
Steve Jobs emails that show how to win a negotiation - Pasanpr
http://qz.com/87184/the-steve-jobs-emails-that-show-how-to-win-a-hard-nosed-negotiation/
======
jonknee
> Analysts estimate that Amazon has sold more than one million Kindles in 18+
> months (Amazon has never said). We will sell more of our new devices than
> all of the Kindles ever sold during the first few weeks they are on sale. If
> you stick with just Amazon, Sony, etc., you will likely be sitting on the
> sidelines of the mainstream ebook revolution.

Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to
soar while Apple doesn't even mention iBooks anymore.

And then there was this, something believable only in the middle of a reality
distortion field:

> Apple is proposing to give the cost benefits of a book without raw
> materials, distribution, remaindering, cost of capital, bad debt, etc., to
> the customer, not Apple. This is why a new release would be priced at
> $12.99, say, instead of $16.99 or even higher. Apple doesn’t want to make
> more than the slim profit margin it makes distributing music, movies, etc.

In Steve's world, Apple's raising the price by 30% and then taking 30% is a
benefit to the customer and not Apple. Fascinating!

~~~
doctorpangloss
> Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to
> soar while Apple doesn't even mention iBooks anymore.

That's true, but for a few idiosyncratic reasons, if anything.

The Kindle app is available for the iPad, and for a period of time an iPad
user could buy the book directly in the app.

If Apple wanted to, it could coerce Amazon to pay 30%, regardless of where the
books are sold.

I wouldn't be surprised if Amazon makes most of its money off iPad users. But
there are no hard figures. Though if the opposite were true, I'm sure Amazon
would be trumpeting everywhere how successful the Kindle is.

~~~
notimetorelax
> I suspect Amazon makes most of its money off iPad users

Just wondering, why do you think that?

~~~
FireBeyond
Agreed, I don't believe it to be true at all, either.

Let's face it, the people who are that invested in reading that they'd
consider a Kindle are likely to vastly prefer reading on a device purposefully
built for it.

My Kindle Paperwhite is gorgeous. I also have an iPad 4, and a rMBP. As great
as both those devices screens are, the Paperwhite wins, without a doubt, for
reading. Even the iPad is too big, too heavy, to comfortably hold up or above
my head for any period of time.

People so heavily invested in reading that they purchase many eBooks using
Amazon's infrastructure are likely to have investigated the hardware designed
for same. And whilst my preference for the hardware over an iDevice doesn't
automatically mean everyone will find it the same, I find this claim highly
tenuous.

------
seldo
My two big takeaways from this are:

1\. Amazon sells every Kindle ebook at a loss of $3 -- they pay $13 wholesale
and sell it for $9.99. I thought this was a typo, but then Jobs repeated the
figure (though he said $12.50). It was my impression that Amazon also sells
the Kindle itself at near-cost, so does that mean that Amazon's entire ebook
business has been running at a loss the whole time?

2\. Jobs certainly did win this negotiation, but ultimately they were both
wrong. As Jobs says, "Heck, Amazon is selling these books at $9.99, and who
knows, maybe they are right and we will fail even at $12.99." Amazon's share
of the ebook market in the US is 65%, with Barnes and Noble (who also charge
$9.99 for most books) another 25%. iBooks has the remaining 10%, nothing like
the success of iTunes in the music market.

~~~
ojiikun
All I took away from this was that AAPL wanted to make about $0, AMZN wanted
to make about -$3, and in both cases the author makes about $3, meaning that
of the $13 wholesale, the publisher is getting a 75% cut of the sale.

I cannot fathom that the publisher performs any function possibly worth this
much money. How, since we no longer have to ship dead trees, have we not
evolved a system that gives authors 75% of the sale price?

~~~
Guvante
Apple has always made 30%. They were the ones to start that model.

Publishers are actually about relationships, not dead trees. They can get your
book to the customer, which is where the value is. From the consumer point,
you only care about the producer, but the producer cares about the publisher a
lot more than the customer.

~~~
jbooth
Yeah, but again, that's back when you'd be talking with all these different
retail stores to get your book to the customer. Plus printing, shipping, all
that.

How about 1) Write book. 2) Spend a day or two getting it on Amazon, Apple,
B&N online. 3) Keep 100%.

