Thursday, 12 April 2012

08:16 – The taxes are in the mail. Another year until I have to worry about that again.

The US DoJ has finally filed suit against Apple and two of the major ebook publishers. (The others had already settled.) The DoJ claims that the price-fixing by Apple and the major publishers cost consumers about $100 million in the last couple of years by pricing books $2 to $5 higher than they would have been in a competitive market. If anything, that’s probably an underestimate. Assuming that the DoJ wins, the effect on the price of indie books will be nil, and that of books from major publishers somewhat greater. Ultimately, getting rid of Apple’s “agency model” will result in lower prices overall for consumers, with essentially all of that cost reduction coming directly from the major publishers’ revenues.

As things stand now, an indie publisher prices his book at, say, $2.99. Amazon pays the indie publisher 70% of that list price, less a small charge for data transfer. For the average $2.99 book, the indie publisher is paid about $2.04 by Amazon. If the DoJ wins, the indie publisher will no longer set the selling price at $2.99. Instead, he’ll set the price to Amazon at $2.04, and Amazon will decide how much to sell the book for. Probably $2.99. So, no change there.

For books from major publishers, everything will change. As things are now under the agency model, a publisher may set the list price of one of its books at, say, $13.99. When Amazon sells a copy of that book for $13.99, it pays the publisher 35% of retail, or $4.90. (Amazon pays the 70% royalty only on books priced from $2.99 to $9.99; those priced at less than $2.99 or more than $9.99 earn only 35% royalties.) When the agency model goes away, that publisher is no longer able to set the selling price. All it can set is the wholesale price it charges Amazon for a copy. Major publishers, of course, will want to boost the wholesale price from $4.90 up into the $10 range, but that’s not going to fly. In fact, it’s quite possible that the terms of the settlement will forbid publishers from boosting prices significantly. So, if Amazon is still getting that book for the effective wholesale price of $4.90, it’s not going to price that book at $13.99. Instead, it’s more likely to price the book at maybe $6.99. That in turn puts the screws to the major publishers, who were using the $13.99 price as an umbrella to maintain high hardback prices. Not many people are going to pay Amazon’s discounted price of $20 for the hardback if they can get the ebook for $7. Hardback sales, which are what earn major publishers most or all of their profits, are going to tank even worse than they already have. And more and more traditionally-publisher authors, as they watch hardback advances and royalties continue to plummet, are going to start going the indie publishing route. Traditional publishing is already in a death spiral, and this will simply be the final nail in the coffin.

13:08 – About three weeks ago, I mentioned that I was considering replacing our Time-Warner VoIP phone service. A couple of people mentioned MagicJack. I was familiar with the name from a few years ago when I’d signed up for PhonePower VoIP service. I had an impression that I’d decided back then for good reasons that I wouldn’t consider MagicJack. So I decided to look into MagicJack again.

What I found out wasn’t good. First, the web site is incredibly tacky. Nowhere on it could I find anything about terms of service, and I looked. Nor does MagicJack offer telephone support of any kind. All you can do is contact their chat line. Which is probably fortunate, because what I read about MagicJack’s so-called support is that, incredibly, it’s actually worse than Roku’s support. Although some have found the equipment to be reliable, reports of “it just stopped working” are distressingly common. There are also numerous reports of what amounts to fraud, with MagicJack charging people’s credit cards well before the “free trial” expires, sometimes within a couple days of when they sign up. Finally, the BBB gave MagicJack an F rating, which is actually worse than Greece’s credit rating. I don’t even like to deal with companies that have B ratings, let alone an F.

Other than the fact that TWC phone service is outrageously priced, there’s no urgency. I’ll probably take my time and choose an independent VoIP company like PhonePower. It may be even be PhonePower. I suspect a lot of the problems that I had with PhonePower may have resulted from running the TA behind our router. If I do this again, I’ll stick an Ethernet hub/switch between the cable modem and the router and connect both the TA and the router to that hub/switch. I had the TA port on the router assigned to what D-Link calls the “DMZ”, which in theory is supposed to be the same as having the device in front of the router. In practice, I’m not so sure that’s the case.