Amazon, Macmillan Fight Over Ebook Prices; After Amazon Removes Macmillan Titles, It Caves To Higher Prices

from the too-bad dept

On Friday, there was a sudden realization that Amazon had removed books published by publishing giant Macmillan, apparently over a dispute concerning ebook pricing. Of course, Amazon wasn't just removing Macmillan ebooks, but the physical books as well. After a bit of back and forth over the weekend, Amazon caved in and accepted the way Macmillan wants to price books, which means that Macmillan sets the retail price, and Amazon gets a cut. Previously, Amazon had paid a wholesale price and then got to set the retail prices itself.

I had been under the impression that when manufacturers tell retailers what the end user price is, it's a form of price fixing, but apparently not...

Of course, what may seem odd about this is that it appears Macmillan will make less per ebook under this model. That's because with its old wholesale pricing, Amazon was actually losing money on every ebook sold. As the NY Times notes:
In the model that Amazon prefers, publishers typically collect $12.50 to $17.50 for new e-books. Under the new agency model, publishers will typically make $9 to $10.50 on new digital editions.
So why are publishers specifically trying to limit their own profits from ebooks? Because they're afraid of ebooks cannibalizing hardcover book sales, which is why they're also looking to delay ebook releases. In fact, in this case, Amazon was given the choice of either increasing the retail price for consumers on Macmillan ebooks, or getting them many months later. All in all, this looks like publishers hurting themselves, yet again, by going against what consumers want in a misguided effort to preserve the way things used to be. Yet, in an age when users are punishing authors and publishers who don't treat them right, this could backfire in a big way.


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  1.  
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    The Anti-Mike (profile), Feb 1st, 2010 @ 3:07am

    I had been under the impression that when manufacturers tell retailers what the end user price is, it's a form of price fixing,

    No, price fixing is when manufactures or retailers get together and agree to a price for all similar goods, and agree not to compete on them.

    Book publishers each produce unique products, so there is no real price fixing possible, only a contractual agreement for what is an acceptable retail price for the product between the distributor and the retailer.

    If Amazon and Walmart got together to set a retail price for a specific book, that would be price fixing.

     

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  2.  
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    Jari Winberg, Feb 1st, 2010 @ 3:31am

    Re:

    Mike said: it's a form of price fixing

     

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  3.  
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    The Anti-Mike (profile), Feb 1st, 2010 @ 4:03am

    Re: Re:

    dirt is a form of water, just not liquefied.

     

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  4.  
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    Dementia (profile), Feb 1st, 2010 @ 4:07am

    Re: Re: Re:

    Actually dirt may contain water, or water may contain dirt, but neither is either.

     

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  5.  
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    haiku, Feb 1st, 2010 @ 4:07am

    Interesting: in South Africa retail price maintenance [RPM] - where the manufacturer sets the retail price - is illegal.

    Manufacturers can, however, suggest a price.

     

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  6.  
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    Griff (profile), Feb 1st, 2010 @ 4:13am

    Just like hardbacks / Paperbacks ?

    It is pretty standard for hardback edition to come out first.
    This forces people to choose between a price (maybe even a format) to suit them, and the desire to have it now.

    Though it can be pretty annoying to be forced to buy an overpriced, oversized hardback just to get it when you want it, it's how the industry has worked for a long time and anyone is free to choose not to buy it.
    About the only time when this would be seriously worrying is if the book was named on the national school curriculum and the publisher delayed the paperback until after term start.

    If eBooks are cheaper than paper then I'd expect publishers to do exactly the same (ie launch them later). And it's a business decision. They may actually be wrong (overall sales may suffer) but they're free to do it.
    If eBooks cost the same, then I'd be more surprised.

    There's no difference between believing paperbacks will cannibalise hardbacks, and believing eBooks will cannibalise paper (and DVD's will cannibalise theatres, DVD rentals will cannibalise DVD sales etc).

    The one small flaw in it all is that you are deliberately and explicitly choosing not to give customers what they want in an attempt to extract more money. In any other industry, someone might break ranks and just serve the customer. But if I am publishing a new book by author xx, there is noone else competing with me to publish that actual book.

    You could argue that if book xxx is only in hardback then I'll buy book yyy to read on the plane instead because that IS in paperback form.

    But if their business model is stupid, that's their funeral. It's the author I feel sorry for.
    But they (publishers) should be competing against each other to win the author, surely.


    What would bother me is if the publisher told one outlet (Amazon) what to charge and not every other outlet.

     

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  7.  
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    Simon, Feb 1st, 2010 @ 4:14am

    Deleting Macmillan content from Kindles...

    Someone told me that Amazon went so far as to remove sample Macmillan content (not paid for content) from people's Kindles. If this is true, didn't they promise never to do that kind of stuff again after the '1984' fiasco?

     

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    Fungo Knubb (profile), Feb 1st, 2010 @ 4:23am

    RE: Just like hardbacks / Paperbacks ?