Might be harder for authors who need marketing but I have no idea why
established authors aren't self-publishing en masse.

~~~
elithrar
> How about 1) Write book. 2) Spend a day or two getting it on Amazon, Apple,
> B&N online. 3) Keep 100%. Might be harder for authors who need marketing but
> I have no idea why established authors aren't self-publishing en masse.

The issue there is that if no one knows about you or your book, 100% of
nothing is still nothing. Publishers also often provide advances, which can be
make a big difference.

Note that I am not defending some of their questionable business practices,
but to pretend they provide zero value is silly.

~~~
sireat
There have been numerous posts by authors (some here on HN) that publishers
offer very little marketing these days.

You have to do the marketing legwork yourself, even if you are with a major
publisher.

The advances might be the one thing they offer, but then Kickstarter might be
an option.

------
danso
A little OT from the actual content, but I have to say, this is an excellent
example of web storytelling format, much more illuminating than the usual
journalistic method of "here's some selective quotes, if you want more, here's
a dump of emails for you to read in Acrobat Reader." And just as importantly,
it's simple to implement: blockquotes, image tags, and subheads

~~~
larrys
Agree. Although I think the titles are prejudicial "Jobs goes in for the kill"
in terms of telling someone the conclusion they should be drawing like the
Elton John song Candle in the Wind "all the press had to say is that Marilyn
was found in the nude". The paragraph commentary of course is a version of
this as well (color) but I don't see it as bad since there are more words
there.

~~~
zseward
(I'm the author.) That's a totally fair point about the subject headings,
Larry. They're intended to make the emails more accessible and scannable, but
of course they oversimplify things. On the other hand, these emails are
ultimately more about being Steve Jobs than winning a negotiation.

And thanks, Dan. Much love to DocumentCloud for making the OCR of those PDFs
super easy.

~~~
larrys
I liked the piece but my take is a bit different since I practically make a
living by doing negotiations primarily by email. (Email is perfect it allows
you to remove facial expressions and tone of voice which can be a drawback if
not perfectly executed. Not to mention having to think on your feet and not be
able to do what I describe below).

One thing that I do do is to very very carefully choose my words and analyze
and interpret the words of others to divine meaning and hidden meaning. [1]

As such I simply don't believe that Jobs just fired these emails off I can
almost assure you that as much effort went into this as goes into writing a
Presidential speech or a chapter in a novel or a scene in a movie.

I do that, it works for me quite well, so I can't believe that at this level
it isn't being done and I am somehow unique.

While it's entirely possible that Jobs wrote this on the fly more than likely
it was a much thought out or even team effort where every thing was discussed
and considered or Jobs perseverated.

I did like the format and you should definitely do more of this.

[1] A small example is this statement "Maybe I’m missing something, but I
don’t see any other alternatives. Do you?"

The addition of the "do you?" and the "Maybe "I'm" is critical in that
sentence. Without both the emotion on the part of the recipient is much
different and would be more negative and consequently less likely to come to
an agreement.

~~~
ScottBurson
Very interesting post.

For most of us, I'm sure writing such an email would take the kind of effort
and consideration you describe. (It would probably take me a week.)

But I wouldn't be surprised if Jobs spent so much of his time negotiating and
was so talented at it that he could pretty much just dash something like that
off -- with every detail right.

~~~
larrys
Side suggestion for you. You are using bountyoss.com for what you do, I
strongly suggest you lock up both bountyboss.com and bountyos.com as well.
(bountybos.com and bontyos.com might also be a good idea but the other two
definitely.)

~~~
ScottBurson
Thanks for the suggestion, but I don't think I understand. You really think
those are likelier typos than, say, "buontyoss.com"? Where does one stop? (I
do have "bounteoss.com".)

