Verizon (VZ) posted a pretty impressive holiday quarter (one-time charges aside) with a good outlook on Tuesday, and the company’s share price rose as a result. There were also plenty of interesting takeaways from the carrier’s earnings call, but The New York Times’ Brian X. Chen zeroed in on one item of particular interest. Verizon launched new “Share Everything” plans last summer that make smartphone data more expensive for many users. The best thing about these plans for investors — and, not coincidentally, the worst thing about the plans for subscribers — is that Verizon is now making more money off of smartphone data as costs associated with transmitted that data are falling.

As an added bonus, Chen noted that Verizon’s faster data networks also cause users to eat through their data allowances more quickly. This eventually prompts them to buy more expensive plans with higher data caps, which of course net Verizon even more cash.

1. They must terminate their Agency Agreements with Apple within seven days after entry of the proposed Final Judgment.
2. They must terminate those contracts with e-book retailers that contain either a) a restriction on the e-book retailer’s ability to set the retail price of any e-book, or b) a “Price MFN,” as defined in the proposed Final Judgment, as soon as each contract permits starting thirty days after entry of the proposed Final Judgment.
3. For at least two years, they may not agree to any new contract with an e-book retailer that restricts the retailer’s discretion over e-book pricing.
4. For at least five years, they may not enter into an agreement with an e-book retailer that includes a Price MFN.

The Complaint and CIS provide a sufficient factual foundation as to the existence of a conspiracy to raise, fix, and stabilize the retail price for newly-released and bestselling trade e-books, to end retail price competition among trade e-books retailers, and to limit retail price competition among the Publisher Defendants. Although the Government did not submit any economic studies to support its allegations, such studies are unnecessary. The Complaint alleges a straightforward, horizontal price-fixing conspiracy, which is per se unlawful under the Sherman Act.... The Complaint also details the defendants’ public statements, conversations, and meetings as evidence of the existence of the conspiracy. The decree is directed narrowly towards undoing the price-fixing conspiracy, ensuring that price-fixing does not immediately reemerge, and ensuring compliance. Based on the factual allegations in the Complaint and CIS, it is reasonable to conclude that these remedies will result in a return to the pre-conspiracy status quo. In this straightforward price-fixing case, no further showing is required.

It is not necessary to hold an evidentiary hearing before approving the decree. Given the voluminous submissions from the public and the non-settling parties, which describe and debate the nature of the alleged collusion and the wisdom and likely impact of settlement terms in great detail, as well as the detailed factual allegations in the Complaint, the Court is well-equipped to rule on these matters. A hearing would serve only to delay the proceedings unnecessarily.

If unfettered e-books retail competition will add substantially to the competitive pressures on physical bookstores, or if smaller e-book retailers are unable to compete with Amazon on price, these are not reasons to decline to enter the proposed Final Judgment.

None of the comments demonstrate that either condition for predatory pricing by Amazon existed or will likely exist. Indeed, while the comments complain that Amazon’s $9.99 price for newly-released and bestselling e-books was “predatory,” none of them attempts to show that Amazon’s e-book prices as a whole were below its marginal costs.

Third, even if Amazon was engaged in predatory pricing, this is no excuse for unlawful price-fixing. Congress “has not permitted the age-old cry of ruinous competition and competitive evils to be a defense to price-fixing conspiracies.” ... The familiar mantra regarding “two wrongs” would seem to offer guidance in these circumstances.

It's a common scenario and most college students appreciate a teacher who's looking for ways to deliver a quality education without requiring them to make unnecessary book purchases. Unfortunately, in the case of Mike Tracy, a highly-regarded animator who'd been teaching at the Art Institute of California-Orange County for the past 11 years, refusing to make students buy an e-book they don't need may have cost him his job.

Tracy posted on his Facebook page that he's "been in a dispute" with the school for several months "over their policy of mandatory e-textbooks in classes where their inclusion seems arbitrary, inappropriate and completely motivated by profit.

