This. Wouldn't this be price fixing, and all sorts of illegal?
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This has been an issue with me for a while now. The only ebooks I'm willing to pay more than $10 for are ones that don't have a physical format, or that are, even if more than $10, substantially cheaper than the physical copy (like a textbook or OOP/rare title).
99% of the kindle/nook/ibook titles I 'own' are actually below that $10 tag, like WotC paperback titles that are actually cheaper than the physical format.
The Game of Thrones paperback collection (first four novels) is another good example: $18.99 for the physical books as a boxed set; 29.99 for the Kindle edition!
Well the problem for me is the fact that businesses that are supposed to be competitors have gotten together and fixed the prices at a certain point and all agreed to not go below that point. In addition to refusing to sell to retailers that do not honor the fixed price.
Honestly it is something that should have every Libertarian on the block screaming their collective head off (and honestly everyone else but we'll start with the defenders of the free market system as a panacea to all our woes).
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Well the problem for me is the fact that businesses that are supposed to be competitors have gotten together and fixed the prices at a certain point and all agreed to not go below that point. In addition to refusing to sell to retailers that do not honor the fixed price.
Honestly it is something that should have every Libertarian on the block screaming their collective head off (and honestly everyone else but we'll start with the defenders of the free market system as a panacea to all our woes).
um why would libertarians be screaming their heads off? This would be an example of entities entering into an agreement of their own free will. As a consumer a libertarian isn't more required to buy the E-book version and is allowed to publish their own "e-books" at cheaper prices so flagging sales will force the fixers to lower their prices. I think that maybe I don't understand what you think libertarians are?
EDIT: don't get me wrong I do believe this is price fixing, and don't think it's a good thing, I'm just not understanding what your saying which to me seems to be that libertarians should do the exact opposite of what libertarians should do. If anything I would expect libertarians to support the sellers and protest the governments involvement.
I think all price fixing like this is bad. This could still exist even if there were no regulations so much for the free market if the producers can just collude. They don't want to compete by setting prices as they make less profit that way.
Libertarians should be upset because it ruins the basis of their free market principals. It precludes competition that is required to settle on the lowest price because it artificially removes the lowest price.
Basically put it isn't competition. It removes the voluntary nature of the transaction because each product becomes the same at price regardless of value or substance and those that refuse to agree to the terms are specifically excluded from the arraignment -- making it much more difficult for new players to enter the market.
According to the current Libertarian dogma this shouldn't happen in a free market -- precisely because these six producers should be competing instead of colluding. However they forget the profit motive which only requires profit not the lowest price.
Now consumers could demand lower prices... but what happens if the price doesn't budge?
1. People pay the new prices.
2. People don't pay the new prices.
At which point the publishers kill the new technology that was supposed to force them to be more efficient, thereby protecting their positions (which is what they really want).
It's a competition killer set out on purpose to avoid anything nearing a 'free market'.
I'm aware GeraintElberion -- it's the inherent contradiction of the Libertarian position that I'm calling out and the biggest flaw with supply side economics -- the idea that somehow this won't happen.
It's funny because it's wrong to them when the government prevents it, and it's wrong if the government forces it -- but if the market does it by itself then its supposedly okay.
Which is absolute rubbish.
Anyway, ebooks are getting too damned expensive! Except for mine, which are perfectly priced based on their awesomeness.
I'm aware GeraintElberion -- it's the inherent contradiction of the Libertarian position that I'm calling out and the biggest flaw with supply side economics -- the idea that somehow this won't happen.
It's funny because it's wrong to them when the government prevents it, and it's wrong if the government forces it -- but if the market does it by itself then its supposedly okay.
Which is absolute rubbish.
"If it did happen it can happen."
What's really funny is this sort of collusion is fine for a corporation to take part in -- but heaven forbid that the workers do it and set their own prices for their product (labor).
Actually, I'm pretty sure this is legal under copyright law. Doesn't holding copyright give you right to a monopoly?
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The truth is, I think most of us are too close to the meeting point of the past and the future.
I grew up with books. My office is lined with bookcases overflowing with books; hell, at this very minute I need to get another bookcase--I actually have books stacked on the floor. If there's a fire, they're gone.
Not so with my ebook library. At least currently, all three major retailers allow an apparently infinite download of purchased titles. There's a value there.
