Sorry for what follows, and for returning so late- long, bad day.
How is this relevant to what I wrote?
People are finding online shopping cheap and convenient. Both with regards to paper books and ebooks. You would expect some brick and mortar stores to disappear. This is a normal and desirable outcome. The alternative is keeping employees and businesses around doing make-work.
Obvious, I would think: fewer retail outlets means less competition for Amazon on both sales to the public AND purchases from publishers.
And even in a major population center like Dallas/Fort Worth, I can feel the effects. I'm pursuing degree #4 and, so far, many of the required books have been available only through Amazon. There is no competition. As a result, when Amazon decides to take its sweet time, I have no remedy like going to another bookstore to get it, regardless of price. Worst so far: despite ordering the main textbook a week before the first session, it did not arrive until the week before the final exam. The professor was forced to spend his money to supply us with photocopies of the relevant text to keep things moving. That simply didn't happen when there were 6 national B&M bookstore chains AND the bookstores near the various school campuses also stocked a wide variety of textbooks (often for more than one school).
In addition, even though, by now, I'm used to shelling out the occasional $200-500 for individual small print run academic textbooks, the number of books I've had to buy in that price range has increased as competition has decreased.
And as the articles pointed out, the retailers have repeatedly talked about the loss of bargaining power as the number of outlets decrease.
Cite?
At least you now agree that, contrary to your earlier claim, new comic book publishers have indeed entered and stayed in the market. Wasn't the whole point to get rid of all competition to achieve monopoly pricing? Even if Marvel and DC weren't competing companies - which they are - they still wouldn't have succeeded.
I think you need to look elsewhere to explain Marvel and DCs dominance.
And you still haven't explained how consumers suffered. (Provided you even care.)
Cite? It's pretty common knowledge within the industry:
An Open Letter to Independent Comic Book Distributors Dreamchilde’s Weblog
Eclipse Comics | CO2 COMICS BLOG
Both companies have always employed the ultimate biblical equalizer, the flood, when they found it necessary. The advent of the Direct Market has made the flood an even more effective tool since it has established what amounts to be a captive audience with limited spending resources. Whenever Marvel or DC have detected a threat to their market share, either one or both have simply increased their output and financially drowned their competition.
Independent Publishers | CO2 COMICS BLOG
Which includes this about how they could manipulate what reached stores on the production side:
In the 1980′s when independent publishers began producing comics on paper grades that were more expensive than traditional newsprint it was not because they necessarily wanted to. By that point in history World Color Press was the only game in town and publishers had to line up for a coveted place on their print schedule that was dominated by product produced by Marvel and DC who could squeeze competition off the presses simply by increasing their line of comics. This practice of manipulating the instigated a lawsuit by First Comics in 1984 siting anti-competitive practices.
(First Comics won parts but also lost parts in that litigation, mainly because they were not completely honest in their own business practices.)
Consumers suffer in terms of price and the availability of non-Marvel or non-DC product. How would Image have done had they not been forced to pay more materials costs to make their comics? How would Valiant & Dark Horse have done if their products not been relegated to "whatever space is left" on the magazine racks?
And those were companies that SURVIVED. Pacific, First, and a host of others simply didn't.
And how do the consumers suffer? Are they not free to choose?
Choice between all of Coke's or Pepsi's products...ONLY...is not a truly competitive market in the economic sense. Consumer choice is so constrained as to be essentially meaningless.
I also note that, once again, you achieve your «monopoly» by grouping two rival corporations and completely disregarding smaller competitors. I don't think that word means what you think it does...
Oligopolies and monopolies are equally damaging to the consumer. The only difference is that a monopoly has only one company dominating core comprising the whole market, whereas an oligopoly has "two or more". In economics, monopolies and duopolies are just considered subsets of oligopolies that warrant a special name. They still function the same.
Except that the cross-subdidized sales cannibalized the sales of the same books at other retailers (as the publishers themselves point out in both of those stories), ...
How is this relevant? Your claim was that the publisher was unable to charge higher prices.
EDC, the dead tree publisher “will no longer sell any of its books on Amazon or to any entities that resell to Amazon” (cite Educational Development Corporation: EDC News ) . IPG, which I was primarily talking about in the above quote, chose not to make a deal with Amazon and Amazon no longer sells its titles.
A publisher cannot set a higher price if there is no outlet for him in which to set a higher price. IPG is being severely hurt by Amazon's anticompetitive stance. EDC is still doing OK, but as their own president pointed out, they are still getting revenues from Amazon due to product they had already put into their distribution network one way or another. How well they will do after a few more months will tell the tale. But having lost as many retail outlets as they had because of Amazon's pricing, it may well be the sequel to IPG's story.