EDMC continues to insist on e-books only and wants sole discretion over what e-books are used, compromising faculty independence and expertise in choosing best resources for class.

Art Institute requires students to pay a $50-$75 fee to download a temporary copy of the e-textbook from the Digital Bookshelf. Even if they want to buy a hard copy of the text, they still have to fork over the money for a digital version.

The government's complaint says the company, which offers classes online and at 105 locations in 32 states and Canada, repeatedly made false statements to conceal its practices and receive $11 billion in federal and state financial aid – nearly all of the company's revenue. The complaint alleges that student enrollment was the sole focus of its compensation system, and the company instructed recruiters to use high-pressure sales techniques like playing on an applicant's psychological vulnerabilities and inflating claims of career placement opportunities to enroll students regardless of their qualifications.

The future is not about one-time payments, the future is about freemium. A decent number of people convert to paying and they may not pay a lot but most of them actually pay more than you’d think.

I don’t know if freemium gets to console but I do know that humans like free stuff. I also know humans who will pay for something if they’ve tried it out and they like it.

I’ve wondered if freemium expands beyond the tablet, Facebook and smartphones, and out into consoles? I don’t think it’s impossible for that to happen.

What surprised me was how the audience seemed so set against cheap eBooks. Rather than taking my view that books are best sold at a price that readers find attractive, the general feeling of the audience seemed to be that books were already – as one man said – ‘cheap as chips’ while Norwegians had to pay £40 for one of Jo Nesbo’s books. When I explained that I had sold half a million eBooks last year, most of them for less than a quid, I was surprised to hear a few boos and hisses rather than the applause that I had expected.

The most surreal moment for me came when the President of the Publisher’s Association, Ursula Mackenzie, was trying to defend their policy of maintaining eBooks at a high price. Basically she was saying that books needed to maintain their value and that 20p and free eBooks needed to be stamped on.

I understand her view, but I’m a big fan of selling eBooks at lower prices providing you can get high volumes of sales. And I’m happy enough to give books away if it helps to bring in new readers.

Mark turned to the conversation around to the cost of books and how much went to the publisher, and asked Ursula to justify why the publisher’s took the lion’s share. She put forward the old arguments about editing and marketing and I tried to explain that with eBooks, an author with a large fan base can use fans to edit and proof-read. Everyone seemed to think that meant I thought writers could do away with editors, and of course that’s not the case. But not every writer needs a hard edit, some writers need little more than proof-reading and fact-checking and that can be done through fans. And my Jack Nightingale series is edited by a full-time editor on my agent's staff so those books need very little editing by my publisher. Yes, I know that some authors need a lot of editing. But I don't.

So I explain to Ursula – and the audience – that I can write a short story in five days and am happy to sell that at the Amazon minimum of 72p which generates me an income of 25p. At this point Ursula – who runs one of the biggest publishing houses in the UK – asked me “so you’re happy to work for 5p a day, are you?” The audience laughed and clapped, and I was frankly gob-smacked. I couldn’t understand why they hadn’t seen the fallacy in her comment. She was assuming that I spent five days writing a story and then sold one copy. She can’t possibly have believed that, could she? 

Of course I don’t work for 5p a day. My Inspector Zhang stories sell about five or six hundred copies a month. Each. So one story sells 6,000 copies a year. So over the next ten years it could sell 60,000 copies which means I’d get £15,000, which is £3,000 a day and that’s probably more than she gets paid.

We won't be doing that. Obviously they think it's the right thing to do after a certain amount of time. I just think it cheapens your intellectual property. I know both sides of it, I understand it. If you want to sell a whole bunch of units, that is certainly a way to do that, to sell a whole bunch of stuff at a low price. The gamemakers work incredibly hard to make this intellectual property, and we're not trying to be Target. We're trying to be Nordstrom. When I say that, I mean good value - we're trying to give you a fair price point, and occasionally there will be things that are on sale you could look for a discount, just don't look for 75 percent off going-out-of-business sales.