In any case, the site has had $0.00 in revenue to date. I don't think
protecting variations on the domain name is my biggest problem :-)

~~~
larrys
bounteoss.com is good.

No hard and fast rule where you stop. In general the traffic counts more than
the revenue (other than you need money to do the variations). The more people
typing in the more people likely to typo. Other thing is not even typos it's
visually what somebody sees and then types. For example for some reason my
brain thinks "boss" so I am likely to type that. That's just me. Personally I
like "bountyboss" as well for some reason. It rolls off your tongue (and
that's important btw.)

I point out simply because you don't want to wait until it's to late (and of
course I have no idea where you are at in this project so the advice could
also apply to someone with more traction! Good luck it looks nice.).

------
regal
Murdoch made a mistake sending Jobs that first clarifying email. HC shows a
lack of any coherent direction having one junior person send a response, and
then a senior person follow up with more exposition. The moment Murdoch does
this, the dynamic is flipped, and HC is chasing after Apple.

Jobs's strategy is to jump all over this and make the argument clear: here's
what we're offering, here's why it's good for you, here's why we can't budge,
and it's out of my hands.

Murdoch comes back and says, well, how about some concessions. Jobs says no,
sorry, no concessions. Do you want this deal or not?

But he already knows how Murdoch's going to answer. Once Murdoch started
chasing, all Jobs had to do was keep backing up until the both of them were
right where Apple wanted them.

Great negotiation case study here from Quartz.

~~~
baby
It's more than strategy, it's also very good phrasing and choice of words :

* (I’d appreciate it if we can keep this between you and me)

* Maybe I’m missing something, but I don’t see any other alternatives. Do you?

------
jtbigwoo
There's a great moment in the first Jobs email:

>>4\. $9 per new release should represent a gross margin neutral business
model for the publishers. We are not asking them to make any less money. As
for the artists, giving them the same amount of royalty as they make today,
leaving the publisher with the same profits, is as easy as sending them all a
letter telling them that you are paying them a higher percentage for ebooks.
They won’t be sad.

This was the moment when he won, IMO. He's very deftly showing that he knows
the publishers are screwing their authors on ebook commissions (which should
be much much higher than for paper books). He's also subtly threatening
Murdoch by reminding him that he doesn't control the means of production
anymore.

~~~
jamesaguilar
I think he won before the negotiation started. HC didn't have anything to gain
by refusing to work with Apple, and potentially had a lot to lose. You cannot
win a negotiation where you have no leverage, unless the other party is
unaware of your position. But I do agree that this is a great moment in this
email exchange.

~~~
6cxs2hd6
Exactly. While Jobs may have been a great negotiator, this set of emails
doesn't really show it. The outcome of this negotiation was clear before it
started. All Jobs had to do was be patient and reasonably polite.

------
adventured
It's impressive how dramatically wrong Steve Jobs was about the iPad when it
came to the ebooks market. He missed by a mile in understanding exactly how
customers wanted to consume ebooks.

So here we are, Apple has sold a bazillion iPads, and yet Amazon dominates
ebooks. And there's absolutely no threat on the horizon coming from Apple in
the ebooks market.

~~~
stock_toaster

      > So here we are, Apple has sold a bazillion iPads, and yet Amazon dominates ebooks. 
    

There is a kindle app for the ipad. Even while the kindle experience on the
ipad is sub par[1], I think the difference in price (cheaper), features
(whispersync, email to kindle), and existing library keep people in the amazon
ecosystem (via kindle app).

    
    
      [1]: you can't purchase books from inside the app because amazon doesn't want to pay apple

~~~
ricardobeat
The lack of in-app sales is overrated IMO. You don't sit down with an iPad and
think "hmm, maybe I should buy a book". There's a great chance you're browsing
the web when you get the idea, so you just hop over to amazon and do a one-
click purchase.

~~~
stock_toaster
Strongly disagree. I have often finished a book and though, "hmm, that was
great. I want to read the next one in the series". But wait! I have to pop
over to the browser, log in[1], search and the book I want, buy it, then go
back to kindle app, sync....

It could be sooo much better. Is there a next book in the series I am reading
that I don't yet own? Show it on the "would you like to rate this book" page
or something. Take my money amazon! Take it faster!

[1]: Which due to my own idiosyncrasies requires me to fire up 1password and
copy my ridiculous password to paste it into amazon login.

------
bravura
Is it just me, or does the following quote suggest that Harper-Collins was
strongly outleveraged in the negotiation, regardless of Jobs's negotiating
skill?

"Apple is the only other company currently capable of making a serious impact,
and we have 4 of the 6 big publishers signed up already. Once we open things
up for the second tier of publishers, we will have plenty of books to offer.
We’d love to have HC among them."

If Harper-Collins was a "second-tier" publisher, and 4 of the 6 biggest
publishers already agreed to these terms, did Harper-Collins really have much
wiggle room?

