costs associated with creating an e-book. Additionally, you need to deal with doing (and checking) the layout for each of the *multiple* e-book formats you're going to produce, while you only need to do it once for most books (twice if it has both hardback and paperback editions). Printing and shipping costs amount to about 10% of a publisher's costs to produce a physical book and get it out to stores.
Claiming that a 10% reduction in costs should amount to a 50%+ reduction in 'shelf' price is absurd, and simply shows that you don't have the slightest idea what you're talking about.
Wow, I guess it does pay to keep a low profile, especially when, after you died, your biography can be used against the company you built! :) Cautionary Tale for those who like to showoff? :)
I know it's trendy to hate apple, but the fault lies at the feet of the extremely greedy publishers.
An e-book should be MAX 50% the price of the paper book.
A lot of the troubles of the modern-day world can be credited to "should be". A lot of things "should be", but actual fact makes them impossible.
Before saying an e-book "should be" max 50% of a paper book, I'd want to see an honest breakdown of the true costs of producing the book in the abstract - paper, electronic - or whatever, totalling up the costs of creating the book, making it fit for human consumption, typesetting, marketing and so forth, all while paying all those involved a decent living wage and supplying them with the capital equipment they require. Plus enough profit to make them want to go through it all over again for the next book. If that can be done for half than the approximately $7USD/copy that seems to be about average for USA paperbacks, well and good. but leave the "should be"s out of it. A fair price for a fair product is all that I ask. There are books I haven't bought because I considered them overpriced, and no few of them are ebooks at hardback prices, and there are books that I bought because they were so cheap I didn't care if they were immortal literature or not. Very little of my purchase decision was based on what "should be" the cost of producing them.
Books are not commodities. A work by Terry Pratchett probably costs no more to produce than a bodice-ripper from Harvey Snorkwacker. Less, once purchase volumes start kicking in. However, Pratchett's work has more intrinsic value, and that's something worth paying a premium for. At least as long as it's not too high a premium. The old-fashioned "sell it hardback for a year at a high price first" model doesn't work for me. Even when it was the only game in town, I waited for the lower-cost paperback edition.
But this is the publisher (owner of copyright) licensing it's copyright for some price they and Apple agreed to.
I love Jesus, except for his foreign policy.
To be fair and clear, publishers are scum and this seems to be consistent regardless of the material being published -- research/scholarly journals, books, music, movies/TV and video games.
They are in the business of selling someone else's work and occasionally giving some of that money back to the people who created the content. For the publishers, it's "Money forever" but for the creators, it's "work for hire" and so they don't get money forever unless they somehow managed to cheat the publishers out of it. This type of capitalist vampirism should be outlawed as they don't "represent" the content creators as they so often claim. What we need are agency type arrangements where the publishing agencies can only get like 10 to 15%.
Condoming an island country could prove to be extraordinarily difficult.
It might be easier if it were a penisula.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
The publishers were doing fine, and continue to do fine. They still continue to make most of their profits from physical books, btw, which they seem to have no problem selling through Amazon and allowing Amazon to set the price for. In the vast majority of e-book listings, in fact, the PHYSICAL PAPER BOOK COSTS LESS THAN THE E-BOOK, and yet e-book sales account for only 25%-30% of publisher profits.
How exactly, does that work btw? I can buy a CD for $15, but download the album in MP3 format for $9.99. A DVD costs $20, buying the download is $15. Yet only in books is the digital copy routinely priced higher than the physical copy. Yet you want to tell me the publishers are going bankrupt? The same publishers who would gleefully close down all public libraries and have openly accused them of theft? How do you defend these a-holes and feel good about yourself?
Printing Geek here: Paperback book would be roughly $0.01 or LESS per text page (depending on the run length of total copies) and $0.04 per cover. All of this includes binding and shipping. So, let's look at a 300 page paperback: about $3.10 per printed copy. Now, think of a large run book with text page cost at $0.005 or $0.0025 per page: ~$1.54 or ~$0.79 per copy. I think the lower range of prices is even more likely considering the junk paper stock and black ink only for paperbacks.