(And «classic monopsonistic predatory pricing»? There's no such thing.)
There is- this very kind of practice is mentioned a few places legal journals and cases.
Monopsony
http://digitalcommons.law.yale.edu/...="automobile manufacturer monopsony behavior"
http://digitalcommons.law.seattleu....n automobile manufacturer monopsony behavior"
See also United States v. Colgate & Co.
What is an «artificially low price»?
http://spruce.flint.umich.edu/~mjperry/Unit4.html
Whenever a price is maintained at below market clearing level, it is artificially low. The example given in the link refers to government subsidies.
However, a private retailer cross subsidizing a low price on a product with profits from others- especially for long periods of time or for extremely low prices- provides the same effect.
If Amazon thinks a greater market share will get it greater profits in the long run, it makes sense to sacrifice some profit now. There's nothing «artificial» about that. It's not much different from, say, spending money on customer service. And every competitor is free to try the same thing.
Sacrificing profits for greater market share is not illegal. Sacrificing profits to drive competitors from the market, though, is. Key, though, is that the burden of proof is upon those making the allegation.
Publishers are complaining because they want higher prices. But there is no coercion here. If they want higher prices they are free to charge higher prices.
Publishers are complaining because they want a SUSTAINABLE price that will let them continue to operate as full-service publishing companies. They can't set that price with Amazon continually driving their non-Amazon outlets out of business.
Instead of admitting that, you've moved the goalpost, and seem to actually be demanding that IPG's sales should remain exactly the same even though their prices are up and they refuse to cut a deal with a large popular outlet. It's simply absurd.
No goalpost has been moved. They refused because the price demanded by Amazon was not sustainable. They did NOT raise their prices during or post their squabble with Amazon.
Oh, please. Now you're bringing US welfare politics into it... If the rules for welfare programs don't work, the solution is to change those rules, not singling out certain businesses for attack.
Nope, I'm bringing all economic costs of the product into it.
Believe it or not, we don't pay full cost for a lot of things when we pay for them. Take plastics, for instance. Many of them in the past were exceedingly cheap...but one reason for this was that the manufacturers used production processes that released high levels of pollutants into the environment. Those costs were initially allocated to our healthcare system and cleanups by the government. When the costs of using cleaner processes were folded back into the manufacturing costs via anti-pollution legislation, the costs of those products rose. That's because more of the relevant real economic costs were being included in the price, and the users were paying it instead of non-users.
Wal-Mart is doing the exact same thing with labor costs.
Untrue. You've admitted as much yourself.
Show me where. I said that there were several waves of major indie comic companies that got into the market. Most are gone, some were bought out by Marvel or DC, and a few limp on as "fringe competitors" those companies in an oligopolistic market that have no real control, generally following the lead of the market dominators.
Predatory pricing is an amazing thing, and there's a reason it's illegal.
What reason do you think that is? Or are you just using a variant of the appeal to law fallacy? («The law says X. Politicians would never ever make a mistake, so X must be correct.»)
But, there is indeed a reason why so-called «predatory pricing» is illegal. It's part ignorance among politicians, and part clever manipulation by businesses that can't compete fairly.
No, it's illegal because economists demonstrated that it is a harm to consumers in the long run.
Louis Phlips suggests that the necessary conditions for predatory pricing are:
1 The aggressor is a multimarket firm (possibly a multiproduct firm).
2 The predator attacks after entry has occurred in one of its markets.
3 The attack takes the form of a price cut in one of the predator's markets, which brings this price below a current non-cooperative Nash equilibrium price at which the entry value is positive for the entrant (possibly below a discriminatory current Nash equilibrium price with the same property).
4 The price cut makes the entry value negative (in present value terms) in the market in which predation occurs.
5 Yet the victim is not sure that the price cut is predatory. The price cut could be interpreted by the entrant as implying that its entry value is negative under normal competition. In other words, the victim entertains the possibility that there is no room for it in the market under competitive conditions.
Here's a pair of nice, dry economics papers on it:
http://www.cepr.org/meets/wkcn/6/6691/papers/DoraszelskiFinal-P.pdf
http://www0.gsb.columbia.edu/faculty/pbolton/PDFS/BBRPrincetonDP.pdf
“Dinged along the road”? Sounds to me like they got to have their cake and eat it too, if Saudi Arabia picked up the slack. That might make sense if Saudi Arabia was using OPEC as a political tool, but not so much if they just wanted profits.
