
U.S. Warns Apple, Publishers on E-Book Pricing - techiediy
http://online.wsj.com/article/SB10001424052970203961204577267831767489216.html?mod=djemalertTECH
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moultano
Publishers are right to fear Amazon, but a much better solution for mitigating
it seems obvious to me: Sell DRM-free books. Amazon is getting an unassailable
lockin on avid readers because they can never again use a device that amazon
doesn't approve. If the books are DRM-free, then the distributor is the one
who gets commoditized, rather than the publisher.

That said, I'm not entirely confident that DRM is as unnecessary for books as
it is for music. Starting to read a book is much more of an investment, and
also much more likely to be based on a recommendation from a friend who
certainly has the book (and there's a long social history of legal lending.)
So I guess it comes down to which they are more scared of, being
disintermediated by Amazon, or disintermediated by their customers.

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bad_user
I don't represent the normal user, but I want to provide a datapoint.

I pirate music and movies a lot. I also go to the movies and buy the CDs of my
favorite bands, but I only do so for content which is worth it. The biggest
problem with movies is that you can't tell much about their quality from a
trailer. And I also find the music industry to be disgusting lately, so I'm
grateful to a couple of bands that kept their genre and that aren't subject to
the latest trends.

For books I have a different behavior. The thing with my Kindle is that I can
always download a couple of chapters to see if I actually like the author's
style and if it's what I really want. Also I don't read more than 2-3 books
per month, so I don't go on buying sprees, this reading habit of mine being
actually cheap.

Therefore I only pirated one or two books for my Kindle at first, before I
discovered the convenience of buying them straight from Amazon. It takes less
time and reading the reviews of other people makes it valuable to visit the
store first, then from there downloading a sample or buying it is just one
click away.

So I do not believe that DRM-free books will be bad for authors. It's in fact
quite the opposite for me, because when reading a book I end up being really
grateful in case I like it, so I have this extreme urge to reward the author.
And this happens for every book I read, because the selection process is
extremely efficient, as I said, which makes paying for books a no-brainer.

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gwright
I'm having a hard time understanding exactly what actions are under suspicion.
The actual price of the books isn't being established by either the agency or
the wholesale model.

A little googling at the DOJ indicates that the Sherman act prohibits adoption
of "a standard formula for computing prices". In the case of the agency model
it would seem like a standard formula is being established for the
distribution services (but not the actual book prices). Is this the problem?

Any anti-trust lawyers out there?

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jamesaguilar
IANAL, but the problem is when Apple says that publishers must prevent Apple's
rivals from selling the books for less. Without that, the agency model is
fine, but when Apple and the publishers conspire to prevent undercutting,
that's tantamount to conspiring to raise prices.

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Cadsby
Amazon does the same thing.

[http://bits.blogs.nytimes.com/2010/02/26/when-it-comes-to-
co...](http://bits.blogs.nytimes.com/2010/02/26/when-it-comes-to-content-
amazons-kindle-wont-be-undersold/)

~~~
jamesaguilar
Interesting. Maybe the problem is with the fact that the books tend to cost
more on Apple's setup combined with the MFN clause? I don't think that the
government could sue Amazon for conspiring to raise prices since it has a
public and prolific history of trying to reduce them. It's also telling that
Amazon tried to force publishers to do things they _don't_ want to do, which
is not like a conspiracy, whereas Apple is giving them what they want, which
is.

But in the end, IANAL so I can't give you a definitive answer. I'm just
speculating, same as everyone else on this thread. ;)

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chime
I understand that industry collusion in necessity goods (food/gas/medicine) is
bad for the consumer but why can't book publishers and wholesalers act
together to raise the price of books 100x if they so wish? Let the market
decide if that is a good decision or not. In fact, if they raise prices on
certain category of books (e.g. educational books), it will only hurt them
because it will encourage students to buy used older versions from secondary
market, regardless of what version is supposed to be used in class.

Also, why are e-books any different from paper books? Let them price them
however they want. If Hollywood and theaters want to sell movie tickets at
$50/person, why shouldn't they be allowed to?

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azylman
The problem is that that's not actually how it works. For things like
textbooks, people don't really have a choice on whether or not to buy it -
when everyone colludes to price it very high, the people who need them have no
recourse other than to buy them.

You nonchalantly say that students can just buy older versions, but that is
often impossible. Homework problems are regularly taken from the textbook, and
those problems are regularly changed from version to version. Additionally,
when publishing companies are coming out with a new version every couple
years, there's not a lot of availability for used books either.

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chimeracoder
_Nowhere_ is price gouging so clear as in the case of textbooks. You have
almost perfectly inelastic demand, and a single supplier. You don't need to be
an economist to figure out how that one's going to work out.

This semester, my econometrics professor had a professional publisher
'compile' his seminar notes into a 'reader'. This basically meant printing out
the pdfs and putting them in cheap binding, the kind that you might get at
Staples for a negligible sum. He was shocked when they ended up costing almost
$100 per copy for the student, since there was no copyright/licensing in
question - they were _his own class notes_.

If a college student told me that they spent over $1000 per semester in
textbooks, I would have no trouble believing it at all. Used books are not
always available or viable. Workbooks are less common, but now publisher have
'access keys' that they are using to force students to buy the new books. My
professors have always been understanding when I refuse to do the online
exercises that require the access keys (unless they send me unlocked copies),
but I can imagine not all students are so lucky.

I'm also fortunate that my classes (CS, statistics, economics) tend to have
one textbook per course, and they usually aren't so dependent on the in-book
homework problems. For CS in particular, you can often use online
books/tutorials in case of the text, depending on the class.

But for my friends in humanities-based classes, with perhaps ten overpriced
books for a course? I pity the fools - or rather, I pity their empty wallets!

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RexRollman
What's sad is that ebooks should have been revolutionary way to get books into
people's hand for very little money, while allowing publishers and authors to
still make the same amount of money, but publisher greed has fucked that away.

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iwwr
Given the wide availability of pirate books, publishers may be shooting
themselves in the foot by making their titles overly expensive.

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nicholaides
First paragraph: "... according to people familiar with the matter"

Good thing they didn't report what people unfamiliar with the matter said.

~~~
jamesaguilar
It's the standard euphemism for anonymous sources. It seems fine to me. What
is your problem with it?

~~~
jkmcf
[http://www.cliffsnotes.com/study_guide/Euphemisms.topicArtic...](http://www.cliffsnotes.com/study_guide/Euphemisms.topicArticleId-251364,articleId-251360.html)

[http://clear-writing-with-mr-
clarity.blogspot.com/2011/05/ge...](http://clear-writing-with-mr-
clarity.blogspot.com/2011/05/george-carlin-on-euphemisms-1.html)

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aiscott
I have mixed feelings about this. Apple certainly brought competition to the
market. Amazon was reputedly leveraging it's other profits to sell books at a
loss in an attempt to corner the market. Seems pretty anti-competitive to me.

However Apple's "most favored nation" clause is something I find extremely
distasteful. That seems to me to be a hinderance to the whole concept of free
markets.

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panthera
"Apple warns US on poor financial management"

How exactly does the US government have the moral authority to warn anyone of
anything, considering it is bankrupt?

~~~
simonh
It can't be bankrupt - all it has to do is print more money. As Dick Cheney
said, deficits don't matter.

Of course, the resulting inflation might drive YOU into bankruptcy (if you're
a US citizen). But at least Dick Cheney will be ok.

