Ok, so we all have heard of the settlement between Hachette, S&S, & HarperCollins have settled with the DOJ, read here. Now many people don’t understand the agency model, the “most favored nation” part that has been brought up or other parts of the eBook business. It hasn’t stopped many from jumping on the DOJ to say way to go, vs the #dojfail twitter tag that people have started to express how bad the department of justice just screwed everybody.
Here’s a down and dirty on the models for eBooks, before agency and after.
- Old model: retailers set the prices you pay (think of amazon saying we’ll buy your eBook from you, at a discount and then set the price we want to sell and screw you however we please)
- New model: publishers set the prices you pay (amazon still takes or apple takes a 30% cut, not exactly sure what amzn is complaining about, they still have millions)
I know very simple, more to it, but to be honest, that’s the easy way to describe it. Now people call the agency model price fixing, or that publishers and Apple colluded on the prices, colluded meaning – a secret agreement, especially for fraudulent or treacherous purposes; conspiracy: (one definition of it). Problem here is that no collusion was done, it wasn’t a secret, everyone knew about it. So going after everyone like the DOJ based on that, they were wrong from the start. Now the price fixing comments, take a look here, I’ll wait for you to come back. Ok, now what Nate talks about over there and references what Mark from Smashwords, who I barely agree with on anything, is about how airlines prices were fixed. The interesting thing was that if the govt kept prices low, affordable and people were buying like crazy for airlines, why wasn’t that bad? I disagree with Nate on one thought and that is that I do think the companies should be competing on service and if possible, sure price. I’m unique though, I rarely shop amazon, maybe 5 times since the site was up, I don’t buy eBooks there either, I’m not alone, as we know they hold 60% of the marketshare, so 40% are buying from somewhere else. Let’s not get into the other parts of eBook market where amazon is doing nothing; education, comics, etc., that would just make to much sense to talk reality.
Back to the point though, is that if you have to lower your prices and sell at a loss, it is usually because you don’t have the service abilities, the better quality. It’s like saying K-mart rocks because they are cheap; sure and crappy and full of junk. For me and many others I know, they want quality, they want service, I’m willing to pay a higher price for a higher quality and service level, something I have never seen from amazon. It’s like buying made in America vs china, sure it might be cheaper, but in reality it’s usually lower quality, falls apart or some lead paint warning comes down the line. The point is that publishers saying we want the Agency model to price eBooks means that it’s their content, they want to price it. When I was in retail, it was common knowledge that retailers would buy up print titles at steep discounts from the pubs, then price however we wanted, then in 6 months return the print books for money back. Yeah, sounds like a great business plan, anyone seen a waldenbooks or borders around, oh yeah, they failed. Now this wasn’t the cause of the failure, but running a business like that, just dumb all around, it affects everyone and to be honest, many times our books were full price when we got a 55% discount, the books still didn’t sell. Where was the DOJ to look into that realizing customers were getting screwed.
For those that think this is good news, you will be sadly mistaken, because if it holds, which I don’t think it will, Amazon will screw you in the end. Prices will go up, for all you independent authors, do you think amazon will care? They won’t amazon is in this for money, they are no more a champion of books then walmart is a champion of well, anything. What will happen is Apple, Penguin and Macmillan will fight, they will probably win and the other 3 will be happy to jump back on things. Because if it does move forward, more then likely amazon will form a monopoly on things, then you’ll have a lawsuit against them and I hope, if people are smart, a lawsuit against the DOJ for being the idiots who screwed this up.
Even the ABA is baffled by the decision and not sure why the DOJ is in bed with amazon, or basically what kind of back-alley handshake occurred, because it seems as though amazon wrote the settlement details for the DOJ, funny how that works to their benefit. You then have states trying to cash in on the settlement, which after reading that i had to laugh, millions of dollars to be returned to customers. Um, how did you get the number? Exactly what was overpriced, that $.99 eBook was too much, simple DON’T BUY IT. I hate when people whine about how expensive something is, like gas; yet they are the idiot driving down the road in a hummer h2 doing 85 or 90. Drive intelligently, buy intelligently, if you don’t like the price, don’t buy it. Nobody forces anyone to buy anything, last I looked, we all had free will.
The sad thing is in the end, the ones who will actually be hurt by this is the consumer, nothing was actually done to help them. Amazon has had the most favored nation clause in place well before Apple, yet DOJ didn’t say anything about that or the monopolistic stranglehold that amazon has had. Now I’m not just singling out Amazon, no more so then the DOJ did with the publishers and Apple. However, if you are going to say this is an issue and go after some, you can’t leave someone else out of the party you started because you like them.
One final thought on this, is that why eBooks? Is everything else the DOJ has to worry about less important? Maybe the true focus should be on the quality and business practices. People will buy what they like from whom they like, keeping the price the same does one thing, forces a company to step up quality in service and what they offer. If they don’t they go down, look at Sony and eBooks, who buys from them, hardly anyone, if any, why, they missed the boat, quality of devices went down, offering of titles is poor and just an overall bad experience with them. Let us the consumers decide what we want, I don’t need the DOJ telling me this or that, if I don’t like the price, I don’t buy it, plain and simple, or look for something else. Check out Laura Dawson’s blog for some great thoughts on this as well. Now let the comments and I have a feeling the rants begin.