~~~
ScottBurson
Yes, this was my takeaway too. Negotiating is easy, or certainly a lot easier,
from a position of strength.

The subtlety, though, is that sometimes it's about creating the illusion of
strength, or even of future strength, when the present reality doesn't fully
demonstrate that strength. Jobs did that masterfully here.

~~~
abraininavat
_The subtlety, though, is that sometimes it's about creating the illusion of
strength, or even of future strength, when the present reality doesn't fully
demonstrate that strength. Jobs did that masterfully here._

I'm confused. You agree with the parent that Apple was in a position of
leverage, then you suggest the subtlety is that _sometimes it's about creating
the illusion of strength_.

Either the position of leverage was an illusion or it wasn't. Maybe Jobs was a
master at gaining leverage by creating an illusion of strength, but (if you
agree with the parent) this isn't a good example of it. This was someone who
had leverage acting as if he had leverage.

------
waterside81
This was fascinating. Perhaps what's most interesting is how real Jobs seems.
I mean, these emails read like some of the ones that I've sent in
negotiations. With all the hoopla around him, it's easy to forget sometimes
that Jobs was just a normal guy.

~~~
revelation
If you enjoy that kind of thing, you will love the email conversations in the
federal lawsuit on no poaching agreements:

[http://www.theverge.com/2013/1/23/3906374/email-exhibits-
in-...](http://www.theverge.com/2013/1/23/3906374/email-exhibits-in-silicon-
valley-no-hire-case)

(sorry, couldn't find original documents)

~~~
brown9-2
I like the last one where Jobs threatens to use it's patent portfolio against
Palm if they do not work out a suitable "do not cold call" agreement.

------
conanbatt
Its a valuable conversation, but ultimately Apple held all the cards in that
position.

Its not a negotiation if one of the parts has no intentions of changing his
position. This was a sale.

Although I appreciate the article, this is not a pinnacle for negotiation. I'd
like to see a better case of conflicting demands and creative/collaborative
solutions.

You can see that the decisions were made too quickly and for the impending
announcement.

------
dgreensp
I find it tragic that content distributors like Apple do this kind of strong-
arming, to the point of asking for limits on distribution through other
channels (and in some cases, exclusive contracts).

I understand that I can't force the companies who produce a book, movie, or
album to make it legally playable on my TV, computer, tablet, or streaming
service of choice. No store has all the content, and in some cases DRM schemes
make the content unplayable. There's no guarantee that I can read a particular
book on my iPad legally, or put a Britney Spears song on the device in my
pocket, or play my movies off a network share on my LG TV. Too bad; the
company that paid for the content owns it. However, extortive contracts from
the delivery companies add a deleterious force on top of that, like when
Netflix or Hulu get exclusive streaming rights to a show and shut the other
out.

At some deep level, the players in the content game are fighting instead of
cooperating. In the future, I hope content producers learn to exploit
monetization models where they don't have to be so overbearing about exactly
how content is delivered, and in general they promote rather than inhibit
distribution of their content. The Internet provides unlimited ways to
discover, consume, and purchase content, so rather than a vision of the
future, I expect "digital storefronts" like we have now to look archaic.

That is, if the customers really do have the power to "demand" a good
experience, as Jobs puts it. Otherwise, we're just along for the ride,
occasionally pelted by shrapnel from wars between giant corporations.

------
Xcelerate
To be fair, Apple didn't have much to lose if the deal didn't go through. So I
can see why the "take it or leave it" strategy works in this case.

It would be interesting to see how Jobs negotiated in a case where the other
party had the upper hand.

~~~
fragsworth
Apple did have quite a bit to lose if the deal didn't go through. A huge
reason for customers to buy an iPad is to read books, and if a large portion
of popular books isn't available, customers will not be happy. Try to find a
book that isn't available on Amazon. If you buy a Kindle, you can get all of
them.

------
fragsworth
This wasn't mentioned, but I'm sure HC was given the right to terminate the
contract, considering the other terms in this deal. If they ever found that
they were losing money from the deal with Apple (because they couldn't sell
books elsewhere at prices they wanted) they can pull from Apple. So HC had
absolutely nothing to lose and everything to gain by going forward with the
deal.

