Amazon, get out of the e-book pricing business
Now, before I go any further, let me clarify one thing: I absolutely believe $15 is too high a price for e-books. I believe and have said many times that the publishing industry threatens to strangle the baby e-book market in its crib with everything from DRM to refusing to allow text-to-speech features in e-readers to trying to impose antiquated release windows for e-book editions, and that includes the idea that a digital copy of a book should cost $15. That said, it's time to let the market decide what it's willing to pay.Amazon is, finally, doing the right thing (albeit passive-aggressively in the extreme) by getting out of the way of publisher pricing and letting consumers decide what they'll pay for e-books. What Macmillan is asking for is the same thing the music industry eventually demanded from both Apple and Amazon: variable pricing for digital goods. Yes, Macmillan wants to price new and major titles between $12.99 and $14.99, but they're also talking about a pricing floor of $5.99. They're trying to maximize revenue on the top sellers, but also retain the flexibility to drop the prices as the market demands. That's actually how it should work.Now, you could argue that Apple launched digital music sales into the stratosphere by turning digital music into a loss leader with the 99-cent track. But in truth, we had no idea what the market was willing to pay for digital songs. That consumers snapped up those 99-cent tracks could be proof that the price was too low. The variable pricing scheme may not be as popular with buyers, but it is generating revenue for the labels, and business is all about finding that perfect balance of sales and revenue. In the digital music world, labels are testing the price elasticity of demand for their product in the reverse order it normally happens. Starting low and raising prices over time is, higher revenues notwithstanding, not the standard way of things. So, the book industry is basically saying they'd prefer to proceed in the more generally accepted capitalist format: you charge a lot up front to recoup initial marketing or R&D or production costs, and the price diminishes over time--or, as I think will be the case with e-books, you charge too much at first, figure out no one's going to buy the darn things at 15 balloons, and settle in at $9.99 within a few years. But just as it wasn't Apple's place to dictate the 99-cent price to the music industry, it's not Amazon's right to tell the publishing industry what to charge for their books. Again, seriously, I can't believe I'm saying this. But put succinctly: sometimes you've got to let people make the mistakes they're going to make, even if you know they're wrong. And if the publishers, the music industry, the film industry, and anyone else wading into digital distribution can get the mistakes--DRM, restrictive prices, idiotic release windows, and the like--out of the way up front, the market will much more quickly settle into something we can all live with. Look, Amazon's not the hero of this story, and neither was Apple. They're insisting on price points that are beneficial to them, because they've got serious business models built on moving digital media. (And it's not like Amazon is the savior of authors and the publishing industry overall, either.) But if resalers are allowed to fix the prices for entire industries, it's not good for those industries. Period. Yeah, the music industry biffed it big time by resisting digital distribution for all those years. God only knows how much revenue they lost over time (I once tried to calculate it and came up with about 100 quadrillion dollars). But we also don't know how much money they lost while their goods were being sold at an artificially low price. The point of the free market is to let the market decide what it's willing to pay for goods and services. Amazon's the money-making middleman that's actually prolonging the fight by preventing the market from doing its work. So, go crazy, Macmillan. Put up your $15 e-books. I'm probably not going to buy very many of them, because honestly, $9.99 just feels right to me. But I might be wrong, and it's about time we found out so we can all just settle down and create the future of book publishing together, OK?