I can imagine that if Amazon had sold me a digital version of an $8 paperback for $5, and only one chance to download it, or a digital version for $10--$2 more than the physical paperback-- but with infinite downloads, I might spend the extra for the insurance of never losing the book.
Actually, I'm pretty sure this is legal under copyright law. Doesn't holding copyright give you right to a monopoly?
In short no.
Who the what now...?
"If it did happen it can happen."I'm aware GeraintElberion -- it's the inherent contradiction of the Libertarian position that I'm calling out and the biggest flaw with supply side economics -- the idea that somehow this won't happen.
It's funny because it's wrong to them when the government prevents it, and it's wrong if the government forces it -- but if the market does it by itself then its supposedly okay.
Which is absolute rubbish.
The market doesn't do it by itself. The apparent failure of the market here is really caused by government regulation.
That's the libertarian party line. It's always the libertarian party line when faced with any kind of market failures.
In this case it's even true. Without government regulation, in this case enforcement of copyright, this collusion and price-fixing wouldn't be possible. Of course, without that government enforcement, the entire market wouldn't exist.
I really would like a libertarian to come out in support of bums dumpster diving as that should be allowed and would be a pareto efficient allocation of resources under the free market.
So, LazarX, you're saying saying Comrade Obama is sort sort of evil commie? /messagereceived
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Guess what Libertarians. THIS IS EXACTLY WHAT YOU ASKED FOR. Buisnesses making decisions unfettered by government regulation. Libertarians like their Tea Party cousins have been preaching that the only true evil is government regulation. There is no regulation about the price of ebooks. And we're not likely to see action from Congress in this matter for a variety of reasons, including desires to see resentment build towards Obama's administration.Libertarians should be upset because it ruins the basis of their free market principals. It precludes competition that is required to settle on the lowest price because it artificially removes the lowest price.
Maybe as one of those crazy libertarians, I should just say that I'm free to not purchase e-books. or you know to purchase e-books from people not artificially increasing the price of their e-books, say fine folks like these, remarkably not raising their pdf prices. That's not to say price fixing isn't dangerous (when applied to products that are needed for basic survival) or that while I'm a libertarian, that I'm a %100 free market guy as I do believe that anti-monopoly laws are a good thing. But this is an area where I do believe the market would work because this product isn't a necessity, there are plenty of alternatives and even these companies colluding on their books doesn't prevent you finding other cheaper e-books from other publishers, in fact this will help those publishers.
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Guess what Libertarians. THIS IS EXACTLY WHAT YOU ASKED FOR. Buisnesses making decisions unfettered by government regulation. Libertarians like their Tea Party cousins have been preaching that the only true evil is government regulation. There is no regulation about the price of ebooks. And we're not likely to see action from Congress in this matter for a variety of reasons, including desires to see resentment build towards Obama's administration.Libertarians should be upset because it ruins the basis of their free market principals. It precludes competition that is required to settle on the lowest price because it artificially removes the lowest price.
Obama needs no help in earning resentment. He can earn that all by himself (with his teleprompter close at hand, of course).
That being said, price fixing has been around for a long, long time, even in the electronic media world. Anyone remember that MASSIVE class-action suit against CD manufacturers over the cost of CDs all being amazingly similar(ly high)? It got settled
And the result: a 28-year-old Def Leppard (as an example, Pyromania) CD is still $14 or so, even at 'cheaper' stores like Wal-mart.
Problem solved, huh?
The most simple rule to determining market value is this: What is something worth? Whatever someone will PAY for it.
If people had a viable alternative to paying $3+ per gallon for gas right now, they'd do it in a heartbeat. But since all the patents for high-mpg engines are bought for millions by car makers and buried, or by oil companies and buried, or if not sold to one of them, the patent somehow disappears, then we still have no such true alternative. So we pay $3+ a gallon right now. Don't get me started on the Department of Energy being essentially useless, or politicians giving the caribou their own really BIG state. That's for another time.
In the final analysis, the people - that's you guys, plus me -- have a responsibility to themselves, if not posterity, the common good or some other lofty, half-bs ideal, to save money by not overpaying (at least, in their mind) for something.
Ferengi Rule of Acquisition #3: Never pay more for an acquisition than you have to.
#141 - Only fools pay retail.
And, in my case, since I acquire (had to say that) so many books for [ahem] nothing, #109 - Dignity and an empty sack is worth the sack.