This negotiation was too easy for Apple, and HC was just attempting to haggle.
I doubt they expected Apple to cave on much of anything.

------
nickpinkston
Honestly - this doesn't show much of Job's negotiating (which I'm sure he was
great at) because he was in such a position of power.

Being able to say "We already sold 4 of your competitors" and "we have 120M
users that have paid for 2B products" is something any asshole worth their
salt would use as leverage this way.

I'd love to see his negotiations in a more precarious position.

~~~
mrgoldenbrown
I agree. Apple would have had no trouble walking away from HC, so they had all
the power here. Maybe seeing the negotiation with the first publisher would be
better. Or the first negotiations with the music labels when itunes was just
getting started.

------
jwwest
I really liked this part:

>Throw in with Apple and see if we can all make a go of this to create a real
mainstream ebooks market at $12.99 and $14.99.

Basically Jobs is saying "Hey, we can be in this together. Let's just give it
a try." - which is rather humanizing in a way, and masks the negotiation as a
soft sell.

------
damon_c
It is really well presented here as "Jobs moving in for the kill", but in a
way, Apple's terms really didn't seem to be about "killing" but more about
taking in the situation and finding a realistic set of numbers that were
actually tenable in the long run.

Jobs and Apple didn't have Murdoch backed into a corner here. Reality (and
eventually Amazon) did. Jobs was just leading him to realize that.

------
devinmontgomery
This reminds me of when Jobs was proposing the new Apple headquarters to the
Cupertino city council: <http://www.youtube.com/watch?v=gtuz5OmOh_M>, or heck,
this dunk: <http://www.youtube.com/watch?v=INK-Pr6Z82A>. Thrilling to watch,
but ultimately it's easy to win a negotiation when you're in the stronger
position. What I really wish existed is a transcript from Jobs making his
first sale.

------
paul
The is beautiful. Jobs is great at stating his position in a way that is
simple and direct, yet crushing.

~~~
epo
Careful, anti-Jobs sentiment is strong here.

~~~
__chrismc
I find it amusing that someone further up[0] believes the exact opposite -
"Jobs hero-worship" is still strong here...

I'm sure it depends on the threads you read.

[0]<https://news.ycombinator.com/item?id=5754440>

------
leephillips
Jobs had contempt for the whole idea of trying to sell books in any form and
thought, wrongly, that there was no future business there, until Amazon proved
him wrong.

"Today he [Jobs] had a wide range of observations on the industry, including
the Amazon Kindle book reader, which he said would go nowhere largely because
Americans have stopped reading." [0]

'“It doesn’t matter how good or bad the product is, the fact is that people
don’t read anymore,” he [Jobs] said. “Forty percent of the people in the U.S.
read one book or less last year. The whole conception is flawed at the top
because people don’t read anymore.”' [1]

Note the conspicuous lack of interest in using Apple's power to promote books
and reading.

    
    
      [0]http://bits.blogs.nytimes.com/2008/01/15/the-passion-of-steve-jobs/index.html
    
      [1] http://mssv.net/2008/12/28/the-long-decline-of-reading/

------
base698
My big take away from this: Have a multi-billion dollar national company with
120 million locked-in users and you can negotiate however you damn well feel
like it.

------
gfodor
The only lesson about negotiation here is that negotiation is easy when you
have all the leverage.

~~~
maxmcd
Perceived leverage. HC would have been able to operate with greater
flexibility without the deal and Amazon now has dominant market share. Jobs
argues that Apple's digital subscribers are the important part of this deal
when a very legitimate argument could be made (especially in retrospect) that
Amazon's ownership of the book market, and book commerce traffic could help
it's marketshare even more.