Like I said (and you pretended not to notice), OPEC is a government-run organization. Many of OPEC's decisions were based on politics, not economics.
OPEC is not government run, it is a cartel consisting of oil-producing states for the purpose of controlling oil prices (and just because a cartel is operating at the level of nations doesn't make it any less an oligopoly). And for most of its history, it's done just that.
As for the “price manipulation”, OPECs main (failed) goal has been to maintain a stable price.
OPECs goal is to control oil prices at a level it wants for a variety of reason. In the 1970s, their embargo against countries that supported Israel caused a fourfold increase in price.
They have also raised or lowered prices when member nations broke step with the plan, depending on the reasons for doing so. For nations that cheated to get money for necessities, OPEC (mostly the Saudis) reduced production. For those that merely cheated for market share, the response was (Saudis) flooding the market with oil to lower the price to reduce the reward for cheating, such as in 1986.
I'd call this the appeal to law fallacy again, but you actually admit that Microsoft was not deemed a monopoly! I guess in your world-view, an accusation is proof enough.
As for the law, the only reason Microsoft could even come close to being called a monopoly was by defining the “market” extremely narrowly.
Look up US v Microsoft. Microsoft was found to be a monopoly in Federal Court, on a host of grounds and ordered Microsoft be broken up (here's the findings of fact)
U.S. v. Microsoft: Court's Findings of Fact
However, due to judicial misconduct in the case, the Appellate Court remanded the case. The DOJ decided not to pursue breaking up Microsoft. Eventually, Microsoft avoided a legal finding of monopoly- and the statutory penalties that could be levied- by settling out of court, which included revising clauses in Microsoft's contracts with PC makers that limited their ability to use non-Microsoft software.
(John R. Wilke ("Microsoft Drafts Settlement Proposal, Hoping to Resolve Antitrust Lawsuit". The Wall Street Journal, September 2001)
I was talking about Linux. You know, one of Microsoft competitors, disproving the silly claim that Microsoft has or had total control of the market. And then you bring in Apple, another powerful Microsoft competitor, illustrating further that Microsoft neither had nor has a monopoly.
In 2007, Linux had just under 13% of the desktop market.
Mac is currently running around 14%.
Apple is the big dog in mobile computing, but Windows-based computers are a different story.
Those are competing companies. The words you're throwing around have no real meaning when any arbitrary selection of competing companies can be declared to be a unified group.
The concept of collusive competitors in an oligopoly or oligopsony is hardly alien. In fact, some oligopsony models predict such collusion as a precursor to successfully exercising oligopoly/oligopsony power.
GM's typical tactic was this: find an auto-parts maker capable of meeting it's needs for a particular design and make a contract with them. Because of their size, they would get a bulk discount...while simultaneously making the producer devote 90% pluss of capacity to meeting the contract due to its sheer size. The industry standard was that the auto maker would then have 60 days to pay. The deadline would pass without payment by GM. When the parts maker complained because they had no income and almost no other jobs, GM would offer the maker a cash settlement of, perhaps 65-75% of what they owed (effectively getting GM a further discount). This would be enough to keep the parts maker in business, but not give them enough money to expand their physical plant or increase wages. Then they had the choice of retooling their shop to satisfy other customers or keep doing business with GM.
Of course, the other major car companies were doing the exact same thing.
What you're describing is fraud. And I think it's largely a fabricated conspiracy theory that makes very little economic sense for the companies involved.
This is classic oligopsony behavior, and is not a conspiracy theory. I had to study it in the 1980s under Walter Adams (noted antitrust economist) & others- I doubt they were lying to me.
You really don't get that when car production drops or ends, so does the production of car parts?
You really don't understand the point I was making- namely that they had no power in their negotiations. Because of the pattern of chronic underpayment to their businesses in question were entirely dependent upon the local manufacturers. They could not expand their capacity enough to the point of being able to supply to other car makers, or even to produce non-auto part products. They were irrevocably linked to the automakers' fortunes.
There are no official figures but industry sources say that in the past year, Amazon's share of the North American ebook market has fallen from around 80% to 60%. Apple's struggle to defeat Amazon set to be exposed by European ebook inquiry | Books | The Observer
So, Amazon's market share is not 80%, and falling rapidly. How very peculiar. It's almost as if this “unstoppable monopolist” conspiracy theory isn't true, isn't it?
Hmm...differing numbers from contemporaneous sources. Only time will tell.