    Griff is pretty much right on. What it does is delay and/or short change the author of any royalties they might receive from the sale of the e-book version. Maybe the author should find another publisher.

    Because of their pricing policies, I will not now, or ever purchase any book (hard cover, soft cover, e-book, etc.) published by Macmillan.

    One other thought .... Where do I go to get a pirated copy of the e-book that Amazon took down?

     

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  9.  
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    martyburns (profile), Feb 1st, 2010 @ 4:26am

    Re:

    "publishers each produce unique products, so there is no real price fixing possible".

    What if they get together and decide to never charge less than £20 for a hardback novel? I think that would be price fixing.

     

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  10.  
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    Bubba Gump (profile), Feb 1st, 2010 @ 4:28am

    Re: Re: Re:

    By your logic Umbrella is a form of Constaninople.

    But, in my book the only forms of water are:
    liquid water
    water vapor (clumps of molecules)
    gaseous water (1 or more molecules)
    ice
    snow (form of ice, but distinct enough to warrant its own line)

    Yep, I'm pretty sure dirt is not a form of water...

     

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  11.  
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    Jason Buberel (profile), Feb 1st, 2010 @ 4:49am

    For more info on Resale Price Minimums

    And their legality in the US (apparently, they are legal): http://en.wikipedia.org/wiki/Resale_price_maintenance A manufacturer is allowed to contractually stipulate minimum prices charged by their retailers/resellers.

     

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    haiku, Feb 1st, 2010 @ 4:51am

    Methinks these are simply the opening shots in the war ...

    Expect the publishers to join the RIAA in demanding that if you don't pay full hard-cover price for three e-books you should be cut off from all reading matter ... 8)

    The publisher's attitude is, of course, driving people to piracy. The Kindle price for technical books (selling in the $40+ price bracket) is on average about $2 cheaper than the hard-cover version, with the result that many are available for download as free PDFs

     

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    The Anti-Mike (profile), Feb 1st, 2010 @ 4:59am

    Re: Just like hardbacks / Paperbacks ?

    The one small flaw in it all is that you are deliberately and explicitly choosing not to give customers what they want in an attempt to extract more money.

    Actually, the one small flaw is assuming the customer is always right, because they are not.

    What makes me laugh out of all of this is that what the book sellers are doing is exactly the "artificial scarcity" system that Mike pushes so much. Hardcover books are the equal of the "pre-release box set" or the "autographed hoodie" or what have you, something that is rare by it's nature. If you want to be first to read a new book, you buy the hardcover. If you are just like the masses, you wait and buy the paperback or the digital version.

    It really is the same thing, just framed slightly differently. The artificial scarcity is what justifies the price, no different from paying $50 for a hoodie.

     

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  14.  
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    Anonymous Coward, Feb 1st, 2010 @ 5:01am

    amazon got a lot of flack for this on some of the other tech sites. things like "overstepping" and "monopoly" were thrown around. but i don't think that is fair.

    while i doubt either amazon or macmills cares about me specifically, amazon is thinking of me more than macmills is. amazon wants me to buy stuff. lots of stuff and all from amazon. therefor they do everything in their power to make this easy and afforable.

    the thing is this, hardcovers could be $50 and i'd still feel ripped off by a $15 ebook. they could be $100 and i'd still not buy a $15 ebook.

    with a hardcover i am getting something. i have a book that is well bound, durable, and usually printed nicely.

    for the ebook, i am getting a text file. a text file that is only mildly altered from the text file that was already created to make the printed book. it may not even come with a picture of the cover.

    i'd rather they delay the ebook and sell it at a reasonable price. the tiered system is flawed, yes, but at least we are used to it. i can wait for a book. macmills is banking on me still being able to afford it. and at $12-$15 an ebook, the answer is no.

    (but there is the real danger, no? if i wait for the book, i may not actually buy it. ever.)

    i have a nook. so far everything i have read on it has been in the public domain. here is where ebook readers are going to shine. if you have an ebook reader you don't have to pay for public domain books ever again.

    but when i start buying books (because i will) i will be very cautious about what I get. amazon had it right. if the ebook is a few cents cheeper than the paperback, why buy it?

    especially when i can find a free jules verne book to read.

    macmills thinks that it isn't competing with anyone since it alone puts out macmills books. but as much as i love auther X, if his stuff is too expensive, i'll read author Y. or play video games.

    this is starting to ramble, but the point is this: amazon was not the bad guy in this. sure it flexed its muscles. it had too. and it a way they did it for us. they lose if we don't buy this stuff.

    and macmills doesn't care about us. or the authors.

