Again, I never said they were doing anything out of the goodness of their hearts. They are a business, so I don't know why anyone would even expect them to be doing anything "out of the goodness of their hearts".
But having said that, if prices are artificially low in any given industry, then that will ultimately be to the detriment of that industry.
Do you think Amazon's price point of $10 was a realistic price point, or do you think they used their dominant position to create a price point which was artificially too low? And that that price point was geared more towards driving sales of the Kindle, than it was concerned with the long term health of the publishing industry?
Again, in case it isn't clear, none of this is to absolve Apple or the publishers of any wrong doing with regards collusion. But I do think the motives are much more of a grey area than the verdict necessarily suggests.
That arguments holds absolutely zero weight. You can't argue lower prices as being detrimental to the market and/or consumer. It doesn't work like that. The demand for eBooks has increased massively in the last few years, and Amazon was reacting to that by keeping prices lower in order to attract even more customers.
Apple realised pretty early on that they were not competitive (or were unwilling to be) so decided to collude with Amazon to raise the prices as Apple doesn't do "low priced" and wanted to increase the profit yield from the consumer. THAT is what was to the detriment of the market, not Amazon's low prices.
Notice that Google also adopted a similar strategy with their Nexus devices by subsidising and artificially reducing the retail prices of their devices....has this damaged the markets at all? No, in actual fact it has only helped the market grow and overall sales increase, so your argument doesn't stand up.
I will agree that Amazon's reasoning for keeping the prices so low was rather dubious, but if they can offer the best price then it's not affecting consumers in any way. It's not as if they were offering the products at a price point where nobody else could compete, it was just that their competitors, specifically Apple were unwilling to compete and that was what was causing damage to the market with the collusion to raise prices, hence the trial which Apple have now lost.
Regardless of what Amazon charge for the products, they will still have to give the publishers and authors their agreed rates. eBooks are durable goods and their actual content is long lasting and doesn't change.
Thus, I can't see how lower prices could damage the market other than increasing competitive pressure on Amazon's rivals. Once an eBook has been bought by a consumer, it's unlikely that it will be bought again, and if the price of that product was higher, it may deter consumers from buying another product. The lower price points counteract this.
Just because something is cheap, and selling well because it is cheap, doesn't mean that is all to the good of the industry.
Another example might be big supermarkets like Tesco.
Tesco still have to give farmers their agreed rates for things like milk.
That doesn't mean that the wholesale cost of milk is not artificially low, and to the long term detriment of suppliers.
Supermarkets largely sell disposable and short term goods, so no that is not another example.
Once milk runs out you have to buy it again. Once you've read a book, you can read it again without buying it again, thus the dynamics of the two scenarios you are trying to compare are totally different.
An eBook is a durable good, therefore Amazon's strategy does not directly harm consumers. Apple's strategy of raising prices however, does, and they have been punished for that.
I will agree that Amazon's reasoning for keeping the prices so low was rather dubious, but if they can offer the best price then it's not affecting consumers in any way. It's not as if they were offering the products at a price point where nobody else could compete, it was just that their competitors, specifically Apple were unwilling to compete and that was what was causing damage to the market with the collusion to raise prices, hence the trial which Apple have now lost.
I refer you back to points already made in this thread.
Likewise, my original point was predicated on whether or not Amazon's price point of $10 was artificially low or not.
Whether it is or not, I assume there's a case that it may be, on the grounds that Amazon were primarily interested in selling Kindle's, rather than acting in the best interests of the publishing industry.
I assume you would agree that there must be a price point which is too low, and would be to the long term detriment of the publishing industry?
Likewise, my original point was predicated on whether or not Amazon's price point of $10 was artificially low or not.
Whether it is or not, I assume there's a case that it may be, on the grounds that Amazon were primarily interested in selling Kindle's, rather than acting in the best interests of the publishing industry.
I assume you would agree that there must be a price point which is too low, and would be to the long term detriment of the publishing industry?
Selling Kindle's what?
