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Anti-Trust, Amazon, Apple, and You

July 12th, 2013 - 2:29 pm

Is a loss for Apple also a loss for book buyers? Maybe:

“With Borders dead, Barnes & Noble struggling and independent booksellers greatly diminished, for many consumers there is simply no other way to get many books than through Amazon,” reporter David Streitfeld wrote. “And for some books, Amazon is, in effect, beginning to raise prices.”

Amazon denied the claim, saying the company was in fact lowering prices. And Streitfeld acknowledged the difficulty of getting any comprehensive data to confirm the existence of a trend. Whether Amazon is at this moment pushing prices up or down, however, is not all that important. What matters is that Amazon could start curbing its storied discounts on books, and no one else — not publishers, not authors, not other booksellers — could do much to stop them.

“Amazon is by far the most powerful force for price-setting in the book business,” says Mike Shatzkin, a publishing veteran who now works as a consultant focused on the industry’s digital future. “The publisher’s price doesn’t mean nearly as much as Amazon’s price—particularly in this day and age when people walk into the bookstore with Amazon’s app on their phone.”

Here’s the short history of bigtime ebooks. Amazon used its size and pricing power to strongarm publishers into accepting a $9.99 retail price, even for new releases by big-name authors. That’s good for consumers. But Amazon also used that pricing power to lock consumers into Amazon’s proprietary Kindle format. That’s less good for consumers.

Apple came along with the iPad with its iBookstore and offered publishers a different deal. They said, “We’ll let you set your own prices if you’ll publish on our format, too.” Higher prices is not so good for consumers. And maybe not so good for publishers, either — because I find I’m buying fewer ebooks. $9.99 is an impulse buy for me, but $14.99 isn’t. On the other hand, consumers get more choice on how to read their ebooks, which is nice. Or at least it would be if prices would drop again.

What happens next? Bunches of unintended consequences, probably.

This is yet another example of why I’m wary of anti-trust to solve any kind of market problem. Courts picking winners and losers is no better than Congress or the President picking them.

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All Comments   (3)
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"Apple came along with the iPad with its iBookstore and offered publishers a different deal."

Um, no. Apple came along and set up a price-fixing scheme. Then they got busted for it.

First of all, there's no evidence that Amazon is doing what the linked article claims. Second, How many people complain about DRM-controlled music files these days? Third, Apple had a chance to become a legitimate competitor, but blew it with their shenanigans.

Finally, I'm not too fussed about Kindle books because not only is it possible to download open formats (for some books, anyway) from Amazon, it's not that hard to crack the DRM if you are honestly interested in increasing the portability of your own ebooks.
39 weeks ago
39 weeks ago Link To Comment
I wish more publishers would go Baen's way, offering ebooks in multiple formats.
39 weeks ago
39 weeks ago Link To Comment
As far as I know nothing in the ruling indicates that Apple will be banned from selling ebooks, so that market will still have a Walmart/Target dynamic.

Then there's the ease that epub books can be converted into mobi format, meaning that just because you have a Kindle doesn't mean you're forced to buy from Amazon. Yes, there are convenience and cosmetic factors. But those factors have a price, putting an upper bound on the differential Amazon can charge for books.

If Mrs. Hoyt is even half right about the state of the publishing industry, nobody, including the people in Amazon and Apple, have any idea what things will look like in 10 years.
40 weeks ago
40 weeks ago Link To Comment
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