     

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  15.  
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    Anonymous Coward, Feb 1st, 2010 @ 5:05am

    Re: Re: Just like hardbacks / Paperbacks ?

    in a way, you are absolutely correct. the hardcover is the 'pre-release' and because of that i have no problem with the tiered release or pricing.

    but goods should be worth what they are, not in relation to others. an ebook should be $3-$7, not $15 just because the hardback is $30

     

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  16.  
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    Yeebok (profile), Feb 1st, 2010 @ 5:05am

    Sadly

    I think Griff has it right, and haiku has the end result. The companies can put any sort of value on it that they like. Individuals will be forced to pay .. or forced to wait and pay .. or not read it, or feel forced to copy it.
    I think it will become a lot like music, with 2 opposing factions and all the rest of it, and sadly the content creators are the ones who'll lose out.
    I think authors may need to find a way to CwF+RtB.
    Disclaimer : Blog comments are 95%+ of my interwebs posting total. Definitely no book deals.

     

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  17.  
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    bob, Feb 1st, 2010 @ 5:08am

    Until

    I own an e book like I own a dead tree book, I have no use for an e book.

     

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  18.  
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    Yeebok (profile), Feb 1st, 2010 @ 5:15am

    More..

    is exactly the "artificial scarcity" system that Mike pushes so much. Hardcover books are the equal of the "pre-release box set" or the "autographed hoodie" or what have you, something that is rare by it's nature. If you want to be first to read a new book, you buy the hardcover.
    Nice way to defeat your own logic in the middle sentence by adding the last one. Hardcovers are simply the company's way of providing an earlier version of a product at a higher price. There's no reason the first release method can't be paperback - or digital. Imagine : The first eBook sold in serial form over a year by subscription then sold as e/iBook, then physical copies. I'd pay to be part of that .. but meh.

     

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  19.  
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    haiku, Feb 1st, 2010 @ 5:18am

    BTW, Cory Doctorow had a well-reasoned article: see

    http://www.boingboing.net/2010/01/29/amazon-and-macmillan.html

     

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  20.  
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    PopeRatzo (profile), Feb 1st, 2010 @ 5:23am

    That iPad or Kindle isn't looking quite so good today.

     

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  21.  
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    techflaws.org (profile), Feb 1st, 2010 @ 5:24am

    Re: Re: Just like hardbacks / Paperbacks ?

    Actually, the one small flaw is assuming the customer is always right, because they are not.

    Actually they are. Cause otherwise they just don't buy and the manufacturer can feel right all that he wants, he just won't get any money out of it. Clever choice.

     

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  22.  
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    Anonymous Coward, Feb 1st, 2010 @ 5:26am

    Re: Re: Re: Re:

    "By your logic Umbrella is a form of Constaninople.
    "

    LOL

     

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  23.  
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    Forget Much?, Feb 1st, 2010 @ 5:29am

    Re:

    "Book publishers each produce unique products, so there is no real price fixing possible"

    Interesting ... I remember some time ago where the plastic disc people were convicted of something ... what was it again? - Oh yeah, price fixing. And guess what - each one of them produces a unique product! Imagine that.

     

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  24.  
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    Sneeje (profile), Feb 1st, 2010 @ 5:33am

    Re:

    "No, price fixing is when manufactures or retailers get together and agree to a price for all similar goods, and agree not to compete on them."

    No, that is both collusion AND price fixing.

     

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  25.  
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    dave blevins (profile), Feb 1st, 2010 @ 5:34am

    Time for authors to take back their rights and connect DIRECTLY with their readers. Both Amazon and Macmillan come out of this smelling, and not like a rose.

     

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  26.  
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    Sneeje (profile), Feb 1st, 2010 @ 5:36am

    Re: Re: Just like hardbacks / Paperbacks ?

    God, you're dense. Mike does not push "artificial scarcity" - Mike pushes "actual scarcity" in favor of artificial scarcity.

     

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  27.  
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    The Anti-Mike (profile), Feb 1st, 2010 @ 5:44am

    Re: Re: Re: Just like hardbacks / Paperbacks ?

    I am not dense. Most of his "actual" scarcity is artificial in nature, limits set by someone selecting to stop producing something, rather than any true scarcity.

    There is no shortage of cotton, no shortage of t-shirt plants, and no shortage of printers to make them (cheap too!). The only scarcity is when a human decides to order 50 of something instead of 1000.

    Hardcover books are the same sort of thing, the choice is made not to offer a paperback or digital version right away, and the hardcover books are often in limited supply (first printing, second printing, etc... more artificial scarcity). It isn't any different, there is no shortage of paper or printing presses, just a human choice to limit production (artificially creating scarcity).

    There are few true actual scarcities, time being one of the very few.

     

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  28.  
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    techflaws.org (profile), Feb 1st, 2010 @ 5:56am

    Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    There are few true actual scarcities.

    And intelligence as you keep demonstrating.

     

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  29.  
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    The Anti-Mike (profile), Feb 1st, 2010 @ 6:00am

    Re: Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    That's all you got? Talk about a "flaw".