That is the point I was indeed making, however that scenario is hypothetical and I doubt the Competition Commisions worldwide would allow the market to get to that stage. In this instance, the Amazon price was lower than the rest but it was still competitive.
It was just Apple's unwillingness to compete fairly that led to the trial and the subsequent finding that they were indeed guilty.
I find the coverage itself as fascinating. We already know music cost much more off Apple so revelations of the high prices are not that exciting.
Radio 5 had a US guest to tell us the revelations on the guilty verdict and he went on to inform us how fair it was for the publishers whilst prices were fair and competitive, comparing it to hardback books which could cost as much as $30.
All in all it felt a 'positive verdict' and no mention of how e-books cost pennies to create, even compared to paperbacks which, by lack of a mention, obviously do not compare.
On an opposite tack Radio 4 this morning was close to the subject with 'guilty of conspiring' and no mention of how fair it is for you and me. I guess that makes for BBC balance.
I'd certainly dispute 'vocal Apple consumers' wanting to pay as little as possible. It is a different world there,
Your ability to put words in people's mouths is breathtaking.
How about when you reply to posts, instead of doing that, you read what they've actually posted, and if you disagree with anything, try putting that into something more constructive.
For example:
1. Do you disagree that $10 for an ebook was arguably an artificially low price, only possible due to Amazon's unique position?
2. Do you think that $12-15 is an artificially high price for an ebook, bearing in mind the cost of a physical book?
Or do you just want to carry on playing the man rather than the ball....
No idea on any of those prices and more relevantly nor do you so don't make out you have your finger on the pulse of the book industry and can see why apple were doing this because as usual you would be talking nonsense.
You are as usual trying to find any possible way to defend apple, even now after being found guilty of ripping consumers off you still defend them pathetic and sad I'm afraid Mr pie
No idea on any of those prices and more relevantly nor do you so don't make out you have your finger on the pulse of the book industry and can see why apple were doing this because as usual you would be talking nonsense.
You are as usual trying to find any possible way to defend apple, even now after being found guilty of ripping consumers off you still defend them pathetic and sad I'm afraid Mr pie
Its not about defending Apple.
Its about seeing a difference between:
a. all companies colluding to keep prices artificially high.
and
b. some companies colluding to prevent their prices from having to be as artificially low as another company is able / willing to sell for.
I understand enough about it to see that Amazon were setting as low a price point as possible, because to them the ebooks could effectively be a loss leader to sell Kindle's.
Something that the publishers were not in a position to do.
Well let's see some proper evidence that this was behind apples illegal actively. Where is the evidence that amazon are colluding in prices? Albeit to keep them low which is of course bad for the consumer
Perhaps then you could show us how apples illegal actively was benefiting the consumer as what you have posted so far just seems like random made up nonsense.
Finally as I understand it but obviously not an expert like you I thought kindles were the loss leaders to sell more amazon products are you saying that I have this backwards? Because I am fairly sure that was the case
.b. some companies colluding to prevent their prices from having to be as artificially low as another company is able / willing to sell for....
Something that the publisher's were not in a position to do.
Yep, Apple doing a Robin Hood against the baddies by also fixing the price of their competitors. That was the Radio 5 guest spot feel explaining it to us all.
I understand enough about it to see that Amazon were setting as low a price point as possible, because to them the ebooks could effectively be a loss leader to sell Kindle's.
Something that the publisher's were not in a position to do.
Well but Amazon still has to pay the rates to publishers. And those rates have to be profitable for publishers and authors, because like Zach said, Ebooks are durable goods.
What Amazon does afterwords or why is part of the free market, the consumer should not be penalised because one company decided that without competing fairly, they too have the right to profit from a certain market.
Well let's see some proper evidence that this was behind apples illegal actively. Where is the evidence that amazon are colluding in prices? Albeit to keep them low which is of course bad for the consumer
Perhaps then you could show us how apples illegal actively was benefiting the consumer as what you have posted so far just seems like random made up nonsense.
