Publishing/Writing: Insights, News, Intrigue

05/21/2013

Re Publishing: Single Platform Domination – Risk or Not?


Is the Kindle a challenge to book publishers?

Many print publishing business executives, authors, literary agents, editors, booksellers and distributors – as well as their counterparts in the digital publishing business – recently sat down at a roundtable to launch this year’s Financial Times and Goldman Sachs Business Book of the Year Award.

Purpose of the roundtable? To plot a publishing industry survival story! (Which begs the question: Do we even need one?)

Even within this inner circle of professionals there is disagreement (and total misinterpretation on the part of some) of what the changing publishing landscape actually means.

Do the churning changes spell disaster or opportunity?

The title of this post was suggested by a fear expressed by Victoria Barnsley, chief executive of HarperCollins UK. She feels that “single platform domination” will be bad for the publishing industry.

Doesn’t she realize that ‘print’ was the single platform domination for the past 500 plus years! And that we are just recently being offered a choice of venues?

This piece by Robert Budden in The Financial Times dot com allows us into the roundtable and the minds of the attendees:

 

Publishing industry roundtable plots a survival story

Serial entrepreneur and Financial Times columnist Luke Johnson could be excused for having a pessimistic outlook on the publishing sector, having “lost a fortune” following his purchase of the UK arm of Borders, the book chain in 2007.

At a roundtable discussion to launch this year’s Financial Times and Goldman Sachs Business Book of the Year Award, the co-founder of private equity firm Risk Capital Partners says he “passionately” hopes books continue to prosper.

But, in references to GoogleAmazon and Apple, he warns that software “has become a very serious threat that may well eat” the publishing business.

Victoria Barnsley, chief executive of HarperCollins UK, probably speaks for many publishing executives when she highlights “single platform domination” as “the risk”. “I don’t think it was good for the record industry nor will it be good for publishing,” she says.

The conundrum for publishers is what to do about it.

Tim Harford, an author and also an FT columnist, says the industry needs to take action swiftly, especially in relation to the digital rights management (DRM) approaches of some ebook distributors that lock readers into their ecosystems.

“If you let Amazon and Apple lock in their devices, they are going to slaughter all of you,” he says, referring to book publishers and retailers.

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09/10/2012

DOJ’s E-Book Price-Fixing Case = Publishing Intrigue to the Max


 

Blind Justice

Intrigue, indeed — But, is the whole case based upon misconceived intentions, misunderstanding and misplaced justice?

And, just WHO is to blame for letting this price-fixing debacle spawn into a full-blown clusterfuck?

This insight is provided by Jonathan Berr in InvestorPlace.com :

Publishers Have Themselves to Blame for Amazon’s Triumph

The recent ebook price-fixing settlement clearly proves it

Amazon (NASDAQ:AMZN) CEO Jeff Bezos has won the e-book price wars and will leave his competitors in the dust. The publishers that are complaining now have no one but themselves to blame.

Last week, U.S. District Judge Denise Cote approved a settlement between three U.S. publishers — Hachette Book Group, Simon & Schuster and HarperCollins —and the Department of Justice over allegations that they were in cahoots with Apple (NASDAQ:AAPL) to fix the prices of e-books. Apple and two other publishers, Penguin Group USA and Macmillan, have refused to settle. Their case will go to trial next summer. Officials in the publishing industry, who urged Cote to throw the case against them out of court, were appalled by the ruling.

“To say the least, we are colossally disappointed that the judge failed to understand how consumers will be negatively impacted by a decision that does not take into account the realities of the book business in 2012,” said Oren Teicher, CEO of the American Booksellers Association, in a statement posted on the group’s website.

Indeed, the publishing industry argues that it — not Amazon — is the aggrieved party given the Seattle-based company’s dominant position in the e-book market by selling electronic books below cost. Though their fears were understandable, their solution to it was illegal. It’s not even a close call.

Both Apple and the publishers didn’t want to compete with Amazon’s $9.99 price point for e-books. In 2010, they agreed to switch to a new “agency” model whereby publishers would sell titles directly to the public as opposed to the “wholesale” model, in which electronic books were sold to retailers. Agreements between Apple and the publishers were in place ahead of the 2010 launch of the iPad.