     

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  30.  
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    Anonymous Coward, Feb 1st, 2010 @ 6:05am

    Re: Re: Re: Re:

    No, Istanbul was Constantinople but now it's Istanbul not Constantinople. So if you have a date in Constantinople she'll be waiting in Istanbul.

     

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  31.  
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    mjb5406 (profile), Feb 1st, 2010 @ 6:15am

    Re:

    Actually, a company forcing a reseller to sell a product at a particular price was outlawed years ago... for example, back in the 70's and earlier, manufacturers of some stereo equipment, like Marantz and Pioneer, required its resellers to only sell at a price THEY set, arguing that the practice leveled the playing field between smaller shops and larger chains (at the time, chains like Playback and Pacific Stereo). I don't know the timeline, but that practice was eventually outlawed. I think, though, there is more to this than a vendor simply dictating price... if nothing else, it smacks of collusion between Macmillan and Apple, where Apple accepted Macmillan's terms and then turned around and said "but we need help stopping other ebook vendors from charging less than we do". THAT would be construed as price fixing, because of collusion between Macmillan and Apple.

     

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  32.  
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    Haywood (profile), Feb 1st, 2010 @ 6:20am

    One of these days.....

    Some popular Author could at the end of his or her contract decide not to renew with the publisher. They could then self publish in E-book and / or audio book only.
    The overall profits would be less, but with fewer hands in the pie, the authors share should be greater.
    If someone decides to run with this, & do the Audio books please hire one of the great female voices out there, I've seldom heard a great male narrator. The absolute best is; one of each (Male and Female) in which case it becomes more like a radio play.

     

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  33.  
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    Anonymous Coward, Feb 1st, 2010 @ 6:24am

    While I prefer a hardcover book an ebook a reader was on the list as it is so much easier to travel with.

    That being said ebooks are simply not worth $15 apeice. This on top of the puchase price of the device really is a big strike in the cost benefit analysis.

     

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  34.  
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    Alfie, Feb 1st, 2010 @ 6:25am

    Not quite

    Yes, under Amazon's terms Macmillan might make more money on paper, but the contract needed to work in that agreement requires Macmillan to essentially cede the legal role of 'publisher' to Amazon. Which is what Amazon's after here, becoming not only the consumer retailer and the distributor, they want to be the *publisher* to boot, completely disrupting the publishing business over time, which isn't necessarily a bad thing - but Amazon having all these roles is a really Really Bad Thing.

     

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    mariush (profile), Feb 1st, 2010 @ 6:31am

    iPad rumor

    There's also a rumor this publisher made deal with Apple to have his ebooks on iPad, but Apple didn't like the 9.99$ price and wouldn't publish their books on iPad unless they set the prices higher or the same on competitors.

     

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  36.  
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    Michael, Feb 1st, 2010 @ 6:40am

    Resale Value

    One more thing on top of all of this that physical books have an increased value based on their resale value. Hardcover books, though more expensive, are worth more in a resale market and soft cover books.

    In the case of a kindle, an e-book has zero resale value because you are unable to sell the e-book after you are done reading it. This can have a huge impact on the value of a good.

    I'm not sure if there is a (legal) resale market for non-drm'd e-books yet, but this would certainly increase their value.

     

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  37.  
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    Hephaestus (profile), Feb 1st, 2010 @ 6:41am

    Re: More..

    "Hardcovers are simply the company's way of providing an earlier version of a product at a higher price."

    In studio speak its a window ... and eventually there will only be one or maybe two windows.

     

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  38.  
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    techflaws.org (profile), Feb 1st, 2010 @ 7:01am

    Re: Re: Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    I knew you wouldn't get it. Thanks for proving my point.

    Besides, ALL I got was what I posted 4 posts up which of course you chose to ignore, like you always do when you're running out of comebacks.

    Gosh, if you're really the best chill the industry can come up with they will be gone sooner than even I thought. Good riddance.

     

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  39.  
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    Anonymous Coward, Feb 1st, 2010 @ 7:17am

    I think a lot of people are missing one important fact: the Amazon-Macmillan relationship is not a retailer-supplier relationship. Amazon is acting as Macmillan's agent. Or at least they are now. This is part of what Amazon agreed to. As an agent, they are bound by the terms of the agency agreement.

     

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  40.  
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    The Mighty Buzzard, Feb 1st, 2010 @ 7:20am

    Re: Just like hardbacks / Paperbacks ?

    "But if I am publishing a new book by author xx, there is noone else competing with me to publish that actual book."

    Except thepiratebay and demonoid and such. Jerk your customers around on prices and free starts looking pretty attractive, regardless of legality.

     

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  41.  
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    Forge, Feb 1st, 2010 @ 7:21am

    Re: Deleting Macmillan content from Kindles...

    "Someone" was incorrect.

     

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  42.  
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    The Mighty Buzzard, Feb 1st, 2010 @ 7:27am

    Re: Re: More..

