The 30% Rule of Selling eBooks ~ Go Exclusive? Or Sell Everywhere?

9 February 2016

From author Donna Fasano:

Several years ago, an Amazon rep told me that selling my books via Amazon Select—going exclusive to Amazon—would greatly benefit me as an author. When I voiced some reluctance to remove my books from the reach of Nook, Kobo, iBook, and Google Book readers, he went on to explain that, as long as my earnings from other venues was at or below 30% of my total earnings, then the extra sales I would see at Amazon Select would make up for the loss.

The terms and conditions of Select have changed with the invention of Kindle Unlimited, so I don’t even know if the 30% rule still applies. I currently have 4 of my 18 self-published books in the Amazon Select Program for a second 3-month stint which will end in two weeks. The way I figure it, it’s good to try new things. However, the Kindle Edition Normalized Pages (KENP) Read have shown pretty dismal results/earnings. Before removing the 4 books from Select, I needed more sales information from the various venues where my books are available.

. . . .

The information clearly shows that, during the past 4 months, I’ve only had 1 month where Amazon Kindle sales were greater than 70%.

With the advent of Kobo’s fabulous new Promotions Tab on my Kobo Author Dashboard, I believe my Kobo sales and readership will grow. I’m still learning how the promotional campaigns work and which ones fit best for my books, but it seems that I have gotten it right 2 months out of 4. I imagine I will only become better at choosing and marketing the correct campaigns. I can tell you that during the first week of February, Kobo and Amazon are neck and neck with Kobo at 40.5% and Amazon at 43%. Also, I get a thrill when I see Kobo readers in Nigeria, Qatar, South Africa, Slovakia, Columbia, and dozens of other countries are reading my books.

Link to the rest at Donna Fasano and thanks to Al for the tip.

Here’s a link to Donna Fasano’s books. If you like an author’s post, you can show your appreciation by checking out their books.

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iBook Author templates: sameness of eBook templates limits their usefulness

26 January 2016

From Talking New Media:

The Apple eBook publishing platform iBooks Author has had its critics since its first launch, but it has also its fans. Those who work with the platform like it for the same reasons many like working with other Apple apps: it is easy to learn and consistent with other Apple programs such as Pages.

. . . .

While iBA may be easy to work with, creating a truly stunning eBook for the iPad and Mac is still a matter of the publisher’s design skills. Many of the early eBooks released looked very much like the early templates Apple supplied with the program itself. To help novice designers out, a few developers launched template apps for iBA – some free, some costing $9.99 or more.

. . . .

Are these template programs worth buying? It really all depends on your skill level as a designer, and how comfortable one feels customizing a template. The real value of these apps is for getting ideas that you can apply yourself, rather than finding a perfect template that requires no customization.

There are a couple of free template apps, which you might want to check out first before paying for others.

Templates for iBooks Author Free was just updated this month, adding 30 new templates. But all the themes here are in portrait, and a link inside the program takes you to Themes for iBooks Author, which was also recently updated, but costs $19.99, the most expensive add-on out there.

Another, Designs for iBooks Author, has not been updated since 2013.

. . . .

One thing one notices right away is that the artwork in these templates is often gorgeous – far better than the artwork many novice designers end up using. So once one deletes the placeholder graphic with the one that will be used the look of the eBook suddenly declines. The lesson is obvious: make sure you have good, high resolution artwork.

. . . .

But when examining these template apps one sees a sameness to the templates. These apps, it appears, are all designed by one hand, rather than multiple designers. That means the variation between themes is minimal, a good reason to make sure you look at all the template apps and their screenshots rather than just one or two.

In the end, the two most important things about working with iBooks Author is feeling comfortable customizing templates yourself, and stealing borrowing ideas.