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04/24/2012

Digging Further Into the Intrigue RE the DOJ Investigation of the Big Six Publishers


Looking Into DOJ Intrigue

Have you ever asked yourself the question “If the DOJ had evidence against the big publishing houses, why didn’t they indict them criminally instead of just civilly?”

Hmmmm.  

Well, according to a former prosecutor for the DOJ, they could have prosecuted them criminally (seems he had prosecuted successfully on less evidence).

Could it be that some white-collar crimes are treated differently than others due to who is involved? A kind of class privilege pass, so to speak.

Of course this is true ! Especially to those living in the ‘real’ world.

Some intriguing details of this case are offered by former DOJ prosecutor, Carl Steinhouse in Naple News dot com:

The Humorous Side of the Law: No indicting an Apple?

The Department of Justice recently announced that it has sued civilly Apple, Barnes & Noble and a whole bunch of book publishers for conspiring to fix the price of e-books (digital books) to the consumer reader.

The target of this alleged conspiracy was Amazon, which had the temerity to discount e-books down to $9.99 and lower, and often at a loss to itself. This, of course, put competitive pressures not only on Amazon’s competitors having to match Amazon’s low prices, but upon the competitors’ suppliers, the book publishers, to lower their prices as well. This price cutting of Amazon had to go, they decided.

Before the alleged conspiracy, on the sale of an e-book, Amazon would pay the publisher the wholesale price for that title, with Amazon free to charge its customers whatever it wanted. Publishers were unhappy because their other customers, mostly bookstores, were screaming bloody murder about the unfair competition from Amazon. This put a publisher in a quandary. It could, on its own, refuse to sell to Amazon. But just one publisher refusing to deal with Amazon would not make much of an impression on Amazon and that publisher would stand to lose a lot of business from the world’s largest e-book reseller. But if a group of publishers did the same thingnow that would be a different kettle of fish, depriving Amazon of its stock in trade, at least in e-books.

Enter Appleand Steve Jobs. Apple, with its new entry into the digital landscape, the iPad, became part of the equation because it now offered e-books on its devices in competition with Amazon’s Kindle. As we all know, Jobs, may he rest in peace, was no blushing violet and not one to ever sit on his hands and let someone take a bite of his Apple. Apple was not in business to lose money on any of its products, and e-books, in its iBooks store, Jobs determined, were not to be the exception.

According to the Justice Department, Jobs got the publishers and some of Amazon’s competitors to meet in the private dining rooms at upscale New York restaurants and by emails to discuss how to stop Amazon from steeply discounting their e-books on Kindle. The government says the defendants hatched a plan to band together to force Amazon to change from buying under the traditional wholesale pricing to a so-called “agency pricing” where the publishers set the price and pay Amazon and all e-book sellers a 30 percent commission. If all of the major publishers did this, Amazon would be required to raise its price from the $9.99 and lower, that it had been charging.

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04/04/2012

Looks Like the Agency Model May Survive DOJ as a Valid Business Model


The Right Decision on Agency Model ?

Signs emanating from news sources point to the agency model (backed by the big six publishing houses) being judged a valid business model by The Department of Justice.

With one alteration — Apple must drop its MFN (most favored nation) designation. MFN status meant Apple could not be undersold by other retailers.

What does this mean?

To me it means that all the best content, known authors, bestsellers, etc. will probably be available only through sites employing the agency model. Why? Simply because authors/creators can make more money with the 70%/30% revenue split — and at a price set by the author/publisher not a third-party retailer.

This also means that all the best new content, authors, bestsellers, etc. will probably leave Amazon with its cheapo book model, unless they make some changes.

That some of its titles in iBooks are uncompetitive probably won’t worry Apple much. It cares a hell of a lot more about upholding agency terms and MFN with magazine and newspaper publishers, where the market structure is totally different. 

What tomorrow may look like:

    For quality content go to Apple iBooks and other agency model sites.

    For lesser, second-rate, cheapo content go to Amazon.

More details here by  at Digital Book World:

Breaking Down the Apple-DoJ-Agency Five Saga and Its Ramifications

What could the actions of the Department of Justice mean for e-books? Here’s a breakdown with some scenarios as I understand the situation. 