    You know what happens to the windows of annoying asshats, right? Kids with rocks.

     

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  43.  
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    A. Whitney, Feb 1st, 2010 @ 7:30am

    Re: Not quite

    Yes, here's Macmillan (Tor) author Charlie Stross with a blog that gives his take on the fight.

    http://www.antipope.org/charlie/blog-static/2010/01/amazon-macmillan-an-outsiders.html

    He says that the Macmillan terms of the agreement were to retain their rights as publisher, something Amazon was pushing them to cede.

     

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    The Anti-Mike (profile), Feb 1st, 2010 @ 7:53am

    Re: Re: Re: Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    If I worked "in the industry" you might have a point, but since I don't, I am not a "chill" (sic). I do like your website though, it's very informative.

     

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  45.  
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    NAMELESS.ONE, Feb 1st, 2010 @ 8:04am

    HUH

    i make a digital copy
    it costs you more then 12.50 amazon?
    Anyone have a issue with this?

    DAMN if this were the case then whats the dal with pirated ebooks
    if they all cost 12.5 to reproduce then wtf is going on

    LIES AND MORE LIES
    back to my 95GB of rpg ebooks and 200,000 novels
    screw you and your price lying

     

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  46.  
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    Josh Berry, Feb 1st, 2010 @ 8:08am

    Didn't work for music.

    I find it alarming that so many people are defending the publishers on this one. It reminds me of when music publishers were trying to raise the cost of mp3s to 1.50. Had they gotten someone as hard hitting as Amazon on board with that, we would have slaughtered Amazon versus Apple in that debate. However, it seems the trend is reversed, and nobody wants to bad mouth Apple.

    This saddens me.

     

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  47.  
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    copyright is nt ownership, Feb 1st, 2010 @ 8:08am

    ANTI MIKE is dense

    "by icon The Anti-Mike (profile)

    I am not dense"

    everyone stopped right there and agreed that you are dense
    AS WOOD which btw does contain trace amounts of water

    too bad this isnt like the cbc website where you can give thums up or down cause i'll be 99.9% will thumbs up this

     

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  48.  
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    Richard (profile), Feb 1st, 2010 @ 8:12am

    Re:

    "Book publishers each produce unique products, so there is no real price fixing possible, only a contractual agreement for what is an acceptable retail price for the product between the distributor and the retailer."

    In the UK the right of publishers to do this was conferred by the Net book Agreement.

    http://en.wikipedia.org/wiki/Net_Book_Agreement

    Whatever you call it's now illegal in the UK.
    (Quote from the wikipedia page linked above)

    "In March 1997 the Restrictive Practices Court ruled that the Net Book Agreement was against the public interest. It was therefore ruled illegal."

     

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  49.  
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    Richard (profile), Feb 1st, 2010 @ 8:16am

    Re: Re: Just like hardbacks / Paperbacks ?

    "QWhat makes me laugh out of all of this is that what the book sellers are doing is exactly the "artificial scarcity" system that Mike pushes so much. Hardcover books are the equal of the "pre-release box set" or the "autographed hoodie" or what have you, something that is rare by it's nature. If you want to be first to read a new book, you buy the hardcover. If you are just like the masses, you wait and buy the paperback or the digital version."

    and what makes me laugh is that is a complete misunderstanding of what Mike has been saying. It's SO wrong I can't een work out how to start putting it right.

     

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  50.  
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    Sneeje (profile), Feb 1st, 2010 @ 8:16am

    Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    Then you completely misunderstand the definition of scarcity as defined by pretty much the entire field of economics. Scarcity does not mean there is a "local" limit to the amount of something available to suppliers and consumers. It does mean that there is a "practical" limit to the amount that can be created, distributed, etc. that affects the MARGINAL COST. The reason a human decides to only order 50 is because there are limits to the amount they can cost effectively acquire and limits to the amount they can cost effectively sell.

    Things that are for all intents and purposes infinite (digital copies), have an extremely low (if not zero) marginal cost. Companies often try to artificially set prices that defy the pressure created by that low marginal cost. Thus the problem.

     

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  51.  
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    Anonymous Coward, Feb 1st, 2010 @ 8:21am

    Re: Re: Re: Just like hardbacks / Paperbacks ?

    I would hope that the prices for books on the market would start to decline as do the prices for the book on paper. Early high prices that decline to the remaindered price, the paperback price and the used book shop price.

    Macmillian could continue to see profits on books that have gone out of print.

     

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  52.  
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    Richard (profile), Feb 1st, 2010 @ 8:24am

    Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    "There are few true actual scarcities, time being one of the very few."

    In particular the time of an author. So if he/she takes the time to sign a copy of a book that is a real scarcity not an artificial one.

    Copyright in contrast is an artificial scarcity because it is created by the laws of man rather than the laws of nature.

    Mike is saying that what you need to do is to find real scarcities (usually based on someone's time which is one of the few - as you admit) rather than artificial ones.

