Thursday, September 13, 2012

Kindle News: Judge Cote approves anti-trust settlement, and some Kindle book prices drop.

Judge Cote approved the settlement between DOJ and three publishers, and some Kindle book prices have already dropped.

This all happened while the Amazon new Kindles were being announced, and I concentrated on the many new-Kindle details.  A bit earlier, the Dept of Justice had prepared more papers asking Judge Cote to approve the antitrust settlement, and the information to justify that was similar to what went before..

  Many had thought that it would be some time before the judge made a decision, as there was so much opposition to the settlement by the usual groups, but she approved the settlement quickly, within days.

Agency Agreements and final judgment
  The Agency Agreements were made when the Big5 settling publishers were communicating among themselves in early 2010 (leaving quite a paper and e-document trail in what's been deemed a quite open colluding to fix selling-prices).   In the past, traditional agreements consisted of the publisher setting recommended list-prices, and Amazon had used these amounts as a basis for payments they made to publishers, guaranteeing them payment even on e-books sold as loss-leaders).

  Peers writes that the final judgment entered in court on Sept. 7 gave the publishers "10 days to take steps to let e-book retailers out of agreements that prevented discounting" (from that day, I guess).

  PaidContent's Jeff John Roberts writes, "the publishers must abandon so-called "agency pricing" contracts within seven days of the settlement’s approval."

E-book price reductions discussed in Kindle Forums
A few days ago, members of the Kindle Forum Community traded info on e-book prices they saw already coming down, on books published by the companies who settled with the DOJ, and the consensus was that the price drops were averaging about 27% at the time but that not many of the prices had been modified to show $9.99.

WSJ mentions a bestseller sold at $9.99
  The Wall Street Journal's Martin Peers points to a new release sold for $9.99 at Amazon and at Apple's iBook store.  However, there have always been a few that were sold at that lower price, the difference being that two years before, most NYT e-bestsellers were sold at $9.99, and I'm not sure this was a price-drop rather than an agreed price.

  "Under terms of the settlement," Roberts reports, "Amazon can sell titles below cost so long as all their e-book sales together do not add up to a loss."

The two publishers who haven't settled
  The two publishing houses that chose not to settle were Penguin Group (USA) and Macmillan, as they are among those who find the too-comfortable ("not enough friction") public library borrowing of e-books unattractive, even at only one borrower at a time per paid e-book)

The three who have settled
  Harper Collins confirmed it has reached a new agreement with Amazon and other retailers.

  Peers adds that it's not clear when Simon & Schuster Inc and Hachette Book Group will reach new deals.

Apple matches Amazon's new lower price on a an e-book WSJ was watching
  The Wall St. Journal's closing paragraph is especially interesting.
' Apple, however, appears to be intent on remaining competitive with Amazon. While “Telegraph Avenue” was initially listed at $17.99 on iBooks on Tuesday, that quickly dropped to $9.99. '

Full articles and some words from Judge Cote, who doesn't mince them
You can read the full article at the WSJ blog.

There are some nuggets from a very straightforward but colorful Judge reported by what seems a somewhat dubious Roberts, who writes, "Her latest ruling suggests she is more convinced than ever:"
' Although the Government did not submit any economic studies to support its allegations, such studies are unnecessary… In this straightforward price-fixing case, no further showing is required. '

  Although upcoming hearings on the settlement were expected, giving Apple and others another opportunity to voice their objections, 'Judge Cote wrote that a hearing was unnecessary given the voluminous facts submitted by the government: "A hearing would serve only to delay the proceedings unnecessarily."'

  Although, Roberts writes, "the vast majority of public comments in response to the settlement were negative", Judge Cote adds, he says,
' that some of those comments were "extreme" and sought to blame "every evil to befall publishing on Amazon’s $9.99 price for newly released and bestselling e-books, and crediting every positive event — including entry of new competitors in the market for e-readers — on the advent of agency pricing."

And (I have to love this just for the poem) he reports that she also "adds a paean to books and reading, and posts a Dickinson poem in the middle of the judgment:
' There is no Frigate like a Book
To take us Lands away,
Nor any Coursers like a Page
Of prancing Poetry –
This Traverse may the poorest take Without oppress of Toll –
How frugal is the Chariot
That bears a Human soul '

Next steps:
1.   U.S. Court of Appeals

2.   Apple and the two other publishers who haven't settled with the DOJ have chosen to go forward with the trial, next summer, provided they don't decide to settle.

While the three settling publishers agreed to pay "millions of dollars" in a deal with state governments, Roberts shows that individual consumers won't see that much from it.  From what I read in earlier articles on the settlement, they will be able to enter into agency agreements (which were not the problem), on an individual basis this time, a couple of years down the road

Here's the Opinion.  The document was filed Sept 6, 2012 (a red letter day for Amazon)

Here's more info on it all from the other side of the story (Publishers Weekly)

Ongoing Discounted-book alerts message thread is now more active as a result
  I'll link you to a Sept 11 page starting with the first meaningful discount, as many are only a dollar or so before that.  You can go backwards and forwards in the thread of course.

Earlier e-book pricing-war articles in the area here
History of the e-book pricing wars with sourcing
TIMELINE - articles written at the time, w/ sources and factors included in the lawsuit

Check often: Temporarily-free recently published Kindle books
  Guide to finding Free Kindle books and Sources.  Top 100 free bestsellers.  Liked-books under $1
UK-Only: recently published free books, bestsellers, or £5 Max ones
    Also, UK customers should see the UK store's Top 100 free bestsellers.

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