Apple’s Agency Model

Publishers selling through Apple can only do so through an agency agreement (a uniform 70%/30% revenue split across all categories and digital products). That is true for all assets – games, music, video, movies, etc. – sold through Apple.

Based on the recent news reporting, the DoJ might accept agency as a valid business model. In an interview with the Wall Street Journal, Sharis Pozen, the top antitrust official at the Department of Justice states “we don’t pick the business model”, and is focusing its efforts on a settlement under which Apple drops the “most favored nation” clause form contracts according to a report by Reuters.

This means Apple’s business model for iTunes – including iBooks – may remain largely untouched. Apple does not have to worry about price-matching, does not need buyers or merchandisers to come up with the right price, and does not need to change its technical or e-commerce infrastructure. 

Most Favored Nation

To be competitive under its retail model, Apple originally insisted on a Most Favored Nation (MFN) clause to make sure its goods (and its processes for pricing these, where the publisher set the retail price) were competitive (i.e. Apple would not be undercut on the same goods in the marketplace).

Being forced by the DoJ to drop the Most Favored Nation (MFN) clause means that Apple could no longer insist that the retail price agreed between Apple and publisher is the lowest in the market at all times. 

Agency and the Big Six (Penguin, Macmillan, Hachette, Simon & Schuster, Random House and HarperCollins)

The big-six publishers (except Random House, which followed the “agency five” to this business model one year later) had agency agreements in place with Apple when iBooks launched and more importantly were able to force these agency agreements (RH included) on Amazon, too. Due to their market position and the popularity of their books (and authors), the big-six publishers prevailed in negotiations with Amazon (remember the outcry by authors and customers when Macmillan books disappeared from Amazon? Amazon caved inside of 3 days.)

It is likely that nothing will change for the big six if Apple is forced to drop MFN. It will be agency terms as normal with all retailers be they Apple, Amazon, BN, Google, Kobo or others. This is probably a very happy outcome for the big six.

However, at the same time, the big six are less constrained when doing short-terms promotions and will only be able to do these promotions selectively, i.e. only in certain channels and on certain titles. Regardless, I think the big six would be very happy with this outcome. 

Agency and the Second Tier

Many publishers in the “2nd tier” (all those outside big six – this in no way refers to quality of the output, it is just a reflection of size and market-share) have agency agreements with Apple, but wholesale agreements with Amazon, because Amazon had the upper hand in negotiations along the lines of “you are not willing to sell on wholesale terms? O.K. we will not sell your books” and swoosh these publishers would have lost the potential of selling to 60% to 70% of the now very large e-book market (as much as 50% of the total market for many titles).

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03/11/2012

Is the Justice Department’s Antitrust Division Allowing the Buying of Publishing Monopolies ?


Buying Publishing Monopolies?

It’s publishing intrigue time again 🙂 This time in the form of the wholesale model versus the agency model in digital publishing — OR, in other words,  Amazon versus Apple. 

Both models are monopolistic. The wholesale model allows the e-book retailer to fix a below cost (to them) flat price of $9.99 (very suspicious for future price gouging). The agency model allows the publishers to price-fix a higher, colluded price range. So, pick your poison or your monopoly. 

Which is better for the industry as a whole ? For the consumer ? For the financial sustainability of good writers and attracting future talent ? Etc., Etc., Etc. 

There are points on both sides of this issue, but one thing should remain clear while the Justice Department is trying to sort it all out:

Open and aggressive competition always promotes ingenuity, improved products, promotes quality industry growth AND  is the only safe and fair way to set prices. Something we have forgotten in a greedy rush to set or protect an unfair advantage or status quo.

 Washington Post columnist   gives an in-depth explanation of the publishing wholesale and agency models along with an insight into the industry politics and nuances involved in this flushing out of the new publishing landscape: 

Pick your monopoly: Apple or Amazon

As a general rule, we don’t prefer monopolies. We know that, over the long run, monopolists tend to raise prices, reduce choice and stifle innovation.

But are monopolies so bad that we might want to tolerate a little price-fixing by customers or suppliers in order to break them?

Could a little anti-competitive behavior actually be pro-competitive?