Link to the rest at Talking New Media

The Authors United Amicus Brief from an Antitrust Law Perspective

6 December 2015

From law student Randy at History and Technology:

Apple has appealed the 2nd Circuit’s decision in UNITED STATES v. APPLE. They’ve petitioned for a writ of certiorari to the U.S. Supreme Court. In other words, the Supreme Court is still deciding whether they’re going to take the case or not. The Authors Guild and Authors United hired a New York law firm to file an amicus brief with the Supreme Court in support of Apple’s actions.

. . . .

I’d like to start by getting at the heart of the 2nd Circuit’s holding in UNITED STATES v. APPLE. When Apple decided to enter the ebook market, they made a series of agreements with 5 of the Big 6 publishers (Random House didn’t make an agreement) that ultimately caused these 5 publishers to impose new terms on Amazon. This had the effect of raising the prices of ebooks and allowed Apple to enter the market making a profit on every sale instead of taking a hit (which Amazon was doing). The 2nd Circuit had to decide whether the agreements between Apple and the publishers were vertical agreements or horizontal agreements because they have a different standard of review. The 2nd Circuit found these agreements to be horizontal agreements which makes them a per se violation of the Sherman Act.

. . . .

In very basic terms, the 2nd Circuit found that Apple’s agreements with the publishers were a “hub and spoke” agreement that includes both vertical and horizontal agreements. Their agreements effectively imposed a vertical agreement between Apple and each publisher individually and a horizontal agreement between the 5 publishers. Apple was the “hub” and the publishers were the “spokes.” This has been found to be a per se violation of the Sherman Act in the 3rd and 7th Circuits because “hub and spoke” agreements have both vertical and horizontal elements.

. . . .

Let me start by saying that you can read the entire AU amicus brief here. The entire brief is 38 pages and cites 8 cases. It does not include the word “vertical” or “horizontal” anywhere in the document. The brief instead relies on questionable facts (they cite Scott Turow articles several times) and a shaky legal argument that doesn’t even include an analysis of vertical or horizontal agreements. Let’s start with their argument for applying the rule of reason standard.

The brief starts off by noting that the rule of reason is the default standard for analyzing agreements under antitrust law. I agree with this idea and the Supreme Court has said the same. The brief then goes on to say that the 2nd Circuit ignored precedent and “the Second Circuit ignored this court’s unwavering instruction that per se rules should not apply to conduct with potentially procompetitive effects.” They cite LEEGIN CREATIVE LEATHER PRODS. v. PSKS, INC.. I disagree with this point. The court’s “unwavering instruction” is that “horizontal agreements among competitors to fix prices” are per se illegal. If such an agreement exists, and I believe that it does here, we don’t analyze the procompetitive effects of the agreement because it’s already automatically illegal.

. . . .

A. Douglas Melamed (Principal Deputy Assistant Attorney General for the Antitrust Division of the DOJ) gave this address to the American Bar Association. Here are a few quotes I find helpful:

“Although vertical agreements are generally procompetitive, they can injure competition, under some circumstances, when they deny (or raise the cost of) a needed or valuable input — such as distribution services — to a rival.”

“Exclusionary vertical agreements are agreements that tend to exclude competitors of one of the parties to the agreement. Examples include exclusive dealing, tie-in arrangements, and most favored nation agreements.”

“The foregoing suggests that a necessary condition for an exclusionary vertical agreement to be anticompetitive is that the agreement is likely to enable the manufacturer that would benefit from the exclusion of a rival to gain or preserve market power that it otherwise would not have. The additional market power enables the manufacturer to recoup its investment in the otherwise inefficient restraint, including the consideration it must pay to the distributors.”

The second quote is applicable because the agreements between Apple and the publishers included a most favored nations clause. The third quote applies directly to this situation. Apple gained market share that it otherwise would not have had but for the terms that the publishers imposed on Amazon.

. . . .

The AU brief also claims that allowing Amazon to have monopoly control over the ebook market is at odds with the 1st Amendment. The brief claims “Amazon’s dominant market position… threatened the free exchange of ideas which this country values so highly.” The brief goes on to argue that Amazon “suppressed” both Macmillan and Hachette. Throughout this entire section of their argument, AU cites no case law, with the exception of the first paragraph. Their argument also implies that the 1st Amendment pretty much mandates the continued existence of publishers since they fund nonfiction, academic research. Their first paragraph contains three cherry picked quotes from two cases. I’d like to look at those.