Finally as I understand it but obviously not an expert like you I thought kindles were the loss leaders to sell more amazon products are you saying that I have this backwards? Because I am fairly sure that was the case
I never said I was an expert, but lames sarcasm is par for the course with you.
And I've never said anything about Amazon colluding.
Or anything about what is or isn't good for consumers. (But yes - I agree, if everything was ridiculously cheap, that would indeed be fabulous.)
Again, as this seems to be the point which is proving difficult to get across, my point is simply that there is a difference between collusion to create artificially high prices, and collusion not to charge the same, arguably, artificially low prices of a competitor.
I have already agreed that both cases do involve collusion.
But clearly, Apple + the major publishers colluding to charge $12-15 (i.e. less than half the RRP of a physical book) is quite different to Amazon + Apple + the major publishers colluding to charge $25.
As for which is the loss leader, I always understood it that the hardware was where the real money was. I'll gladly stand corrected if that's not the case.
Supermarkets largely sell disposable and short term goods, so no that is not another example.
Once milk runs out you have to buy it again. Once you've read a book, you can read it again without buying it again, thus the dynamics of the two scenarios you are trying to compare are totally different.
An eBook is a durable good, therefore Amazon's strategy does not directly harm consumers. Apple's strategy of raising prices however, does, and they have been punished for that.
Totally agree with this. Whilst Amazon's strategy may harm the industry it does not harm the consumers. Apple's certainly harmed me because the price of my ebooks went up after the agency pricing came in. Also it remains to be seen whether Amazon's strategy would have harmed the publishing industry if it was allowed to continue. Amazon used the same strategy in the physical book market and have dominated that sector. The industry survived that and is still going strong with healthy profits.
Likewise, my original point was predicated on whether or not Amazon's price point of $10 was artificially low or not.
Whether it is or not, I assume there's a case that it may be, on the grounds that Amazon were primarily interested in selling Kindle's, rather than acting in the best interests of the publishing industry.
I assume you would agree that there must be a price point which is too low, and would be to the long term detriment of the publishing industry?
Actually although Amazon want to sell kindles, their end game is content sales not device sales. They, like google sell their devices at cost price and their aim is to re-coup costs and make profit through content sales.
Have to admit you have completely lost me as to what your actual point is/was. On one hand your saying you never said amazon were colluding in the other you are.
Are you saying amazon are doing the same thing in essence to Apple because this is also criminal.
But in relation to kindle my understanding is that some models cost more to make than they retailed for which kind of makes your whole premise nonsense does it not.
Have to admit you have completely lost me as to what your actual point is/was. On one hand your saying you never said amazon were colluding in the other you are.
Are you saying amazon are doing the same thing in essence to Apple because this is also criminal.
But in relation to kindle my understanding is that some models cost more to make than they retailed for which kind of makes your whole premise nonsense does it not.
I also thought the hardware was loss leading. The ultimate aim is to lock people into their ecosystem.
Well let's see some proper evidence that this was behind apples illegal actively. Where is the evidence that amazon are colluding in prices? Albeit to keep them low which is of course bad for the consumer
Perhaps then you could show us how apples illegal actively was benefiting the consumer as what you have posted so far just seems like random made up nonsense.
Finally as I understand it but obviously not an expert like you I thought kindles were the loss leaders to sell more amazon products are you saying that I have this backwards? Because I am fairly sure that was the case
I don't understand how Apple's illegal actions can be defended here? There motives were not honourable in the slightest. They didn't give too hoots about the publishing industry, they did it to secure their own position in the market and prevent amazon from dominating. They were unwilling to compete on Amazon's terms, by offering competitive prices.
I don't understand how Apple's illegal actions can be defended here? There motives were not honourable in the slightest. They didn't give too hoots about the publishing industry, they did it to secure their own position in the market and prevent amazon from dominating. They were unwilling to compete on Amazon's terms, by offering competitive prices.
Exactly. It's not about Apple stepping in to save the publishing industry. It's about Apple wanting a slice of the ebook market without having to compete on price with the dominant, established retailer.