     

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  53.  
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    Richard (profile), Feb 1st, 2010 @ 8:31am

    Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    "I am not dense. Most of his "actual" scarcity is artificial in nature, limits set by someone selecting to stop producing something, rather than any true scarcity.

    There is no shortage of cotton, no shortage of t-shirt plants, and no shortage of printers to make them (cheap too!). The only scarcity is when a human decides to order 50 of something instead of 1000."

    No but the thing that makes the T shirt scarce (and everything else you mentioned) is it's provenance. There are many early 19th century chairs around - they sell for a few tens of pounds each - however the one that Napoleon sat on whilst planning the campaign at Waterloo....

     

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  54.  
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    RD, Feb 1st, 2010 @ 8:37am

    TAM the amazing TAMHOLE

    "What makes me laugh out of all of this is that what the book sellers are doing is exactly the "artificial scarcity" system that Mike pushes so much. Hardcover books are the equal of the "pre-release box set" or the "autographed hoodie" or what have you, something that is rare by it's nature. If you want to be first to read a new book, you buy the hardcover. If you are just like the masses, you wait and buy the paperback or the digital version.

    It really is the same thing, just framed slightly differently. The artificial scarcity is what justifies the price, no different from paying $50 for a hoodie."

    Wow....just...wow. You have now officially gone off the plot. Your lies and misrepresentation of things is so far beyond what everyone else's is, that you have now completely and utterly undermined your credibility to an absolute. You stand revealed for the paid shill you are.

    You SHOULD know by now that Mike does NOT advocate either "give everything away free" or "artificial scarcity" through things like windowed releases. It has now become abundantly clear that you will stoop to any level to try to twist the themes of this site and these viewpoints to try to discredit them, even if it means complete misrepresentation and outright fabrication.

    Pre-release/windowed forcing of scarcity IS NOT what Mike advocates here. His entire econ 101 here is: USE FREE to help ALSO SELL scarcities. You, of course, only hear one of 2 things: "FREE", as in, give EVERYTHING AWAY, and "Scarcities" which you interpret as selling t-shirts. Mike has been a strong opponent AGAINST this EXACT scenario: forcing people to buy the more expensive item by WITHHOLDING any other, especially a free or low cost option. You, on the other hand, swing in like a retarded CEO and go "See! see! Mike is the same!" as if you've just "gotten" him in some kind of moral inconsistency, when in reality, you lie and misrepresent, build a straw man, then go "gotcha!!"

    You now, officially, have nothing to add to any of these conversations except bile, invective, lies, strawmen, and corporate stoogery.

    Mike, is there any way to filter out comments by a particular poster, so they never show on my screen when I view them?

     

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  55.  
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    Richard (profile), Feb 1st, 2010 @ 8:39am

    Re: For more info on Resale Price Minimums

    They are definitely illegal in the EU.

    The Net Book Agreement - which was the relevant one to the current case in the UK was ruled illegal over 10 years ago - and it was the last surviving vestige of Resale Price Maintenance in the UK.

     

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  56.  
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    Anonymous Coward, Feb 1st, 2010 @ 9:05am

    Re: Re:

    Actually, a company forcing a reseller to sell a product at a particular price was outlawed years ago...

    That was a long time ago. It's perfectly OK in the new Amerika.

     

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  57.  
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    jhn, Feb 1st, 2010 @ 9:08am

    Um. Macmillan is a little nuts, trying to engage in resale price maintenance. Sure.

    But, Amazon are totally the bad guys here. They are trying to lock down control of a new market, and are not afraid to leverage their position with physical books to do it.

    Worst of all is their attempt to get "most favored nation" provisions in their contracts, where publishers cannot allow any of Amazon's competitors to underprice them.

    Who is really going against the customer here: the company that is seeking to lock down its control over content it merely resells, or the publishers, who want the flexibility to deal with multiple resellers on different terms? I'll take a competitive market any day, over an Amazon bottleneck.

    The "agency" model that Macmillan wants is stupid, as it prevents the resellers from differentiating themselves. But it's not as though Amazon is some hero company here. They're the ones that are the threat to the viability of ebooks.

     

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  58.  
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    Anonymous Coward, Feb 1st, 2010 @ 9:15am

    Re: Re: Re:

    Dirt is not a form of water and saying so just shows how illogical your arguments can be.

     

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  59.  
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    Anonymous Coward, Feb 1st, 2010 @ 9:16am

    Re: Re: Re: Re: Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    Yeah, TAM is not a shill, TAM is a shill/troll or a shitroll. That's our TAMMY!

     

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  60.  
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    Ben (profile), Feb 1st, 2010 @ 9:26am

    Re: Re: Re: Re: Re:

    Even old New York was once New Amsterdam ...