An e-book is a digital good. Ephemeral and intangible. Sometimes we don’t even have access to the e-book itself in the form of a file — in the case of Amazon, we’re just “renting” the e-book the same way you rent Taco Bell food. You bought it. It’s inside your device. But if Amazon decides you don’t need it anymore, one snap of the wizard’s fingers and the e-books are poof, gone, siphoned from your reader like gas from a gas-tank. E-books have no supply — if I buy one, it doesn’t reduce how many remain, because theoretically infinite copies remain. No cost to reprint. No cost to remake. It just… sits out there, attempting to be the very embodiment of the Long Tail.

This is what the audience sees and believes.

It matters little what the e-book actually costs.

It only matters what the audience thinks they should cost.

"The issue that we're struggling with quite a bit is something I've kind of talked about before, which is how do you properly value people's contributions to a community?” he said, reflecting on a discussion he had with Develop last year.

Last year Newell told Develop that “the games industry has this broken model, which is one price for everyone. That’s actually a bug, and it’s something that we want to solve through our philosophy of how we create entertainment products".

[....]

“An example is – and this is something as an industry we should be doing better – is charging customers based on how much fun they are to play with.

“So, in practice, a really likable person in our community should get Dota 2 for free, because of past behaviour in Team Fortress 2. Now, a real jerk that annoys everyone, they can still play, but a game is full price and they have to pay an extra hundred dollars if they want voice.”

“We're trying to figure out ways so that people who are more valuable to everybody else [are] recognized and accommodated. We all know people where if they're playing we want to play, and there are other people where if they're playing we would [rather] be on the other side of the planet.

"It's just a question of coming up with mechanisms that recognize and reward people who are doing things that are valuable to other groups of people."

In all the discussions about why book publishers demand that eBooks should be $15 and not $10, they say it is because they cannot afford to sell books at $10. That is, they cannot cover their legacy cost models on that number. Right. Which is why you must rebuild your cost structure for a digital goods industry with far lower prices. You start by paying your top execs much less than millions of dollars a year. Then you move your offices out of fancy midtown office buildings. Why should eBooks cost $15? Amazon is far more of an expert on optimal book pricing. They have far more data than publishers, since they experiment with pricing hundreds of thousands of times a day across millions of titles. Amazon can tell you the exact price for a title that will produce the most number of copies sold. Amazon is pretty sure that number is closer to $10 than to $15. Yes, they want to sell more Kindles. And they believe that lower eBook prices mean more eBooks sold which means more demand for Kindle. The negative coverage of Amazon is centered on them selling eBooks below cost in order to reach the $10 price point. But that is a function of publishers setting the cost higher than $10. If the profit-maximizing price for an eBook is $10, then publishers must adapt to set a wholesale price lower than that, even if it means your legacy cost structure doesn’t allow it. And that’s the rub.

There are a lot of good points both for and against Matter. For one thing, they've already doubled their $50,000 funding goal on Kickstarter, which at least demonstrates that people are willing to part with their money for something like this—but Kickstarter backers aren't necessarily representative of the broader consumer crowds they will need to court with the actual product. One of Salmon's key points is that since they are raising funds there, instead of going to venture capitalists, their business goals are less daunting: they just need to build something sustainable, not something that will make millions of dollars. The creators have said they don't plan to pull salaries unless the company is a massive hit. They've put a lot of focus on keeping their costs down, so, overall, their financial goals are very different, and a lot more attainable, than the average startup.

On the other hand, as Morse points out, there is plenty of great content out there for free. He doesn't believe there is truly an untapped demand for this kind of content, so Matter won't be able to compete. Salmon thinks the Kickstarter numbers say otherwise. Either way, the question is the same: can Matter produce content that is so good and so unique that people will want to pay for it?