$10 doesn't seem unreasonably low to me for an ebook. Is it?
If the RRP is as much as 3x that, then its getting pretty low.
Similarly, does $12-15 seem unreasonably high?
Whilst I don't dispute that collusion took place, my only point really is that in most cases of price fixing, prices would be fixed at an artificially high price. And that I'm not convinced that was the case here.
Comments
That arguments holds absolutely zero weight. You can't argue lower prices as being detrimental to the market and/or consumer. It doesn't work like that. The demand for eBooks has increased massively in the last few years, and Amazon was reacting to that by keeping prices lower in order to attract even more customers.
Apple realised pretty early on that they were not competitive (or were unwilling to be) so decided to collude with Amazon to raise the prices as Apple doesn't do "low priced" and wanted to increase the profit yield from the consumer. THAT is what was to the detriment of the market, not Amazon's low prices.
Notice that Google also adopted a similar strategy with their Nexus devices by subsidising and artificially reducing the retail prices of their devices....has this damaged the markets at all? No, in actual fact it has only helped the market grow and overall sales increase, so your argument doesn't stand up.
I will agree that Amazon's reasoning for keeping the prices so low was rather dubious, but if they can offer the best price then it's not affecting consumers in any way. It's not as if they were offering the products at a price point where nobody else could compete, it was just that their competitors, specifically Apple were unwilling to compete and that was what was causing damage to the market with the collusion to raise prices, hence the trial which Apple have now lost.
But if that price is artificially low, then I don't know that it would be good for the publishing industry as a whole in the long term.
Thus, I can't see how lower prices could damage the market other than increasing competitive pressure on Amazon's rivals. Once an eBook has been bought by a consumer, it's unlikely that it will be bought again, and if the price of that product was higher, it may deter consumers from buying another product. The lower price points counteract this.
Another example might be big supermarkets like Tesco.
Tesco still have to give farmers their agreed rates for things like milk.
That doesn't mean that the wholesale cost of milk is not artificially low, and to the long term detriment of suppliers.
Supermarkets largely sell disposable and short term goods, so no that is not another example.
Once milk runs out you have to buy it again. Once you've read a book, you can read it again without buying it again, thus the dynamics of the two scenarios you are trying to compare are totally different.
An eBook is a durable good, therefore Amazon's strategy does not directly harm consumers. Apple's strategy of raising prices however, does, and they have been punished for that.
To take it to an absurd extreme - would it be better still if Amazon charged a penny for an ebook?
What happens to the publishing industry when no-one buys physical books anymore, but only buys ebooks for a penny from Amazon?
It might be a short term win for the consumer.
It might be a win for Amazon, who are shifting Kindle's faster than they can make them.
But I'm not sure its a win for the publishing industry in the long term.
I refer you back to points already made in this thread.
Whether it is or not, I assume there's a case that it may be, on the grounds that Amazon were primarily interested in selling Kindle's, rather than acting in the best interests of the publishing industry.
I assume you would agree that there must be a price point which is too low, and would be to the long term detriment of the publishing industry?
Selling Kindle's what?
That is the point I was indeed making, however that scenario is hypothetical and I doubt the Competition Commisions worldwide would allow the market to get to that stage. In this instance, the Amazon price was lower than the rest but it was still competitive.
It was just Apple's unwillingness to compete fairly that led to the trial and the subsequent finding that they were indeed guilty.
Radio 5 had a US guest to tell us the revelations on the guilty verdict and he went on to inform us how fair it was for the publishers whilst prices were fair and competitive, comparing it to hardback books which could cost as much as $30.
All in all it felt a 'positive verdict' and no mention of how e-books cost pennies to create, even compared to paperbacks which, by lack of a mention, obviously do not compare.
On an opposite tack Radio 4 this morning was close to the subject with 'guilty of conspiring' and no mention of how fair it is for you and me. I guess that makes for BBC balance.
