Tuesday, May 22, 2012

iBookstore: Return of the complaint against Apple and publishers

Steve Jobs comes into the picture

Through the exchanges between publishers, it appears that one of them is not ready to change his tune. January 24, three days before the launch of the iPad, Steve Jobs enters the discussion and send an email to one of the protagonists by describing the situation as follows: "As I see it, you following choice:
1: you support Apple and we see if we can all go towards creating a true mass market e-book for $ 12.99 and $ 14.99.

2: you keep $ 9.99 on Amazon. You will gain a little more money in the short term but medium term, Amazon will tell you they will pay you 70% of $ 9.99 (understood, even less than the sales price - at a loss - practiced by the firm of Jeff Bezos, ed). They too have shareholders.

3: you remove your books from Amazon. No way for consumers to buy your e-books, they will begin to steal. This will be the beginning of piracy and once it's gone, nothing can stop it. Trust me, I saw with my own eyes.

I may have forgotten something, but I see no other alternative, and you? "

Three days after sending this email, the publishing house in question and the other had agreed to the model of agency and signed a formal contract. Also included in this contract a clause that the publisher put a book at the same price on the iBookstore than from a distributor who has not adopted the agency model, and sell his books cheaper. Publishing houses became worthwhile that prices remain consistent, there are no mavericks from vendors decided to play the card of promo. Them plaintiffs explained:
For example, if the bookseller Barnes & Noble decided to sell the latest Tom Clancy customers to its Nook reading light with a 10% discount on the price of agency ($ 12.99) from the publisher Penguin (thus 11.69 $), while the Penguin would also sell $ 11.69 on the iBookstore. Barnes & Noble, Penguin and earn $ 9.09 B & N, $ 2.60. On iBookstore, Penguin would clear $ 8.18 (70% of $ 11.69) and Apple, $ 3.51 (30%). If distributors were selling even cheaper, it would become untenable for publishers. The latter should therefore ensure control of distributors to ensure that competition does not threaten the agency model.

Between January 27 and April 1, this system was imposed on everyone, including Amazon. Prices of new books then increased to $ 9.99 to $ 14.99 or 12.99, and more moderately for funds catalogs.

Penguin had to wait until June to change its pricing, because of existing agreements with Amazon. But in the meantime, Penguin stopped the delivery of its new titles to Amazon for not being in the situation to see them sold at low prices in the latter as they would display the new rates among other booksellers.

In the complaint, it is also told that the editors gave their support to Macmillan in its renegotiations with Amazon. Exchanges between officials from different publishers and the CEO of Macmillan show that they were behind him, and intended to show a united front against AmazonMacmillan also received the assistance of the skipper of Barnes & Noble, Amazon competitor who promised the support for this B & N was included titles from the publisher prominently in its rays and the results of research on the Nook.

Amazon, for-cons attack, withdrew the paper Macmillan books from its shelves. But having realized that five of the largest U.S. publishers were leagued against him (and accounting for half of its turnover), he gave up arms, provided the securities for sale 48 hours later and adopted the agency model (see also Amazon / Macmillan: lightning war).

Remained the case of Random House, the largest of the six American publishers (17% market share), which had declined the principle proposed by Apple and its competitors. The other houses were attempting to change his mind to generalize this new policy and also avoid that Random House does not benefit from its lower prices to their costs. The CEO of Penguin March 4 sent an email to his counterpart at Barnes & Noble, to put pressure on for Random House. The network of B & N has 700 stores in the U.S. and is 600 bookstores in schools and universities. He also sells the Nook, Kindle competitor. In other words, it is possible to twist an arm.

The email said: "Random House has chosen to remain on the current model and it will allow distributors to sell and costs of their choice (one sentence bolding in the original text, ed) I hope you will also abusive to publishers who threw themselves into the arms of your competitor with a disdain for the welfare support of your business ... I hope you do too badly at Random House, Amazon hurt people trying to make so that the publishing industry thriving. " It seems that the advice given was to stop any promotion of titles from Random House.

But Barnes & Noble continued to promote this editor. The CEO of Penguin returned to the charge this time and won his case. Throughout 2010, many continued to exert pressure on Random House, which finally yielded. March 11, 2011, Apple announced the coming of 17,000 e-books from Random House in the iBookstore. Markus Dohle, chief executive of the publisher said at the time "We are delighted that our iBookstore Apple offers electronic books for the first time."

The complainants submit that customers of e-books, because of the price increases they consider concerted, had to spend tens of millions of dollars more.

Hachette, HarperCollins and Simon & Schuster has signed an agreement with the Justice Department, which initiated the first survey. Apple has defended April 13, stating:
Charges of collusion against the DoJ Apple is simply not proven. The launch of the iBookStore in 2010 has encouraged innovation and competition, breaking the monopoly power of Amazon on the publishing industry. Since consumers have benefited from eBooks that are more interactive and interesting. Similarly we have allowed developers to set their prices on the App Store, publishers set their own on the iBookStore.

A trial should be held to term, and identical procedures were initiated by Brussels and England.

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