I'm reminded of News Corp.'s iPad-only product The Daily, which launched last year to a lot of hype but quickly began losing engagement and talent. People were asking the same question: could The Daily manage to include such great content that people will need to read it in order to stay in the loop? Obviously, it couldn't.

Matter is more focused than The Daily and is targeting an entirely different audience with a higher standard of journalism, which gives it a leg up in that regard—but I still doubt its potential for one key reason that isn't getting much attention: the sharing barrier. The problem with putting a price tag on online content is that it actually reduces the appeal of that content, because one of the things people value most about good content is the ability to share and discuss it with their social circle. Exclusivity is a minus, not a plus, with most kinds of content (financial news being an exception, which is why most of the more successful paywalls online are on financial sites). Some people will be willing to pay 99 cents for an article, but a lot of them won't be willing to ask their friends to pay too by posting a link on Facebook, Twitter or their blog. Those who do are sure to get a lot of confused replies asking "wait, I have to pay?" Moreover, with a pay-per-article model instead of a subscription model, readers are going to have to decide each week if they want to keep paying. The mental transaction cost of 99 cents may be extremely low, but it adds up when you multiply it like that. These factors are going to make it very difficult to grow and retain their readership.

If Matter streamlines their costs enough, and their content is good enough, it's entirely possible that they can build a small core group of readers that keeps the one-article-a-week model afloat—but if that's the best possible outcome, is this really the best possible approach? Journalism online needs more than small-scale sustainable models, it needs ways to grow and expand, and that is never going to happen without advertising dollars. As Salmon says, Matter is trying to do "something which has historically been extremely rare, in the world of journalism: selling stories to readers, as opposed to selling readers to advertisers", and that means they are tackling the wrong problem. They still plan to include some advertising in the articles, but they should be putting a lot more focus on that side of the equation. There are companies out there that want to support this kind of content, and Matter's low-cost, VC-free model puts them in the perfect position to experiment with innovative sponsorship models—an approach that would be bolstered by opening up the content instead of locking it down, ultimately creating much bigger opportunities to fund quality journalism and turn a profit.

Unfortunately, we at www.elviscostello.com find ourselves unable to recommend this lovely item to you as the price appears to be either a misprint or a satire.

All our attempts to have this number revised have been fruitless but rather than detain you with tedious arguments about morality, panache and book-keeping - when there are really bigger fish to filet these days - we are taking the following unusual step.

If you should really want to buy something special for your loved one at this time of seasonal giving, we can whole-heartedly recommend, "Ambassador Of Jazz" - a cute little imitation suitcase, covered in travel stickers and embossed with the name "Satchmo" but more importantly containing TEN re-mastered albums by one of the most beautiful and loving revolutionaries who ever lived - Louis Armstrong.

The box should be available for under one hundred and fifty American dollars and includes a number of other tricks and treats. Frankly, the music is vastly superior.

If on the other hand you should still want to hear and view the component parts of the above mentioned elaborate hoax, then those items will be available separately at a more affordable price in the New Year, assuming that you have not already obtained them by more unconventional means.

No, no I don't think so at all. Certainly as a gamer I don't think what's going on is a good thing. Triple-A is as much about marketing these days as it is about production values.

Take a game like BulletStorm, for example. That game was supported and well reviewed but just didn't break out. It wasn't a failure, but it wasn't a success that could fund a series of projects either. That's a game that I think people loved but it's not one that gets the $100 million marketing budget, because that amount of money is only spent on a few sure-fire hits and annualised sequels.

There's a lot of great games out there that don't take off. How many games have you loved that sell less than three million units? There's probably dozens. Those games can't get made in today's games economy. So no, I don't think it's a good thing that the middle-class of games have gone away.

I'm not an expert here, but there is a huge impact from non-commercial marketing these days with things like Facebook and Twitter. If you don't spam people then you can be very useful to your customers. We were not forward-thinking in that area, but we're really driving in this space now and have more than one million Facebook fans.