I'd certainly dispute 'vocal Apple consumers' wanting to pay as little as possible. It is a different world there,
No idea on any of those prices and more relevantly nor do you so don't make out you have your finger on the pulse of the book industry and can see why apple were doing this because as usual you would be talking nonsense.
You are as usual trying to find any possible way to defend apple, even now after being found guilty of ripping consumers off you still defend them pathetic and sad I'm afraid Mr pie
Its not about defending Apple.
Its about seeing a difference between:
a. all companies colluding to keep prices artificially high.
and
b. some companies colluding to prevent their prices from having to be as artificially low as another company is able / willing to sell for.
I understand enough about it to see that Amazon were setting as low a price point as possible, because to them the ebooks could effectively be a loss leader to sell Kindle's.
Something that the publishers were not in a position to do.
Perhaps then you could show us how apples illegal actively was benefiting the consumer as what you have posted so far just seems like random made up nonsense.
Finally as I understand it but obviously not an expert like you I thought kindles were the loss leaders to sell more amazon products are you saying that I have this backwards? Because I am fairly sure that was the case
Yep, Apple doing a Robin Hood against the baddies by also fixing the price of their competitors. That was the Radio 5 guest spot feel explaining it to us all.
Well but Amazon still has to pay the rates to publishers. And those rates have to be profitable for publishers and authors, because like Zach said, Ebooks are durable goods.
What Amazon does afterwords or why is part of the free market, the consumer should not be penalised because one company decided that without competing fairly, they too have the right to profit from a certain market.
I never said I was an expert, but lames sarcasm is par for the course with you.
And I've never said anything about Amazon colluding.
Or anything about what is or isn't good for consumers. (But yes - I agree, if everything was ridiculously cheap, that would indeed be fabulous.)
Again, as this seems to be the point which is proving difficult to get across, my point is simply that there is a difference between collusion to create artificially high prices, and collusion not to charge the same, arguably, artificially low prices of a competitor.
I have already agreed that both cases do involve collusion.
But clearly, Apple + the major publishers colluding to charge $12-15 (i.e. less than half the RRP of a physical book) is quite different to Amazon + Apple + the major publishers colluding to charge $25.
As for which is the loss leader, I always understood it that the hardware was where the real money was. I'll gladly stand corrected if that's not the case.
Totally agree with this. Whilst Amazon's strategy may harm the industry it does not harm the consumers. Apple's certainly harmed me because the price of my ebooks went up after the agency pricing came in. Also it remains to be seen whether Amazon's strategy would have harmed the publishing industry if it was allowed to continue. Amazon used the same strategy in the physical book market and have dominated that sector. The industry survived that and is still going strong with healthy profits.
Actually although Amazon want to sell kindles, their end game is content sales not device sales. They, like google sell their devices at cost price and their aim is to re-coup costs and make profit through content sales.
Have to admit you have completely lost me as to what your actual point is/was. On one hand your saying you never said amazon were colluding in the other you are.
Are you saying amazon are doing the same thing in essence to Apple because this is also criminal.
But in relation to kindle my understanding is that some models cost more to make than they retailed for which kind of makes your whole premise nonsense does it not.
I also thought the hardware was loss leading. The ultimate aim is to lock people into their ecosystem.
I don't understand how Apple's illegal actions can be defended here? There motives were not honourable in the slightest. They didn't give too hoots about the publishing industry, they did it to secure their own position in the market and prevent amazon from dominating. They were unwilling to compete on Amazon's terms, by offering competitive prices.
Exactly. It's not about Apple stepping in to save the publishing industry. It's about Apple wanting a slice of the ebook market without having to compete on price with the dominant, established retailer.
Of course Apple weren't doing anything out of the goodness of their hearts to save the publishing industry.
But that doesn't mean that up until that point Amazon didn't have the publishing industry over a barrel.
If the RRP is as much as 3x that, then its getting pretty low.
Similarly, does $12-15 seem unreasonably high?
Whilst I don't dispute that collusion took place, my only point really is that in most cases of price fixing, prices would be fixed at an artificially high price. And that I'm not convinced that was the case here.