The lesson is to convince someone reading the negotiation that you have all
the leverage, and Job's certainly seems to have done that. So much so that you
dismiss any lesson as all.

~~~
gfodor
You didn't explain how HC had the leverage in this negotiation. Apple had
already closed deals with a number of publishers. They were go for launch and
it was inevitable that the overall market was going to ultimately decide if
iBooks was a winner, not if HC's content was on board or not. If iBooks tanked
after launch, it would almost certainly not have been due to HC not being on
board, and if iBooks was successful, or at least was getting traction, HC
would be groveling at Jobs's knees to participate with the stated terms, if
not better ones. Essentially, Jobs saw HC's participation as a net positive
for Apple, but only if they participated without altering any of Apple's
terms. This mindset is exactly why Apple had the leverage: they could
comfortably walk away, while HC saw themselves as potentially missing getting
in on the ground floor of something that could kill their business if they
weren't.

------
skw
Do publishers and authors not looks at statistics? I'm sorry but ebooks aren't
even close to the same value as print books. I have an idea of the production
costs involved. Not to mention that with ebooks you're saving trees and
reaching larger audiences. If the mobile app market shows us anything it's
that micro-transactions are the way to go. Either sell your books for <4.99 or
sell your books by the chapter (eg: 99c per chapter, if your book is actually
engaging).

That or an unlimited book (library) subscription fee. Like job says piracy is
going to occur if you don't make content accessible, and in the country I
reside in (Canada), it's largely inaccessible.

~~~
Erwin
My Kindle books hold higher value for me than physical hardcover books (and
also cheaper comparing to buying an imported paperback let alone hardcover).
There's convenience in getting the book you want at any time and not having to
store them. Distribution is also far more efficient.

Sentimental value of looking at the shelve and resale/lending are the only
advantages physical books have. When I'm near Foyle's in London I buy any
signed edition of authors I like, but other than that it's Kindle + Safari
Online for me.

The author's work is the valuable part. I wouldn't support lowering the prices
anymore for any established authors.

However the eBook market is a great opportunity for new artists -- take the
"Hunger Games".

~~~
makerops
The preview book feature alone makes it 100 times more valuable than a
traditional book imo.

------
joyeuse6701
HC was already at a disadvantage since their rivals were already signed with
Apple. I liked how Jobs positioned himself as if he were Amazon and compared
the short-term long-term advantages for HC. I think that insight was really
the big part of the negotiation.

On the softer side of things, the language choice really shows the positions
of power, the yielding tone of HC, contrasted with the very unyielding Apple
position.

------
mhartl
This really underscores perhaps the most important factor in negotiating,
which is to have a strong negotiating position to begin with. This often takes
work, but it allows you to drive a hard bargain. ( _Note_ : Don't forget to
drive a hard bargain.)

------
maerF0x0
Steve's method is classic Dale Carnegie ("How to win friends and influence
people") . He phrases everything in what benefits HC will get by making
certain choices. He guides HC with win/win thinking, getting HC to choose
their way into what Apple wants.

------
krmmalik
This makes me wonder if Apple just happened to be in a very strong position
from the outset and therefore it was easier for them to stick to their guns,
or if they were just really good at creating that perception?

I was in a position of negotiation yesterday. Nothing anywhere near as grand
as this, and i wonder if creating the perception that my position was stronger
would have helped, or if it had to be ridiculously obvious to the other party.

------
anonymous
This part from Jobs's letter sounded strange to me:

3\. Hold back your books from Amazon. Without a way for customers to buy your
ebooks, they will steal them. This will be the start of piracy and once
started there will be no stopping it.

Publishers must realise that all books are already available in pirated
variants, right? Their worst nightmare - everybody being able to download any
book without paying them, is already a reality.

~~~
fwonkas
I don't think that their worst nightmare is that everyone can download pirated
copies — it's if everyone does.

------
smegel
You win at negotiation by having a strong position. Getting a strong position,
that's the tricky part.

------
whiddershins
How to win a negotiation: have a positional advantage, wait for the other guy
to realize it.

------
not_that_noob
One thing not mentioned here - if the iPad launched without HC titles, and the
iPad became a hit (which was unclear at the time of this negotiation), then
customers would have an incentive to put pirated HC content onto the device. A
few sophisticated customers would have figured it out, and then that knowledge
would have spread. Even if Murdoch later succeeded in getting pricing
flexibility from Apple at a subsequent date, it would be a pyrrhic victory, as
many customers would have been trained on how to do it for free.

So HC had a lot to lose. And Steve knew it - all he had to do was to let
Murdoch know that he Steve knew.