That is what five leading book publishers are arguing in explaining why they simultaneously accepted an offer from Apple, just before the release of the iPad, to change the way e-books are priced and distributed. Their actions moved the industry from a “wholesale” model, in which they sold e-books to retailers and let them set the retail price, to an “agency model,” in which the publishers set the retail price and pay the retailers a fixed commission on every sale. In the process, they managed to break up Amazon’s e-book monopoly and raise the price of online books by 30 to 40 percent.

Now you might ask at this point why breaking up a monopoly would raise prices rather than lower them.

The answer has to do with how Amazon went about building its e-book monopoly in the first place — namely, by setting a price that was lower than what Amazon was paying publishers for the book. What looked to consumers like a great bargain at $9.99 a book looked to others in the industry suspiciously like predatory pricing, or selling below cost today in order to gain a monopoly and raise prices in the future.

So which is better: a market in which Amazon uses low prices to maintain its e-book monopoly and drive brick-and-mortar bookstores out of business, or one in which the major book publishers, in tacit collusion with Apple, break Amazon’s monopoly and raise prices?

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01/23/2012

Apple’s textbook creation app


A look at Apple’s free creation e-textbook tool: iBooks Author. What a peek it provides into the future of self empowered publishing.

iBooks Author is not without its usual beginning flaws but it is damn good:)

Steven Sande of TUAW (The Unofficial Apple Weblog) says this: 

TUAW’s Erica Sadun and I are ebook publishers. Late last year, we started up an ebook publishing company — Sand Dune Books — and were fortunate to hit a publishing home run right off the bat with our book “Talking to Siri.” Since we’re familiar with the tools used to create documents for publishing on both the Amazon Kindle bookstore and iBookstore, we were both curious to see what Apple was going to announce on Thursday. The free creation tool, iBooks Author, wasn’t a surprise to us, and now that I’ve had an opportunity to work with the app I thought I’d pass along my thoughts on how it works and why it may not be the publishing tool for everyone.

Creating a new book

As with Apple’s iWork suite, launching iBooks Author initially displays a set of templates that authors and publishers can use right out of the box to create attractively formatted ebooks. That being said, there are only six templates available. Apple’s emphasis for iBooks Author is to create a vast library of low-cost textbooks, hence the six templates are all textbook-oriented. For authors who are more interested in publishing other types of fiction or non-fiction books, these six templates can be repurposed. After making changes to a template, the custom template can be saved for future use.

 

Anyone who is familiar with Pages will have few problems working with iBooks Author. The two apps are similar in many ways, with the addition of layout-specific tools. There are widgets — familiar to users of Apple’s ill-fated iWeb — that add special functions to ebooks. Those functions include interactive galleries, sound or video media, Keynote presentations, interactive review quizzes, interactive images, 3D rotatable images, and HTML code.

For each template, there is a very complete set of paragraph, character and list styles that can be applied to text with a click. New styles can be generated and added to the template as well. In addition, there are a number of page layouts available. The layouts include Chapters, Sections, copyright, dedication, and forward pages, blank pages, and 1 through 3 column pages. Placeholders appear on each layout, and with a click you can replace the boilerplate with your own text or images.

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09/26/2011

Amazon Jumps From Passive E-Readers To Active Tablet Computers With ‘Kindle Fire’


 

Throw Some KINDLE on that FIRE!

Amazon has decided to do battle with Apple in the tablet computing world … “A” vs “A” so to speak 🙂

In an effort to stay more relevant in the rapidly changing tech universe, and not to fall prey to obsolescence (as did AOL), Amazon is trying to go more 3-dimensional by stretching from the digital retailing/e-reader biz into the more active and multifaceted tablet computing arena.

David Streitfeld  in The New York Times:

Amazon Has High Hopes for Its iPad Competitor 

SAN FRANCISCO — One after another, like moths to a flame, technology companies have been seduced into entering the market for tablets. Apple made it look so irresistible, with 29 million eager and sometimes fanatical consumers snapping up an iPad in the device’s first 15 months.