. . . .

The most amusing part of the AU’s 1st Amendment argument is as follows: “[f]ortunately, when Apple and others entered the e-book market, Amazon’s control over culture decreased. E-books not sold on Amazon were available elsewhere. E-books not marketed by Amazon were marketed elsewhere.”

They’re actually arguing that:

1. Amazon was violating the public’s 1st Amendment right to be able to purchase e-books through multiple channels.

2. Apple’s illegal price-fixing scheme with the publishers corrected this 1st Amendment violation so their illegal agreements were ok.

I’m not even sure how to respond to that. It’s ridiculous. Apple wanted to enter the market making money and illegally forced the market to change to accommodate higher prices. They weren’t courageously protecting the public from a continued 1st Amendment violation.

Link to the rest at History and Technology

Authors Guild Files Brief Affirming Benefits of Competitive E-book Economy

3 December 2015

From The Authors Guild:

The Authors Guild, the nation’s largest and oldest society of professional writers, discussed the benefits of competitive e-book pricing in a friend-of-the-court brief filed today with the Supreme Court of the United States.

The brief, filed jointly by the Authors Guild, Authors United, the American Booksellers Association, and Barnes & Noble, bolsters ongoing advocacy efforts by the Authors Guild and Authors United and asks the Supreme Court to review a decision by the Second Circuit Court of Appeals in U.S. v. Apple, which found that Apple violated antitrust law by coordinating with major U.S. book publishers to influence the price of e-books. In the brief, the author and book industry groups argued that the government’s focus on Apple’s allegedly anti-competitive activities was misplaced, because Apple’s conduct, in fact, enhanced competition by increasing e-book output, the number of e-book titles, and the number of e-book distributors, which led to technological improvements in the e-book market and enhanced freedom of expression and access to e-books.

In U.S. v. Apple, the Department of Justice brought a lawsuit maintaining that the publishers and Apple—by striking a coordinated deal to establish agency pricing for e-books—exhibited anticompetitive conduct by conspiring to fix prices. The publishers and Apple, on the other hand, maintained that Apple’s entry into the market actually increased competition, as demonstrated by the fall of Amazon’s market share from 90% in 2010 to around 60% two years later. After a 20-day trial in summer 2013, the trial court found that Apple colluded with the publishers to drive the price of e-books above the $9.99 favored by Amazon. The Second Circuit upheld that decision.

. . . .

In the brief submitted today, the groups sought to highlight the procompetitive impact of Apple’s conduct and the damaging effect on e-book publishing as well as the future of authorship that occurs when e-book distribution is in the hands of a single company. Attorneys with Kirkland & Ellis in New York and Washington, D.C. filed the amicus brief. “Absent correction,” they wrote in the brief, “the lower court’s wooden approach threatens to undermine the very objective of antitrust law—to ensure robust competition.”

“We authors feel strongly that diversity, competition, and the free flow of ideas are key to a healthy marketplace of books,” said Douglas Preston, founder of Authors United. “The numbers unequivocally show that Apple’s entry into the e-book market increased competition and gave authors and publishers greater choice in how content was delivered to the reading public.”

Link to the rest at The Authors Guild and thanks to Joshua for the tip.

PG says The Authors Guild has been making some noise about helping authors avoid the terrible contracts Big Publishing requires of them. Unfortunately, this amicus brief shows where AG’s real sympathies lie.

The actions of The Price-Fix Six could not have been more clearly illegal under US antitrust law. As PG mentioned during the trial, the facts of the lawsuit against Apple and five of the six largest publishers in the US would never have been used as the basis of a question on a law school antitrust exam because the violations were so obvious. A second year law student would instantly recognize them.