It's good to have a good hand.

~~~
mhaymo
This was mentioned. In Jobs' last email, this was the 3rd option he saw for
HC:

> 3\. Hold back your books from Amazon. Without a way for customers to buy
> your ebooks, they will steal them. This will be the start of piracy and once
> started there will be no stopping it. Trust me, I’ve seen this happen with
> my own eyes.

------
andridk
Observing two people agreeing to fix prices is nothing to be admired. While it
is eye opening to see how Jobs communicates, it is disturbing that we accept
this sort of behavior by companies.

------
ma2rten
Steve Jobs had a clear vision: We are going to launch a device that is going
to revolutionize the way people consume media. I believe, this is how he won
that negotiation.

------
smallegan
I guess it is the capitalist in me that doesn't really get what Apple was
doing wrong by trying to set higher eBook prices with the major publishers.

~~~
felipeko
I don't think there's a problem with Apple selling for eBooks more on their
store. The problem is they forced everybody to sell for more on other stores.

~~~
smallegan
They didn't really force them to, they said if you want to be in our store,
you can't charge less elsewhere. The publishers all could have said no, right?

~~~
revelation
Well, but they didn't. Of course you can only have a cartel if you have all
major players onboard.

------
peeters
> Apple doesn’t want to make more than the slim profit margin it makes
> distributing music, movies, etc.

So given from what I've seen, that Apple takes 30-40% of each song sale, Steve
is trying to say here that 30 cents per song sold barely covers Apple's costs?
I have trouble believing that. I would imagine that many companies would kill
for the profit margin Apple has on iTunes sales.

------
jabbernotty
When I visit the URL, I appear to be reaching a different article, titled
"China manufacturing shrinks in May, leaving policymakers with few good
options"

What gives?

Edit: I end up on

the-steve-jobs-emails-that-show-how-to-win-a-hard-nosed-
negotiation/#87589/china-manufacturing-contracts-in-may-leaving-policymakers-
with-few-good-options/

I'm browsing with IE9, I assume the JS is borked.

------
swah
[OT] I've been reading quite a few posts from qz.com and medium.com these days
- what is going on?

~~~
meepmorp
They write content that people (yourself included, apparently) find
interesting.