Keep in mind these cost are assuming domestic US production of books! I don't think I can pick up one of my kids books and not see "PRINTED IN CHINA" on the back.
Nature had a breakout of costs of publishing science papers on line compared to print versions. Its not an exact comparison, but overlaps. This included editor salaries, office overhead, printing, mailing, computer servers, etc. If you paid for the time PhD/professors spent peer-reviewing each others work for free, then the online cost would be more like 2/3rds.
In other words Apple tried to do what they did with music , open up a market and allow everyone to make money and be of benefit to the users.
I'm not sure what you mean by "open up a market." If you mean by making me boycott the big 6 and spending my money on independents, then yes I guess they did. But it seems to me that there was a healthy ebook market before Apple got involved... In fact that was WHY Apple got involved and did what they did.
Who is the victim? The consumers.
Plus enough profit to make them want to go through it all over again for the next book
There's the rub. In other words, the price *should be* what it is now.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
Book vs. ebook pricing isn't comparable to CD vs. MP3 pricing. Format shifting is easy with music: I can burn MP3s or whatever to CDs or rip songs from CDs into MP3 form easily. Since I can use music I buy either physically or digitally as I please, the MP3 is going to be cheaper than the CD.
That doesn't apply for books, which come either as physical books or digital books. Both formats have advantages and disadvantages, so if I buy one I'd like the other too. However, I can't easily print and bind a physical copy of an ebook, and I can't easily OCR a paper book into an ebook, so I generally pick one format or the other. (Or yet another; I have a few audiobooks I have "read" while commuting.)
For most purposes, I want my fiction as ebooks, because they're easier to read that way, so the ebook has more value to me than the paperback.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
If you have evidence of this, the DoJ would love to see it.
Are you really that stupid or do you just like to troll on the Internet?
Apple claims they had no part in the shady deal, so what fucking law did they break?
Hahahahaha, you mean scanning the paper version and stuffing it into a .mobi file after some dodgy OCR?
A lot of the legitimate ebooks I've seen should be returned as unfit for purpose.
And shipping those books are free? sweet!
Do not look at laser with remaining good eye.
Plus enough profit to make them want to go through it all over again for the next book
There's the rub. In other words, the price *should be* what it is now.
I tell my employers what my salary "should be". They laugh.
Problem with e-publishing is that Apple and friends get most of the say-so in the "should be" .
Since you keep going back to work there, it seems your employers have a better handle on the situation.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
It would be easier on an island country than a landlocked one.
Sara
Designer, Gamer, Macgrrl in an XP World
What is the source of your information? Or is this a work of fiction too? {grin}
Hahahahaha, you mean scanning the paper version and stuffing it into a .mobi file after some dodgy OCR?
A lot of the legitimate ebooks I've seen should be returned as unfit for purpose.
Then you shouldn't complain about price, because free would be too expensive.
Of course news about a fake are Fake News.
Plus enough profit to make them want to go through it all over again for the next book
There's the rub. In other words, the price *should be* what it is now.
I tell my employers what my salary "should be". They laugh.
Problem with e-publishing is that Apple and friends get most of the say-so in the "should be" .
You are at least as delusional about Apple's role in ebook pricing as you are about what you should get for your work.
Of course news about a fake are Fake News.
My per page prices figure bulk shipping. With enough lead time, shipping is cheap! With overseas production, shipping is MORE than the printing!!
As a smart consumer I want to pay a reasonable price that is sustainable for the vendor. If they can't make enough of a profit they will go out of business and then there is no product, regardless of how much or how little I'm willing to pay.
Sara
Designer, Gamer, Macgrrl in an XP World
Given most books are likely to be printed on continuous feed machines rather than cut sheet - the cost per page is likely to be even lower, as each impression is likely to be more than one page - which is then folded into folios and guillotined.
Sara
Designer, Gamer, Macgrrl in an XP World
Spot on. My prices were on the generous side!!