The “We broke the law because we wanted more competition” argument is as lame as it sounds. Amazon is permitted to gain a large share of the ebook market if it does so by providing good products and services at lower prices. Antitrust law exists to protect consumers and competition, not any particular group of competitors.

For all his virtues, Steve Jobs didn’t want to compete on price. That wasn’t (and isn’t) the Apple Way. Apple was coming to the ebook market late and didn’t want to deal with a company like Amazon who was all about low prices. Since Big Publishing didn’t like low prices either, Apple found ready allies in a plan to push the prices of ebooks up and keep them up.

Voila! Illegal price fixing.

The suit against the Price-Fix Six was brought by the US Department of Justice antitrust division. However, private antitrust suits are permitted and even encouraged under antitrust law by an automatic trebling of damages paid to a successful plaintiff. While Big Publishing has tried and failed to interest the DOJ in filing suit against Amazon, if Big Publishing really believes Amazon has violated antitrust laws, they can file that suit themselves.

Antitrust litigation is not cheap, but the big international media conglomerates that own all the big publishers have deep financial pockets. The fact that no private antitrust action has been filed is a huge indication, for PG at least, that Big Publishing’s lawyers are telling their clients that Amazon would win such a suit.

Here’s How Much Amazon’s Dis Will Cost Apple and Google

15 November 2015

From The Motley Fool: recently kicked Apple‘s  digital streaming box, along with Alphabet‘s Google Chromecast streaming stick, out of its online store.

The move comes right when all three companies have updated their streaming devices just before the critical holiday sales season. It’s a clear attempt for the online retailer to increase sales for its own Fire TV and Fire TV stick products at the expense of Apple TV and Google’s low-cost USB-dongle media player.

It’s not an unprecedented move, but it’s a rare one for Amazon, which is staying in business with its two rivals for other products — even tablets where iPad and Nexus devices compete with its Kindles. Even though Amazon is firing this shot, one could argue that the war was started by Apple and Google, since neither Chromecast nor Apple TV offers Amazon’s Prime Video app.

. . . .

“Over the last three years, Prime Video has become an important part of Prime,” Amazon said in the email. “It’s important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion.”

. . . .

In the short term, the loss in sales barely impacts Amazon’s bottom line, but hurting its relationship with the major companies could come back to bite it with consumers.

“This has the potential to hurt Amazon as much as it does Apple and Google,” Barbara Kraus, an analyst at Parks Associates, told Bloomberg. “As a retailer, I want to give people a reason to come to me. When I take out best-selling brands, I take away those reasons.”

While its logic is sound, when it comes to Apple TV and Chromecast, Amazon is also taking a risk by pursuing this strategy.

“Fewer than 20% of Amazon customers are Prime members,” Wedbush Securities Analayst Michael Pachter told Bloomberg. “What about the 80% who want an Apple TV to stream Netflix? I think that the excuse of avoiding customer confusion is a not-so-veiled attempt to favor Amazon first-party products over third-party products, and think it was a bad move.”

Link to the rest at The Motley Fool

Apple Thinks It Can Win This Case at the Supreme Court

5 November 2015

From Fortune:

It’s no accident that the petition Apple submitted to the Supreme Court last week begins with a reference to Leegin Creative Leather Products, a manufacturer of fancy cowboy belts. Or that the case known as Leegin v. PSKS comes up 81 times in the 250-page document.

Apple’s appeal rises or falls on Leegin. And Leegin, it turns out, is a precedent this Supreme Court knows well.

Seven of the nine justices who would hear Apple’s appeal were sitting on the high court in 2007 when Leegin was decided. And five of them saw things Apple’s way—or so the company believes.

Leegin raises the question at the heart of Apple’s antitrust defense: Whether the actions of a vertical player in a price-fixing conspiracy must be judged by the same antitrust rules that govern the activities of horizontal players who, by law, are supposed to compete with one another.

. . . .