But other forms of marketing and PR are starting to change things. The focus is changing from shoving TV ads in people's faces to actually building a community.

I don't know if there will be the same amount of TV adverts in five years' time. No one gets fired for buying TV ads, because they make sense, but soon they will start to make less and less sense. I think what could happen is a lot of money can be saved with less TV adverts and that itself, perhaps, could free up more money to take more risks and be more creative.

I think another thing that's changed is the way people are willing to spend their money. Consoles need to adapt to this. Game revenue has moved to the service model and the microtransactions model. Consoles need to start being comfortable with that. They need to be able to do something where small virtual items can be sold and bought for 20¢ without a long certification process and a price approval process.

Right now we're not even allowed to change the prices of virtual content. We're not even allowed to set the prices. I just don't think this protectionist approach is going to be successful in a world where the price of virtual items changes on a day-today basis.

Double-A games will never come back unless we get rid of this notion of a game being $60 or not released. The console manufacturers need to let this happen. The best way of driving developers to PC is telling them they have no freedom in what prices they can set for virtual items. It would be great to have the level of freedom that, say, Steam gives you.

I will be sharing the sales numbers on GOG compared to the competition. I think the numbers will speak for themselves, what DRM-free sales of even a triple-A title can achieve. Our values are universal and they don't only apply to older content. They apply to triple-A, day-one releases.

When we sign content for GOG, we contact abandonware websites and make them our affiliates. So they remove the illegal content, and instead they put a GOG banner and they direct sales and traffic to us. Step by step, we are cleaning up the market and we are making the back catalogue segment a visible, and viable, market for the industry.

"Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers."

A crucial problem is disconnection between the free market and required government regulation. Prices for many older medicines are low until the drugs are in short supply; then prices soar. But these higher prices do little to encourage more supply, because it can be difficult and expensive to overcome the technical and regulatory hurdles. And if supplies return to normal, prices plunge.

Amazingly, when I reloaded the page the next day, both priced had gone UP! Each was now nearly $2.8 million. And whereas previously the prices were $400,000 apart, they were now within $5,000 of each other. Now I was intrigued, and I started to follow the page incessantly. By the end of the day the higher priced copy had gone up again. This time to $3,536,675.57. And now a pattern was emerging.

On the day we discovered the million dollar prices, the copy offered by bordeebook was1.270589 times the price of the copy offered by profnath. And now the bordeebook copy was 1.270589 times profnath again. So clearly at least one of the sellers was setting their price algorithmically in response to changes in the other’s price. I continued to watch carefully and the full pattern emerged.

Once a day profnath set their price to be 0.9983 times bordeebook's price. The prices would remain close for several hours, until bordeebook "noticed" profnath's change and elevated their price to 1.270589 times profnath's higher price. The pattern continued perfectly for the next week.

Do the math:

2.99 x 40 = 11.96

.99 x 620 = 613.8

Amazon pays out 35% for ebooks priced below $1.99, and 70% for ebooks that are $1.99 and up. So the math is:

2.99 x 40 = 119.60; x .70 = $83.72


.99 x 620 = 613.80; x .35 = $214.83

I don't think publishers are ready for how low book prices will go. It seems insane, dangerous, life threatening, but inevitable.

Street Fighter IV for iOS recently slashed its price by a breathtaking 90% overnight, from £5.99 to 59p. Within 48 hours its position in the overall Top-Grossing chart (that's the list of all apps, not just games) instantly rocketed from 116 to 2. Coincidence or magic? You decide. But that's not all.

And just to reiterate -- we're monitoring the Top-Grossing chart, ie the one measuring money made, NOT the ordinary numer-of-sales one, where SFIV currently sits comfortably on top of everything else. What that means is that the game's sales have increased by dramatically more than 1,000% (because it would have had to sell 10 times as many just to hold the No.116 position at the new price, never mind climb 114 places).