But neither Samsung nor Motorola nor Acer could beg or borrow any of Apple’s magic. Research in Motion, the maker of the BlackBerry, said it shipped only 200,000 of its PlayBooks in three months — about what Apple sells in three days. Hewlett-Packard, which flopped this summer with the TouchPad, was the latest to get burned.

Now comes a final competitor, the best-placed challenger of all: Amazon.com. The retailer is on the verge of introducing its own tablet, analysts predict, a souped-up color version of its Kindle e-reader that will undercut the iPad in price and aim to steal away a couple of million in unit sales by Christmas.

A competition between Amazon and Apple tablets will be a battle that pits the company that created the first popular e-reader (and set off a still-unfolding revolution in how books are consumed) against the company that created the first popular tablet (and set off a revolution in progress about how entertainment and other media are consumed).

Both companies are riding high, racking up record revenues and seeing their stock market valuations cruise to new peaks. Each has ample resources to enjoy a pitched struggle for people’s attention and their wallets.

Whichever company triumphs, said the Barclays analyst Anthony DiClemente, “the consumer is going to be the winner.”

“The fact that Amazon is making such a huge investment might make Apple come back into the market at a lower price point,” he suggested. “What’s to prevent them from slimming down the iPad?”

Most tech companies like to keep their cards close to their vests, but Amazon, like Apple, strives to render the whole deck invisible. It has, though, scheduled a news conference in Manhattan on Wednesday, and the speculation on technology blogs and among analysts is that the tablet will be unveiled.

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08/29/2011

Apple iPad vs Samsung Galaxy – Who’s Infringing Who? – More Intrigue


Samsung Galaxy Tab 10.1

Growing intrigue in the tablet computer world! The two best tablets on the market are jostling for position and sales … with each throwing accusations at the other RE copyright infringement.

Apple, scared stiff of the more advanced Android based OS of the Galaxy, started firing infringement violations at Samsung and now Samsung is shooting back with counter copyright infringement lawsuits against Apple.

Neat. I am looking forward to the resulting best, cutting edge solution for the consumer.

Latest developments by Luke Hopewell for ZDNet:

Samsung fires back in Apple Oz Galaxy suit

Update In the latest developments in the ongoing patent saga between Samsung and Apple, Samsung today revealed a plan to countersue Apple for patent infringement within its flagship iPad tablet while pledging to push back its official launch date to the end of next month.

Legal representatives from both parties met for a directions hearing in the NSW Federal Court today, where barrister David Catterns, acting for Samsung, revealed to the court a plan to countersue Apple once the case made it to trial.

“Our cross claim will include a cross claim of infringement for a number of our patents that have been infringed by their [Apple’s] iPad,” Catterns told Justice Annabelle Bennett today, adding in a statement that its counter-claim would also encompass the Apple iPhone.

Apple Australia originally sued Samsung after it felt that the gadget maker was infringing on its patents in its upcoming Samsung Galaxy Tab 10.1. Samsung contested the allegation, saying that Apple Australia was basing its claims on the US version of the Galaxy Tab 10.1. The two parties at the time agreed to an undertaking that would see Samsung hold its shipment of the Australian version of the Galaxy Tab 10.1 until Apple had the chance to study three of the units, seven days before the proposed release of the device to market.

Apple Australia told the court that it had received the units last Thursday, and had until this Thursday to complete its investigation. Representatives acting for Apple Australia told the court that they had found two patents that Samsung had allegedly violated, in the investigation process, that support the Apple case. Apple Australia has also added another patent to the laundry list of existing alleged infringements.

The interlocutory relief originally agreed to in the legal stoush expires on Thursday, with the court hearing that unless Apple can acquire further relief in the case, Samsung could easily launch its tablet on Friday.

Catterns, acting for Samsung, told the court that the company had intended to release the device on the week of 12 September, most likely on the Thursday or Friday, but, due to uncertainty in the legal proceedings, Samsung agreed to push the release of the Galaxy Tab 10.1 until the week of 30 September to allow for legal action to proceed. Samsung also agreed that it would give Apple Australia 48 hours’ notice before releasing the device to market.

Catterns added that any further interlocutory relief in the form of an injunction would be inappropriate and biased against Samsung, adding that Apple has failed to submit any real evidence to the court support its case.