“Leegin, a manufacturer of leather apparel, concluded that its interests would be best served by opting out of a price war ‘race to the bottom,’ focusing instead on quality and brand cachet. Accordingly, with specific exceptions, it decided to refuse sale to retailers if they intended to discount its products below their recommended retail price. Five years after this policy was introduced, Leegin discovered that Kay’s Kloset was violating the policy by marking down the Leegin products by 20%. When Kay’s refused to comply with Leegin’s policy, Leegin cut them off. PSKS, the parent company of Kay’s, sued charging that Leegin had violated antitrust laws when it entered into ‘agreements with retailers to charge only those prices fixed by Leegin.’”

. . . .

It’s not a perfect fit. Leegin was a manufacturer cutting deals with retailers. Apple was an e-book distributor, negotiating contracts with publishers. Leegin was well-established in the leather-goods trade. In the e-books market, Apple was a new entrant.

But in both cases federal judges rejected the defense that their respective deals were procompetitive, given market conditions. Their actions were found illegal per se—on the face of it. No ifs, ands, or buts.

In Leegin, the Department of Justice and the Federal Trade Commission recommended replacing the per se rule with the rule of reason, a legal framework that takes market conditions into account. The Supreme Court agreed.

Link to the rest at Fortune and thanks to JR for the tip.

Apple spins impressive narrative of success, but are there holes in the story?

4 November 2015

From The Guardian:

Like clockwork Apple announced their quarterly results on Tuesday and Tim Cook spun out his narrative of Apple’s ever-increasing, ever-impressive numbers. And as usual the market responded by largely agreeing that the skies are bright in Apple’s land. Analysts have declared that the high-flying stock is still undervalued, making it feel like there’s an indefinite upside ahead.

But there are some interesting auguries in this latest set of numbers – details from Cook’s narrative that Apple aren’t emphasizing, that make one wonder if that’s really true. What if instead of standing on the precipice of ever larger successes, we are instead standing at Peak Apple right now? And might that actually be a good thing?

. . . .

Apple is the most profitable company on the planet today, and growing at about 30% annually – with numbers like those, who could see anything wrong?

Well, there are signs, if you are interested in looking for them. The numbers this quarter look great, but the number of iPhones sold actually fell short of the street’s projections. That doesn’t sound so terrible, except that for a number of years Apple has beaten the street’s numbers, sometimes by a shockingly large amount. Apple doesn’t usually simply make its numbers – it exceeds them, and when the question is trends, that matters.

Exacerbating this is that Apple has, through success, effectively become a one-product company. iPhone sales dwarf the rest of its offerings, to a distorting degree – the revenue Apple makes from everything that isn’t an iPhone is easily outweighed by that one device.

. . . .

Apple traditionally breaks out its Mac, iPad and iPhone sales. It used to break out the iPod, but it effectively cannibalized that business with the iPhone, and it no longer breaks them out – it made that change last year. It instead created an “Other” category, which is where the Apple Watch currently lives as well – it means we don’t really know how Apple’s chronometer is doing, but if the news was truly fantastic we’d be hearing about it … and very little was said at the last quarterly phone call.

The iPad is a device Apple probably wishes it had an excuse to hide numbers on as well – it has been shrinking year-over-year for quite some time. Apple’s language on the iPad has evolved – once spoken of as the post-PC device that would change the nature of computing forever, now that it has been selling less and less of them this kind of revolutionary rhetoric has vanished. With Macs holding steady as a beloved niche product at around 10% of their income, it’s notable that services, such as the App Store and Apple Pay, made almost as much for Apple as selling Macs did this last quarter.

. . . .

We now know the iPad wasn’t the next device that changes everything, and increasingly the Apple Watch looks like a similar product – something nice to have, a signifier of disposable wealth and social status, but not necessary in the way that a phone and a laptop still are. If Apple’s second-largest growth area is services, it reminds one of a different company in an earlier time – much of Microsoft’s empire was built out of services. That’s like not what Apple is today, but when much of the company’s energy is spent chasing an initiative such as Apple Music, which has no real innovation behind it but leverages size and marketing to recreate something that already exists … well, it doesn’t feel like the Apple we’ve known. 

