Author Earnings sheds light on ebook Agency redux

[pwalker8]

Originally Posted by Dazrin

Wasn't a "most favored nation" clause part of the reason Apple wanted agency pricing to start with? So that they always had the lowest price regardless of sales elsewhere. I seem to remember something similar for Amazon but can't point to anything specific.

My understanding is that the publishers wanted agency pricing and had wanted it for a number of years. Apple said sure, as long as we get a most favored nations clause. IMPO, a company would be less than wise to agree to agency pricing without some guarantee that they wouldn't be sold for less elsewhere.

[Sonist]

Originally Posted by darryl

...
It saddens me that large publishers obsession with preserving the declining but profitable print book business by attempting to slow ebook adoption is being pursued at the expense of not only readers but of their authors.

You'd think that their goal is to teach a whole generation the habit of piracy....

Just like the music industry was insisting on $2.99 per compressed, DRM-ed track a while back.

[AnemicOak]

Originally Posted by Sonist

Just like the music industry was insisting on $2.99 per compressed, DRM-ed track a while back.

When was this? I don't ever recall per track pricing being anywhere near that high.

[pwalker8]

Originally Posted by AnemicOak

When was this? I don't ever recall per track pricing being anywhere near that high.

It wasn't. The iTunes store opened at $1 per track.

[Phogg]

Originally Posted by pwalker8

It wasn't. The iTunes store opened at $1 per track.

And that was considered high, compared to existing online download stores.

[darryl]

Originally Posted by pwalker8

My understanding is that the publishers wanted agency pricing and had wanted it for a number of years. Apple said sure, as long as we get a most favored nations clause. IMPO, a company would be less than wise to agree to agency pricing without some guarantee that they wouldn't be sold for less elsewhere.

This is the first time I have come across this characterisation of what occurred. Publishers approaching Apple? I always thought Apple had wanted in to the market but only on condition it would not have to compete with Amazon on price. Would you please provide the source or sources from which you reached this "understanding"?

[SteveEisenberg]

Originally Posted by Sonist

You'd think that their goal is to teach a whole generation the habit of piracy....

Just like the music industry was insisting on $2.99 per compressed, DRM-ed track a while back.

If low prices discouraged people from avoiding payment, dollar-type stores would have little shoplifting. But all the evidence I see -- admittedly impressionistic -- is that low prices are totally compatible with people commonly taking what they didn't pay for. Here's one data point:

http://www.glassdoor.com/Reviews/Emp...RVW2888269.htm

Now, the psychology of piracy is a bit different than the psychology of shoplifting, especially on the uploading side. People who upload pirated eBooks, I strongly suspect, are doing it from a misplaced idea of helpfulness. IMHO they'd still want to help if the books sold for a quarter.

[darryl]

Originally Posted by SteveEisenberg

If low prices discouraged people from avoiding payment, dollar-type stores would have little shoplifting. But all the evidence I see -- admittedly impressionistic -- is that low prices are totally compatible with people commonly taking what they didn't pay for. Here's one data point:

http://www.glassdoor.com/Reviews/Emp...RVW2888269.htm

Now, the psychology of piracy is a bit different than the psychology of shoplifting, especially on the uploading side. People who upload pirated eBooks, I strongly suspect, are doing it from a misplaced idea of helpfulness. IMHO they'd still want to help if the books sold for a quarter.

Steve. Below is a link to my own post on this topic in another thread. I do not believe piracy is price insensitive. A Google search using the words "piracy price sensitivity" yields many results. I quickly noted two scholarly articles which appear to support my belief, though they unfortunately require payment. Could you find so little to support your point of view that you had to resort to a link to an internet forum inviting employees/former employees of a particular dollar store to post on their experiences? Although I almost always disagree with you, I have nevertheless come to expect better of you than this.

https://www.mobileread.com/forums/sho...&postcount=151

[pwalker8]

Originally Posted by darryl

This is the first time I have come across this characterisation of what occurred. Publishers approaching Apple? I always thought Apple had wanted in to the market but only on condition it would not have to compete with Amazon on price. Would you please provide the source or sources from which you reached this "understanding"?

"
...
Publishers told Apple they were unhappy with Amazon's standard price of $9.99. Although they received the full wholesale value of each book sold by Amazon, publishers didn't want $9.99 to catch on as the new default price for e-books, especially since this was so much lower than hardcovers. One strategy they used to keep revenues up was to delay the release of e-book versions of new books, but Apple told publishers it opposed this tactic in its then-forthcoming e-books store. HarperCollins wanted to flat-out charge as much as $18 or $20 for e-books, but Apple Senior VP Eddy Cue also made it clear that this was unrealistic. Apple was more amenable, however, when HarperCollins suggested using an "agency model" instead of the wholesale model used by Amazon.
...
"

http://arstechnica.com/tech-policy/2...-judges-words/

There are numerous other articles as well that mention that the publishers wanted to set their own prices (i.e. the definition of agency pricing) for some time, especially if one goes back to stories that were written before or during the trial. All one has to do is do a bit of research.

[darryl]

Originally Posted by pwalker8

"
...
Publishers told Apple they were unhappy with Amazon's standard price of $9.99. Although they received the full wholesale value of each book sold by Amazon, publishers didn't want $9.99 to catch on as the new default price for e-books, especially since this was so much lower than hardcovers. One strategy they used to keep revenues up was to delay the release of e-book versions of new books, but Apple told publishers it opposed this tactic in its then-forthcoming e-books store. HarperCollins wanted to flat-out charge as much as $18 or $20 for e-books, but Apple Senior VP Eddy Cue also made it clear that this was unrealistic. Apple was more amenable, however, when HarperCollins suggested using an "agency model" instead of the wholesale model used by Amazon.
...
"

http://arstechnica.com/tech-policy/2...-judges-words/

There are numerous other articles as well that mention that the publishers wanted to set their own prices (i.e. the definition of agency pricing) for some time, especially if one goes back to stories that were written before or during the trial. All one has to do is do a bit of research.