iOS 4.1 offers new photo features, bug fixes
iOS 4.1 offers new photo features, bug fixes
Though music and entertainment were the of focus of Wednesday's Apple press conference in San Francisco, CEO Steve Jobs devoted a few minutes to the next release of the company's mobile operating system. iOS 4.1 will be available next week for the iPhone and iPod Touch. And in a change from previous OS updates, it will be free for iPod Touch users.Here's a summary of the new features that Jobs announced. We'll add to this list as we learn of other additions and we'll follow up with a hands-on review after next week's release.Bug fixesThese will be for the proximity sensor, Bluetooth, and iPhone 3G performance. Though Jobs didn't detail the specific problems that Apple is fixing, we've experienced the latter two issues on the iPhone 4 and previous models. In fact, Bluetooth connectivity with stereo headsets was one of the first issues we noticed with the iPhone 4 the day it went on sale. I'll be most interested to see how the update will change 3G data reception. As you'll remember, Apple's previous 4.0.1 update from July addressed only how the device displays bars on the signal meter. And that same month, Apple gave away free bumpers after customers complained about problems with the iPhone 4's antenna.#nlrText { float: right; width: 170px; padding: 5px; margin: 10px 10px 10px 0; font-family: verdana; font-size: 10px; border: 1px solid #999; background: #FFFFEF; } #nlrText h4{display: block; font-size: 1.4em; padding: 0; margin: 0; color: #900; }Apple's music eventHere's a brief rundown of what Apple announced at Wednesday's press event. iOS 4.1Free update for iPhone, iPod Touch will be available next weekiOS 4.2To come in November.New iPodsA major refresh of iPod lineup, including the Shuffle, Nano, and TouchPingNew iTunes 10 with social-networking music features Apple TVNew, smaller cloud-based Apple TV For more details on these announcements, read our summary post here.HD videoYou'll now able to upload high-definition (HD) video over Wi-Fi.TV rentalsThough iTunes has long offered movie rentals, iPhone and iPod Touch customers will now be able to rent television programs on their devices.Game CenterEver since Jobs first announced Game Center at the iOS 4.0 announcement last April, we've known that the feature was coming later in the year. And now, after five months of waiting, it's finally here. CNET's Scott Stein will take a deep dive into Game Center when it's ready.HDR photosTaking a page from the standalone camera world and from the Pro HDR app, the iPod Touch and iPhone will gain the capability to take HDR photos, which stands for high dynamic range. It's an added step that will help you get the best photos, particularly when the light may be challenging.When you tap the option on the screen, the device's cameras will take three photos in rapid succession. One image with normal exposure, another will be underexposed, and the third will be overexposed. To finish off, the devices will combine the shots into a single HDR photo. You'll find it in your photo gallery along with the normal image.As I mentioned, we'll follow up with a closer look at iOS 4.1's features when it's released next week. Until then, tell us about your favorite new addition. And if Apple missed something, let us know that, too.
Though music and entertainment were the of focus of Wednesday's Apple press conference in San Francisco, CEO Steve Jobs devoted a few minutes to the next release of the company's mobile operating system. iOS 4.1 will be available next week for the iPhone and iPod Touch. And in a change from previous OS updates, it will be free for iPod Touch users.Here's a summary of the new features that Jobs announced. We'll add to this list as we learn of other additions and we'll follow up with a hands-on review after next week's release.Bug fixesThese will be for the proximity sensor, Bluetooth, and iPhone 3G performance. Though Jobs didn't detail the specific problems that Apple is fixing, we've experienced the latter two issues on the iPhone 4 and previous models. In fact, Bluetooth connectivity with stereo headsets was one of the first issues we noticed with the iPhone 4 the day it went on sale. I'll be most interested to see how the update will change 3G data reception. As you'll remember, Apple's previous 4.0.1 update from July addressed only how the device displays bars on the signal meter. And that same month, Apple gave away free bumpers after customers complained about problems with the iPhone 4's antenna.#nlrText { float: right; width: 170px; padding: 5px; margin: 10px 10px 10px 0; font-family: verdana; font-size: 10px; border: 1px solid #999; background: #FFFFEF; } #nlrText h4{display: block; font-size: 1.4em; padding: 0; margin: 0; color: #900; }Apple's music eventHere's a brief rundown of what Apple announced at Wednesday's press event. iOS 4.1Free update for iPhone, iPod Touch will be available next weekiOS 4.2To come in November.New iPodsA major refresh of iPod lineup, including the Shuffle, Nano, and TouchPingNew iTunes 10 with social-networking music features Apple TVNew, smaller cloud-based Apple TV For more details on these announcements, read our summary post here.HD videoYou'll now able to upload high-definition (HD) video over Wi-Fi.TV rentalsThough iTunes has long offered movie rentals, iPhone and iPod Touch customers will now be able to rent television programs on their devices.Game CenterEver since Jobs first announced Game Center at the iOS 4.0 announcement last April, we've known that the feature was coming later in the year. And now, after five months of waiting, it's finally here. CNET's Scott Stein will take a deep dive into Game Center when it's ready.HDR photosTaking a page from the standalone camera world and from the Pro HDR app, the iPod Touch and iPhone will gain the capability to take HDR photos, which stands for high dynamic range. It's an added step that will help you get the best photos, particularly when the light may be challenging.When you tap the option on the screen, the device's cameras will take three photos in rapid succession. One image with normal exposure, another will be underexposed, and the third will be overexposed. To finish off, the devices will combine the shots into a single HDR photo. You'll find it in your photo gallery along with the normal image.As I mentioned, we'll follow up with a closer look at iOS 4.1's features when it's released next week. Until then, tell us about your favorite new addition. And if Apple missed something, let us know that, too.