Link to the rest at The Guardian and thanks to Julia for the tip.

Why Apple took its e-book fight to the Supreme Court

31 October 2015

From Fortune:

Having maintained its innocence throughout the federal district court trial, which it lost, and in the appeal, which it lost in a split decision, it should surprise no one that Apple is taking its e-book antitrust case to the highest court in the land.

Accompanying Thursday’s 250-page petition was a brief statement to the press:

“When Apple launched the iBooks Store in 2010, we brought choice to consumers and innovation to ebooks. We have always acted in the best interest of customers and content creators of all sizes. We did nothing wrong, and stand by our principles. At this point, our only recourse is to take this to the Supreme Court.”

 There’s no guarantee the Supreme Court will hear the case. And with two strikes against it, the odds of a favorable outcome for Apple are steep.

But that may not matter to Tim Cook and company.

With its war chest of cash, Apple can afford to wage quixotic fights. Especially if they are fights Steve Jobs started. Especially if a large segment of its customer base is inclined to see the case its way.

This is Apple “thinking different” to the bitter end.

Link to the rest at Fortune

For the benefit of those who may not have been visiting TPV during the extended legal battle of Apple and five major New York publishers against Justice Department antitrust charges, this was not a close case, just plain old price-fixing which has been illegal in the US since the passage of The Sherman Antitrust Act in 1890.

Apple may be sophisticated in product design and marketing, but it, and the big publishers involved, were crude and stupid when it came to violating antitrust law.

Apple is turning iOS into an iTunes-like mess

28 October 2015

From ZDNet:

[W]hile Apple can still come up with innovative new features for its mobile platform, it’s not able to integrate these into the platform in such a way as to make them visible to the end user.

Wi-Fi Assist – a feature that switches your iDevice to using your cellular data plan if you happen to be in a spot where Wi-Fi coverage is poor – is one such feature. The only reference to this feature is buried at the bottom on an obscure page under Settings in such a way that only the informed or highly determined will find it.

If you want to find it, you have to take a trip to Settings > Cellular (called Mobile Data in some regions) and then scroll to the bottom of a very long page. Oh, and the default for this feature is on, so when you’re inhabiting spots with poor Wi-Fi, your iPhone or iPad is burning through your data plan.

And this is only one of hundreds of features that are buried behind a thick, near-impenetrable wall of menus and options in iOS.

. . . .

I remember when iTunes was a sleek and simple music player, but over the years it’s had so many new features thoughtlessly bolted onto it that it’s not a long-winded, tortuous muddle.

Unless Apple gets a better grip on how features are added to iOS, this is the future that awaits iPhone and iPad users. And the slip-slide into chaos is already on the way. You can’t just keep on bolting new features into the OS and then scatter those settings far and wide throughout the settings app without creating a usability timebomb that’s will one day explode in the face of the users.

Apple clearly knows that there’s a discoverability problem because in iOS 9 it made the options within the Settings app searchable, but that’s only any good if you know what you’re searching for. That’s not going to be any good to you in tracking down why your iPhone or iPad is burning through more cellular data since you upgraded to iOS 9.

Link to the rest at ZDNet and thanks to Julia for the tip.

Apple Music, iTunes Movies and iBooks finally land in China, days after release of iPhone 6S, 6S Plus

1 October 2015

From the South China Morning Post:

Apple has launched Apple Music along with iTunes Movies and iBooks in China and said the cloud-based music streaming service will roll out on Android phones this fall.

Apple will offer Apple Music subscribers access to a vast library of songs for 10 yuan (US$1.57) a month after an initial three-month trial membership, the company said in a statement.

. . . .

Movies on iTunes will start at 5 yuan for renting in high definition and 18 yuan for buying new releases in high definition, the company said.

Paid iBooks will start at 0.5 yuan.

Link to the rest at South China Morning Post and thanks to Michael for the tip.

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