Prior to Apple coming on the scene Agency Pricing does not even seem to have raised its ugly head. Publishers were colluding monthly in private rooms of New York Restaurants. They were unhappy with Amazon's pricing, and actually tried eliminating discounts to booksellers including Amazon and Windowing as a means of trying to force Amazon to increase price. It was Apple who approached the Publishers to set-up initial meetings in relation to ITunes. It seems Agency Pricing was first proposed by Apple. Page 37 of the Judgment under the heading "F. Apple Switches Gears and Presents An Agency Model with 30% Commission" makes this abundantly clear based on actual evidence.

To quote your own statement "All one has to do is a bit of research". Please go and do it! I recommend the judgment you apparently so despise as an excellent starting point.

[SteveEisenberg]

Originally Posted by darryl

A Google search using the words "piracy price sensitivity" yields many results. I quickly noted two scholarly articles which appear to support my belief, though they unfortunately require payment.

I didn't spot, with any certainty, the links in question. Since I have library access to most journals, I'd be glad to check them out.

Obviously there is some level of piracy price sensitivity, given certain stipulations. I doubt it amounts to much in real life, since the ratio of free to any given price is still infinite. One non-blocked paper claims that piracy isn't really free, since there is some probability of going to jail. I didn't find that convincing, given the vanishing small rate of downloading piracy prosecutions -- for eBook downloading, I believe the rate is zero. This suggests to me that the price sensitivity of downloading is probably less than for traditional retail theft, where there really is a cost of punishment to balance against the value of the item purloined.

[darryl]

Originally Posted by SteveEisenberg

I didn't spot, with any certainty, the links in question. Since I have library access to most journals, I'd be glad to check them out.

Obviously there is some level of piracy price sensitivity, given certain stipulations. I doubt it amounts to much in real life, since the ratio of free to any given price is still infinite. One non-blocked paper claims that piracy isn't really free, since there is some probability of going to jail. I didn't find that convincing, given the vanishing small rate of downloading piracy prosecutions -- for eBook downloading, I believe the rate is zero. This suggests to me that the price sensitivity of downloading is probably less than for traditional retail theft, where there really is a cost of punishment to balance against the value of the item purloined.

Thanks Steve. There are many results. A few which I noted are:

http://www.tandfonline.com/doi/abs/1...744joce1402_01

http://www.sciencedirect.com/science...67923610002137

http://papers.ssrn.com/sol3/papers.c...ract_id=825165

[pwalker8]

Originally Posted by darryl

Prior to Apple coming on the scene Agency Pricing does not even seem to have raised its ugly head. Publishers were colluding monthly in private rooms of New York Restaurants. They were unhappy with Amazon's pricing, and actually tried eliminating discounts to booksellers including Amazon and Windowing as a means of trying to force Amazon to increase price. It was Apple who approached the Publishers to set-up initial meetings in relation to ITunes. It seems Agency Pricing was first proposed by Apple. Page 37 of the Judgment under the heading "F. Apple Switches Gears and Presents An Agency Model with 30% Commission" makes this abundantly clear based on actual evidence.

To quote your own statement "All one has to do is a bit of research". Please go and do it! I recommend the judgment you apparently so despise as an excellent starting point.

You know that's why I tend to ignore the normal "prove it" posts demanding that I show evidence that disagrees with someone's closely held faith. Usually such posters don't want evidence one way or the other, they are just looking for a starting point to start blasting. You asked for evidence that the publisher rather than Apple suggested agency pricing. I gave it to you.

I'm aware of Judge Cote's judgement and have read it. Just because she claims something doesn't make it fact. That's one of the points of the appeal.

[darryl]

Originally Posted by pwalker8

You know that's why I tend to ignore the normal "prove it" posts demanding that I show evidence that disagrees with someone's closely held faith. Usually such posters don't want evidence one way or the other, they are just looking for a starting point to start blasting. You asked for evidence that the publisher rather than Apple suggested agency pricing. I gave it to you.

I'm aware of Judge Cote's judgement and have read it. Just because she claims something doesn't make it fact. That's one of the points of the appeal.

Seriously? Your "proof" is an Arts Technica post which actually wasn't too bad but was perhaps a little carelessly worded. My response was taken directly from the judgment which was based on the actual evidence heard. I have not so far been able to find a copy of the actual grounds of Appeal but I would be amazed if Apple is even contesting this question of fact.

[eschwartz]

Originally Posted by pwalker8

You know that's why I tend to ignore the normal "prove it" posts demanding that I show evidence that disagrees with someone's closely held faith. Usually such posters don't want evidence one way or the other, they are just looking for a starting point to start blasting. You asked for evidence that the publisher rather than Apple suggested agency pricing. I gave it to you.

I'm aware of Judge Cote's judgement and have read it. Just because she claims something doesn't make it fact. That's one of the points of the appeal.

I'm not too fussed over who first proposed Agency during the publisher-Apple chats. But i notice you seem to be finally accepting that Apple did engage in coordinating talks to have the publishers demand, en masse, an Agency model which included prices arbitrarily fixed at certain Apple-approved price points.

I am proud of you.