Apple in hot water over ebook pricing
Apple in hot water over ebook pricing
The firm alleges that the agency model of pricing used by Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster is illegal price fixing, and violates various US federal and state antitrust laws.Under the agency model, publishers set prices and retailers claim a 30 per cent commission on the gross sale price. Up until last year, ebooks were sold under the wholesale model, where the publisher sold the book to the retailer outright; the retailer could then set their own prices. Paper books are still sold under the wholesale model.Apple already had an agency model in place on the iTunes app store prior to iBooks, which it launched in April 2010 with an agency model. The lawsuit, filed 9 August 2011, claims that the five publishing houses and Apple conspired to increase prices and to force Amazon to adopt the agency model, abandoning its pro-consumer discount pricing. Amazon adopted the model in March last year. The publishers had been concerned that Amazon's pricing would set expectations for lower prices that they weren't willing to meet, while Apple was worried that Amazon's freedom from the agency model and lower prices were damaging its market opportunity, according to Hagens Berman. "Apple believed that it needed to neutralise the Kindle when it entered the ebook market with its own e-reader, the iPad, and feared that one day, the Kindle might challenge the iPad by digitally distributing other media like music and movies," the firm said.The firm went on to add, "The complaint notes that Apple CEO Steve Jobs foreshadowed the simultaneous switch to agency pricing and the demise of discount pricing in an interview with The Wall Street Journal in early 2010. In the interview, he was asked why consumers would buy books through Apple at $14.99 while Amazon was selling the same book for $9.99. "The prices will be the same," he stated."The result of all of that, concludes the lawsuit, is this: "As a direct result of this anti-competitive conduct as intended by the conspiracy, the price of ebooks has soared.The price of new bestselling ebooks increased to an average of US$12 to US$15 â€" an increase of 33 to 50 per cent.The price of an ebook in many cases now approaches â€" or even exceeds â€" the price of the same book in paper even though there are almost no incremental costs to produce each additional ebook unit."Random House, which was the last publishing house to adopt the agency model, is not included in the suit.Hagens Berman also filed a class-action suit one day prior, on 8 August 2011, against the six big publishing houses, on the grounds that they are under-reporting ebook sales and are therefore underpaying authors' royalties.
The firm alleges that the agency model of pricing used by Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster is illegal price fixing, and violates various US federal and state antitrust laws.Under the agency model, publishers set prices and retailers claim a 30 per cent commission on the gross sale price. Up until last year, ebooks were sold under the wholesale model, where the publisher sold the book to the retailer outright; the retailer could then set their own prices. Paper books are still sold under the wholesale model.Apple already had an agency model in place on the iTunes app store prior to iBooks, which it launched in April 2010 with an agency model. The lawsuit, filed 9 August 2011, claims that the five publishing houses and Apple conspired to increase prices and to force Amazon to adopt the agency model, abandoning its pro-consumer discount pricing. Amazon adopted the model in March last year. The publishers had been concerned that Amazon's pricing would set expectations for lower prices that they weren't willing to meet, while Apple was worried that Amazon's freedom from the agency model and lower prices were damaging its market opportunity, according to Hagens Berman. "Apple believed that it needed to neutralise the Kindle when it entered the ebook market with its own e-reader, the iPad, and feared that one day, the Kindle might challenge the iPad by digitally distributing other media like music and movies," the firm said.The firm went on to add, "The complaint notes that Apple CEO Steve Jobs foreshadowed the simultaneous switch to agency pricing and the demise of discount pricing in an interview with The Wall Street Journal in early 2010. In the interview, he was asked why consumers would buy books through Apple at $14.99 while Amazon was selling the same book for $9.99. "The prices will be the same," he stated."The result of all of that, concludes the lawsuit, is this: "As a direct result of this anti-competitive conduct as intended by the conspiracy, the price of ebooks has soared.The price of new bestselling ebooks increased to an average of US$12 to US$15 â€" an increase of 33 to 50 per cent.The price of an ebook in many cases now approaches â€" or even exceeds â€" the price of the same book in paper even though there are almost no incremental costs to produce each additional ebook unit."Random House, which was the last publishing house to adopt the agency model, is not included in the suit.Hagens Berman also filed a class-action suit one day prior, on 8 August 2011, against the six big publishing houses, on the grounds that they are under-reporting ebook sales and are therefore underpaying authors' royalties.
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