     

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  61.  
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    The Groove Tiger (profile), Feb 1st, 2010 @ 9:39am

    Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    Oh yeah, I forgot your argument that if something is manufactured, it's scarcity is "artificial", while something that grows on trees has a scarcity that is "natural". With extra vitamins.

     

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  62.  
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    Sneeje (profile), Feb 1st, 2010 @ 10:09am

    Re: TAM the amazing TAMHOLE

    I'm not sure he's doing it out of vindictiveness, although there is a certain bitterness behind his comments. But I can't say that the rest of us have been on our best behavior either.

    However, as my second post above demonstrates, I honestly think that part of the problem is a very odd view of economics on his (or her) part. I finally understand one of the major area of disagreements between TAM and the rest--I believe he completely misunderstands the economic concept of scarcity and its contribution to marginal cost.

    That's a pretty fundamental concept and until our understandings converge, there will never be much common ground.

     

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  63.  
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    The Anti-Mike (profile), Feb 1st, 2010 @ 10:29am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    ...and your an arsepick.

    Have a nice day troll.

     

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  64.  
    identicon
    Anonymous Coward, Feb 1st, 2010 @ 10:35am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    Kettle meet pot. Pot meet kettle.

     

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  65.  
    identicon
    Anonymous Coward, Feb 1st, 2010 @ 10:37am

    Re: Re: TAM the amazing TAMHOLE

    That's a really fancy way of saying TAM is stupid.

     

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  66.  
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    The Anti-Mike (profile), Feb 1st, 2010 @ 10:43am

    Re: Re: TAM the amazing TAMHOLE

    -I believe he completely misunderstands the economic concept of scarcity and its contribution to marginal cost.

    Actually, scarcity has absolutely nothing to do with marginal cost (the cost to create one more unit), but rather it has to do with supply and demand. Scarcity is what limits supply, and the price is created as a result of the demand, particularly when demand is in excess of supply.

    Artificial scarcity is to specifically limit supply where no real supply limit exists. "limited edition" anything where the limit is created only by choice means that supply is constrained only by choice, not by any true shortage.

    A music business example would be putting a major "stadium" act on a small night club tour. Those tickets are exceedingly scarce compared to demand, but that scarcity is artificial, because the band could just as easily play a larger room. The true scarcity is their time, not the number of seats. The seat scarcity would be artificially created.

    Anyway, what the publishers have done for a long time is create an artificial shortage of books. Essentially, they could very easily print new books are lower priced paperbacks right away, and satisfy the market demand in that manner. However, they manage supply, first putting the book out as a higher price (and quality) hardcover book, and then releasing it over time as a lower cost paperback.

     

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  67.  
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    Mike Masnick (profile), Feb 1st, 2010 @ 11:26am

    Re: Re: Re: TAM the amazing TAMHOLE

    Actually, scarcity has absolutely nothing to do with marginal cost (the cost to create one more unit), but rather it has to do with supply and demand.

    Heh. The above statement is basically "Hi, I'm The Anti-Mike and I don't understand economics *at all* and I am now going to show off how willfully ignorant I am."

    I have suggested in the past that a refresher course on basic economics might be in order for you. That you have chosen to continually misstate the most basic economic concepts is amusing in that it shows that you are not here to engage in any sort of informed debate.

     

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  68.  
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    Mischa Becker, Feb 1st, 2010 @ 11:27am

    Re: Re: Re: Re: Re: Just like hardbacks / Paperbacks ?

    You seem to be deliberately missunderstanding. To take your analogy to the extreme, if there is a shortage of cotton, it isn't actual scarcity it's artificial because the farmer choose to only plant 100 acres cotton instead of 1000.

    All physical goods are scarce because if you give one away you don't have it anymore and makeing another one requires time (and effort and materials).

    The only thing scarce about a digital good is its initial creation because it takes someones time. Once it exists you can give away millions of copies without loosing yours.

     

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  69.  
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    Chargone (profile), Feb 1st, 2010 @ 11:28am

    Re: Re: Re: Re:

    i think the Point was that the comment he was responding to is just as silly.

    not only that, whether TAM was right in the first place or not, the comment in question Didn't actually change the validity of his.

    If a fool says something wise, it does not make the statement less wise, nor necessarily make the fool less foolish. (though it's a good start on the second part :D )

     

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  70.  
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    Me, Feb 1st, 2010 @ 11:28am

    .... ok....now what?

    This just means I am not gonna purchase Macmillan through Amazon.... I for one will continue to buy my books second hand or get them from the library that way they still dont get anything.

     

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  71.  
    identicon
    Anonymous Coward, Feb 1st, 2010 @ 12:23pm

    Re: Re: Re: Re: TAM the amazing TAMHOLE

    That's our TAMMY!

     

    reply to this | link to this | view in thread ]

  72.  
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    Eric, Feb 1st, 2010 @ 1:38pm

    Things not spelled out?

    I'm trying to come to grasp w/ the argument between everyone and TAM. What TAM says makes sense to me. The publishers are creating a artificial scarcity in books w/ the hard back books. First edition books usually sell more than other editions do.