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06/09/2011

Publishers Gain More Flexibility in iPad & iPhone Subs


The iPad and iPhone have become popular tools among magazine and newspaper readers.

Finally! Apple iStore has realized that their dictatorial management style RE pricing of subscriptions through apps in the iStore for the iPad and iPhone was a road to nowheresville, disgruntled customers and loss revenues.

Please refer to these previous posts for more background on this issue.

The latest today is from Crain’s New York Business:

Apple eases rules on iPad, iPhone subs

“Publishers will have more flexibility with Apple’s new digital publishing rules. They will now be allowed to undercut Apple’s app prices for subscriptions on their own websites and elsewhere.”

Apple has made a change that could help newspaper and magazine publishers make more money when they sell subscriptions for the iPad and iPhone.

The looser rules make it easier for publishers to sell subscriptions on Apple Inc.’s hot-selling devices outside the company’s online store.

Apple’s original subscription policy dictated that publishers couldn’t undercut the prices offered within their iPad and iPhone applications. Apple said Thursday that rule will no longer apply.

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05/09/2011

Publishers, Do You Know What ‘Genericide’ Is?


A publisher’s or writer’s (and writers are their own publishers today) brand is their trademark. Yes, as we become better known for our works we are identified with a certain brand…of genre, style, savoir faire, etc.

Once we begin to establish a unique and certain writer’s personality (our own brand, so to speak)…how do we keep it from becoming too generic…or suffering from ‘genericide’?

I bring this topic up tonight because Apple is fighting with Amazon on exclusive trademark rights to APP STORE, a software application store.

“… it may be a good reminder to trademark owners to formulate a strategy for avoiding the worst fate to befall a trademark…genericide. Yes, it is actually as deadly as it sounds. Genericide occurs when a trademark becomes generic, meaning it is no longer an indicator of the source of a particular product or service, but rather, has become synonymous with its general class.”  Linda M. Norcross of Lewis and Roca Law Firm LLP.

I feel all app developers, no matter who they write apps for, should keep their apps well trademarked to identify their own unique work…AND, those who use (buy) their apps (e.g. Apple, Amazon, etc) should provide for this accommodation. 

Details from Linda M. Norcross of Lewis and Roca Law Firm LLP: 

Genericide – let’s hope it’s not contagious

As Apple fights with Amazon.com to assert exclusive trademark rights in APP STORE for, ahem, a software application store, it may be a good reminder to trademark owners to formulate a strategy for avoiding the worst fate to befall a trademark…genericide. Yes, it is actually as deadly as it sounds. Genericide occurs when a trademark becomes generic, meaning it is no longer an indicator of the source of a particular product or service, but rather, has become synonymous with its general class.    

Trademarks function as indicators of source. In other words, they identify the source from which a product or service originates so that consumers will be able to distinguish a trademark owner’s products and services from another’s, and come to expect a certain level of quality from that product or service. For example, no matter where you purchase a McDonald’s cheeseburger, you can anticipate exactly how it is supposed to look and taste, and it’s not the same as a cheeseburger from Burger King. That’s how a business’ reputation for quality, or its “goodwill” is established.

There are four levels of distinctiveness that fall along a spectrum of trademark strength. The first level, comprising the strongest trademarks are fanciful, or coined terms. Fanciful trademarks have no meaning until they become associated with a product, such as PEPSI cola or XEROX photocopiers. The second strongest is an arbitrary trademark, which is composed of a word that exists, but is then associated with a completely unrelated product or service, like APPLE (how ironic) for computers, or DELTA for an airline. The third strongest is the suggestive trademark, which requires the consumer to use his or her imagination to appreciate the relevance of the trademark in conjunction with the product or service it identifies. COPPERTONE, for example, doesn’t come right out and tell the consumer that the corresponding product is tanning lotion. Finally, descriptive trademarks are the least strong of the four trademark types. In fact, descriptive trademarks are not considered distinctive from the get go, as is the case with the first three trademark types, rather, but they can become distinctive in the minds of the relevant consumer over time, or based on a combination of factors including advertising dollars and unsolicited publicity. TV GUIDE and FROSTED MINI WHEATS are descriptive, because the identify a quality, characteristic, feature or function of the product being offered.

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