Get yourself an education and stop wasting everyone's time.
He don't need no book learnin'!
Chief Technical Officer
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That msnbc article represents some crappy journalism—there's truth in there, but it's mixed with enough misunderstanding that it paints an inaccurate picture.
Some examples:
The wholesale price charged by the big publishers for both e-books and hardcover books was $12.50
Sorry, what? The wholesale price for *all* hardcovers and e-books was $12.50? That's just plain not factual. (Should the word "average" have been in there somewhere? I'm not sure.)
The wholesale price charged by the big publishers for both e-books and hardcover books was $12.50, meaning that before the agreement, Amazon.com was losing money by selling e-books at $9.99, books, according to the Journal, but the low price encouraged consumers to get in the e-reader game.
Prior to the agreements that allow the big publishers to set their own prices, Amazon's deal was that—regardless of their sale price—they paid publishers 35% of *list* price for each ebook sold. If the "wholesale" price—the price the publisher was paid—for a book was $12.50, that means the *list* price had to have been about $36. I'm pretty sure that even the *average* list price for an e-book has never been as high as $36, so I'm pretty sure the term "wholesale" is misused there.
I think the author is actually comparing the wholesale price of a hardcover (which is about 60% of the list price) with the *list* price of the e-book edition. That jives better with the bit that's quoted from the Time article:
Under the new pricing model, a $25 hardcover is often priced at $12.99 for the e-book. And because publishers receive 70% of the e-book retail price -- while retailers retain 30% -- that means publishers receive only $9.09.
Right. So, to be clear, here, under Amazon's old 65%-for-Amazon/35%-for-the-publisher agreement, if a print book were $25, and the publisher's list price for the e-book was $12.99, the publisher would get $15 for each print copy sold, and $4.55 for each e-book. If Amazon sold that ebook for $9.99, they weren't losing money, they were making $5.44—that's 89 cents more than the publisher!
Now let's talk about that Steve Jobs thing.
The whole agreement was actually launched at the behest of Apple’s Steve Jobs, who had wanted to create an e-bookstore for the iPad but didn’t want to compete with Amazon.com’s cheap titles, according to the story.
That's not the way I see it. At this point—we're talking about the launch of the iBookstore—Apple had already become a behemoth with iTunes, and they know full well that selling the digital bits is the easy part—it's creating the content that's difficult. The iTunes Music store generally pays publishers 65% to 70%, and when Jobs adopted that royalty for the iBookstore, it made Amazon's existing 35% royalty seem like a slap in the face to publishers—which, speaking as somebody who acts as both a publisher and a digital reseller, it is! The implication that Apple couldn't compete with Amazon on price is faulty—Jobs using a rate that favored the publisher so strongly shows that he had plenty of room to move while still making acceptable profits for Apple.
The iBookstore deal is, to my knowledge, the second most publisher-friendly royalty in the industry (right behind Paizo—we pay 75% to our PDF publishers). And having that viable option finally gave the publishers the ability to demand better terms from Amazon.
And so we got Amazon's new 30/70% agreement. If a print book were $25, and the publisher's list price for the e-book was $12.99, the publisher would get $15 for each print copy sold, and $9.09 for each e-book. Now, since Amazon can't charge less than list (for those big publishers, anyway), that means they make $3.90 on that ebook. (Actually, Amazon also charges a "delivery fee" to the publisher, essentially a hyperinflated bandwidth charge, so Amazon makes a little more than that, and the publisher a little less.)
The reality is that this isn't about publishers jacking up list prices, because—despite the attempts of the article to imply it without actually saying so—the list prices aren't really changing. It's about the fact that while Amazon had their 65%/35% deal in place, they had the margin to lower prices on ebooks by 50% or more, helping to make Kindles seem like a more attractive option, at the cost of diminished print edition sales to price-sensitive customers. And that, to me, is a conflict of interest—they were essentially choosing to allow publishers to lose print sales in order to bump up their own Kindle sales.
Steve's iBookstore deal let publishers put a stop to that. (Well, it did for the big publishers, anyway—Amazon still plays the bully among us small publishers, and won't allow us to set our own prices. And we can only get the 30/70% agreement for certain sales; the 65%/35% deal is still in place for many sales.)
Not even good ones!
As a pretty hardcore Ferengi and DS9 fan I have to object to this.
I concur with the rest of your message though.