    But I think where the turn of the brain takes place is now in the digital realm? am I correct? Because the publishers can create their scarcity by just publishing 100 books the first time, but one person can buy that book and digitize it and turn it into a infinite good?

    Meaning before the digital age this was a possible type of raping the customer, but now the shoes on the other foot because we can make the scarce good infinite now?

    Am I getting the gist of the argument here? And I would never pay more than $2-$3 for something I can't resell, that isn't a piece of art, and that I can't lend out to friends. I'd like to know these people who need to take a whole library w/ them on vacation. Where are they going for so long and how much time do they have to read?

     

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  73.  
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    Danny (profile), Feb 1st, 2010 @ 1:46pm

    I might be a giant

    That's nobody's business but the Turks'

     

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  74.  
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    Danny (profile), Feb 1st, 2010 @ 1:49pm

    Sleeping it off

    I have no idea the legality, but I do know that Tempur-Pedic sets the retail pricing of its mattresses. Dealers are not permitted to either discount or surcharge the list price (though they find fancy ways to get around this vendor restriction).

     

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  75.  
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    Danny (profile), Feb 1st, 2010 @ 1:54pm

    Contribution margin question

    Without knowing the cost structure for the different formats (hard cover, soft cover, e-books), I can't evaluate what the logical pricing model should be.

    But it seems to me that once variable costs are figured in, the publisher should know what the contribution margin is for any given book in every possible format. And--this is the key point--shouldn't the publisher be indifferent to format if it is receiving the same contribution margin?

    For some reason publishers don't seem to be--and I can't figure out why.

     

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  76.  
    identicon
    Fentex, Feb 1st, 2010 @ 2:24pm

    Price fixing?

    I wonder if this is the idea of everytihng being licensed coming back to bite Amazon.

    If Amazon is a retailer who buys wholesale then the wholesaler has no authority to tell them what to do with/how to sale their property (in NZ, where I live, that's an illegal attempt to restrict competition).

    But if you've convinced everyone that what you're doing is moving licenses about then Amazon becomes an agent for other peoples licenses and starts getting a cut of the deal rather than an owner of the property at any time.

     

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  77.  
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    Niall (profile), Feb 1st, 2010 @ 3:37pm

    Re: Re: Just like hardbacks / Paperbacks ?

    Not a bad analogy, but the big problem is that generally the "pre-release box set" isn't 6-9 months before the rest of the album. Most 'artificial scarcity' elements operate at the same general time as the normal access. What seems to drive the piracy more is the highly artificial window of release - the same as in the movie industry with DVD releases. So, if publishers released this just a week or two early - or as a 'special' item at the same time (the same as many other products have, such as 1-disc and 2-disc DVD editions) then they will still likely have sales with less direct incentive for people to pirate.

    Also, the other problem with TAM's analogy is that he is comparing the hoodie-vs-music against hardback-vs-softback/ebook. The hoodie ISN'T the music, it's a totally different product. The Hardback IS the product, and a lot of people feel unable or unwilling to cough up that amount, yet have to wait several MONTHS for the main product. Imagine if the Blu-Ray was released 6 months before the DVD - a lot of people would be justifiably miffed, to put it mildly.

     

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  78.  
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    Mike Masnick (profile), Feb 1st, 2010 @ 10:41pm

    Re: Things not spelled out?

    I'm trying to come to grasp w/ the argument between everyone and TAM. What TAM says makes sense to me. The publishers are creating a artificial scarcity in books w/ the hard back books. First edition books usually sell more than other editions do.

    That's not an artificial scarcity, but a real scarcity. The determination of whether or not something is scarce or not has to do with the marginal cost to produce another one. If it's zero, the good is not scarce. If it's above zero, it's a scarce product. So the book publishers are creating real, not artificial scarcity. TAM's discussion is trying to redefine well accepted terms in economics because he never wants to be proven wrong.

    Meaning before the digital age this was a possible type of raping the customer, but now the shoes on the other foot because we can make the scarce good infinite now?


    More or less. Once a scarce good has become infinite, then the supply shoots up, and thus price in a competitive market gets pushed way way down.

     

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  79.  
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    techflaws.org (profile), Feb 1st, 2010 @ 11:41pm

    TAM running on empty, as usual

    LOL, thanks for taking the bait. As expected you actually can sink so low as to gloat over typos from a non native speaker. So much for lashing out when you're out of points.

    Well done, you poor little schmuck.

     

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  80.  
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    Bob Webster (profile), Feb 2nd, 2010 @ 8:10am

    Barnes and Noble

    I'm not sure of the status of MacMillan at Barnes and Noble, but Sunday they had The Politician eBook at $9.99, the price too low for MacMillan at Amazon. Today, that eBook is missing at bn.com.

     

    reply to this | link to this | view in thread ]


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