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

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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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Kindle News: US Dept. of Justice and Apple/Big5 may settle soon. The issues.

Friday I saw a WSJ article about the strong rumors that the Department of Justice and the "Agency" grouping of Apple and Big 5 publishers back in Jan. 2010 are likely to settle soon, before the U.S. Dept of Justice goes ahead with the lawsuit they've mentioned strongly.

Reuters writes it could happen "in the next few weeks" and they have two sources "close to the negotiations" though no one's said which side of the issue the two sources are.  It doesn't seem likely to me (but who knows?) that Apple/Big5-associated would leak a rumor that they are working toward a settlement in which they'd need to give up some of their control over retailer prices.

' While negotiations are still fluid, the settlement is expected to eliminate Apple's so-called "most favored nation" status, which had prevented the publishers from selling lower-priced e-books through rival retailers such as Amazon.com Inc (AMZN.O) or Barnes & Noble Inc (BKS.N), the people said. '

Most news writers agree that both Amazon and customers would benefit from a move back to something like the "wholesale model" that had been in effect for decades before February 2010.  In fact, under the wholesale arrangement all these years, the publisher set the retail price and Amazon paid 50% of that, period.  50% of the publisher's suggested selling price.

  No matter what you read about how the publisher should have the right to set the price, the publisher had always set the suggested retail price upon which the 50% they received from retailers (Amazon, B&N, etc.) was based (an average $26 at the time), and then it was up to the retailer to sell those books at whatever price worked for them, since the publisher's share was already allocated.  Sometimes there were loss leaders in the most popular books (New York Times Bestsellers) and sometimes prices were higher for books that were sold in fewer quantities.

  There is a LOT more in that Reuters article, upon which most news articles were based this weekend.

NPR Panel - a good point made
A transcript of a panel discussing the DOJ vs Apple/Big5 dynamics

  David Young, the CEO of Hachette, gets only one sentence in that transcript:

' There was no future, as I saw it, at 9.99 other than ruin. '

  Dr. James McQuivey, VP and principal analyst at Forrester Research had this to say:

  [LYNN} NEARY: If publishers price the e-book right, says McQuivey, there's a good chance they'll attract more customers.

  MCQUIVEY: And the economics of getting 10 times as many people to pay 5.99 are actually favorable. But the publishers don't want that because then it would make you think, well, wait a minute, why is the paper copy 24.99?  I'm never going to buy one of those again.  And they're just not ready for that hard switchover yet, even though they know it's coming. '

  Since publishers have been very open about their concern that Amazon's lower pricing on e-books would devalue their printed books, that seems a good point.

  On an e-book with publisher's suggested retail price of $26, for which Amazon or B&N then used to pay 50% to the publisher, the publisher and author income (if enough of the revenue was passed down to the author) would be more than they're currently getting.  The issue has been control and keeping the value of hardcover and paperback books higher.  The issue hasn't been publisher or author revenue on e-books.


Related article
  TIMELINE:  Ebook Pricing Wars - what DOJ would have seen - March 12, 2012



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Check often: Temporarily-free recently published ones
  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.

  *Click* to Return to the HOME PAGE.  Or click on the web browser's BACK button Below are ways to Share this post if you'd like others to see it.
-- The Send to Kindle button works well only on Firefox currently.

Send to Kindle

(Older posts have older Kindle model info. For latest models, see CURRENT KINDLES page. )
If interested, you can also follow my add'l blog-related news at Facebook and Twitter
Questions & feedback are welcome in the Comment areas (tho' spam is deleted). Thanks!