~~~
swah
Yes, but I mean... is the quality of good material from this kind of sites
increasing for some reason? That's my impression. Wordpress alternatives? Etc.

~~~
meepmorp
Ah, sorry. I'm suspicious by nature, and I've seen comments similar to yours
in the past implying some kind of shill activity or other stupidity.

No idea why. Maybe these things tend to go in spurts - one good article leads
people to read the site, leading to more exposure and submissions.

------
reillyse
Seems to me that this never really seemed like much of a "hard negotiation",
Murdoch pretty much held his hands up straight away and said he wanted to make
a deal. Not the hard-nosed deal I was expecting.

------
yason
It's easy to win negotiations if either:

\- you have leverage and the other party needs you more than you need him

or:

\- you can make the other party think you have leverage and the other party
needs you more than you need him

------
pizu
Here is a vital lesson about how to make arguments and win in a negotiation,
but nobody here has picked up on it. You are instead focusing on the
numbers...which is a small part of the win...

It's all about psychology and understanding the situation and the
customer..let me explain:

Notice how Murdoch uses "I" and "we" (referring to NewCorp/HC) all the time,
while Jobs almost entirely uses "you" or "we" (as in HC and Apple).

Take a look at Murdoch's language: " I thin[k] I have a handle on this now" -
he's not sure "we we would like to be able to get something done with Apple" -
done what exactly? very vague statement, no specific. blah. "The economics are
simple enough" - are they really simple?

"we are worried about setting prices to high" - again, he doesn't sound
confident or sure of himself

"Feel free to call or write anytime over the weekend to discuss if you like" -
he is making himself available to Jobs over the weekend, giving Jobs the power
to interrupt him "anytime", he takes a subservient/beta position in the
negotiation, and gives the lead to Jobs.

Same sentiment here: "we would much rather be working with apple than not"

And this is quite painful:

"If we could offer to you that a certain percentage of releases (>50%) would
be available within your pricing structure (< or = 14.99), does that GIVE YOU
ENOUGH COMFORT?" - Murdoch is actually trying to "comfort" Jobs, really? it
crossed my mind, that he is almost trying to "please" Jobs here.
Psychologically (probably reading too much into his story), his need to please
a (fatherly) authority figure (Rupert), impersonated by Jobs. Too bad for
Murdoch.

More worries: "I think we are worried more about the absolute holdback of
product elsewhere, and our ceding of pricing to Apple, than we are about the
actual haggle over what the price will be." \- This sentence sounds extremely
vague, nothing is clearly qualified or quantified. Jobs just comes across as
infinitely more knowledgeable on publishing and economics than Murdoch...

"I haven’t shared this with HC directly—so this is only hypothetical." -
HYPOTHETICAL? He sounds like a time-waster, almost asks to be hardly
negotiated with? Also, do we know who makes decisions here? Murdoch or HC?

"Please let me know."- again...PLEASE

"Is it worth considering in the round, over the next few months or weeks,
whether or not some of these loose ends can be tidied up?" - Weeks or Months?
Which one is it, James? More vague language...

Then contrast this with Jobs, "you" focused language and clear and simple
arguments:

"The current business model of companies like Amazon distributing ebooks below
cost or without making a reasonable profit isn’t sustainable for long. " -
Jobs qualifies and frames Amazon's tactic in a sentence. Boom!

"All the major publishers tell us that Amazon’s $9.99 price for new releases
is eroding the value perception of their products in customer’s minds, and
they do not want this practice to continue for new releases." - ALL THE MAJOR
publishers are on our side...i.e. NewsCorp/HC side too...

And some more clear, concise and action-oriented language: "All the major
publishers tell us" "Apple is proposing" "Analysts estimate" "Customers will
demand"

Person A does action B etc etc

Jobs sounds like a man who has done his research, both among other publishers,
his competition (Amazon), and knows what customers want. Murdoch has done NONE
and only "worries" about NewsCorp, coming across as weak and vague. Pathetic.

Jobs' language is "YOU" focused ("focus on your customer and their pains /
benefits mantra" used in copywriting, advertising,etc).

"you will want this too"

"If you stick with just Amazon, Sony, etc., you will likely be sitting on the
sidelines of the mainstream ebook revolution."

"You will make a bit more money in the short term, but in the medium term
Amazon will tell you they will be paying you 70% of $9.99."

"Once we open things up for the second tier of publishers, we will have plenty
of books to offer. We’d love to have HC among them." - here Jobs almost frames
HC as a second tier publisher...urging HC to move to first tier or else they
are going to miss out...

Jobs gives reasons behind his statements, e.g.

"Our proposal does set the upper limit for ebook retail pricing based on the
hardcover price of each book."

Why?

"The reason we are doing this is that, with our experience selling a lot of
content online, we simply don’t think the ebook market can be successful with
pricing higher than $12.99 or $14.99. "

Jobs offers reasons, solutions, analysis. Murdoch brings nothing, but
"worries" and woolly arguments to the table.

And finally, to win Murdcoch over to his side, Jobs does a fair amount of
fear-mongering:

"the current situation is not sustainable and not a strong foundation upon
which to build an ebook business."

"You will make a bit more money in the short term, but in the medium term
Amazon will tell you they will be paying you 70% of $9.99"

"Hold back your books from Amazon. Without a way for customers to buy your
ebooks, they will steal them."

Kudos to Jobs! What a great display of: \- Framing \- Focus on the customer
(YOU language) \- Appeal to other's needs \- Understand and address their
fears \- Provide reasons and analysis in support of your arguments

And many more little gems, that I most likely have missed out!

Jobs had truly been one of the bests (if not THE BEST)
marketer/negotiators/CEO of our era.

~~~
jhuckestein
FWIW, I recall Jobs' biography mentioning that he was not a great negotiator
because he was at times impulsive and abrasive. I think somebody in the book,
maybe Jobs himself, is quoted as saying that Tim Cook was a much more
effective negotiator.

Like others have said, this was not a difficult negotiation for Apple. Maybe
Murdoch could have used the other verticals (video and newspapers) in a better
way or tried to leverage an upcoming big release. I don't think they had
reason to give in either way though.

------
hkmurakami
How to win a negotiation: have all the chips.

------
elorant
This Quartz site has one of the crappiest UI I've ever seen in a web site.

------
ttrreeww
This does seem to be price fixing on Apple's part. Also, this seem to be an
anti-competitive deal.

