Remember meForgot password?
    Log in with Twitter

article imageOp-Ed: Apple guilty in conspiracy verdict over e-book prices

By Paul Wallis     Jul 11, 2013 in Business
New York - In what may or may not come as a surprise to e-book readers, Apple has been found guilty of illegally conspiring with book publishers to raise the price of e-books. The case was raised by the Department of Justice, and the fallout is just starting.
The New York Times defines the marketing position succinctly:
“The Department of Justice has unwittingly caused further consolidation in the industry at a time when consolidation is not necessarily a good thing,” said Mark Coker, the chief executive of Smashwords, an e-book distributor. “If you want a vibrant ecosystem of multiple publishers, multiple publishing methods and multiple successful retailers in 5, 20 or 50 years, we took a step backwards this week.”
Some in publishing suspected that Amazon had prompted the government to file its suit. The retailer has denied it, but it still emerged the big winner. While Apple will be punished — damages are yet to be decided — and the publishers were chastened, Amazon is left free to exert its dominance over e-books — even as it gains market share with physical books. The retailer declined to comment on Wednesday.
To explain — Amazon is seen as a winner here because its prices are set at anything from $1.99 upwards. I publish on Kindle myself, and you can set any price, as long as you can stand the figure for your cut of the payment. Raising prices, in effect, was a pretty lousy idea even from a simple sales perspective.
Coker’s view is actually the epitome of the new dynamic. Smashwords is all e-books, and he knows his market well. The idea of multiple publishers and multiple publishing options is the new black for both readers and publishers. It allows a lot more flexibility in marketing of types of books, and it’s a much neater business model than the old style, neurotic, and far too conventional publishing which leaves too many new authors out in the cold.
The Department of Justice defines the issues in its press release regarding the verdict:
On April 11, 2012, the department filed a civil antitrust lawsuit in the U.S. District Court for the Southern District of New York against Apple, Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc., for conspiring to end e-book retailers' freedom to compete on price by taking control of pricing from e-book retailers and substantially increasing the prices that consumers paid for e-books.
At the same time that it filed the lawsuit, the department reached settlements with three of the publishers – Hachette, HarperCollins and Simon & Schuster. Those settlements were approved by the court in September 2012. The department settled with Penguin on Dec. 18, 2012, and with Macmillan on Feb. 8, 2013.
Note the “control” idea. That’s basically a choke chain, forcing prices up. The Department was quite right to want some law on this issue. The verdict is vindication for competition and a free market. In this case, “regulation” has saved consumers a lot of money and probably saved retailers a lot of reduced outlays.
Publishing is way too bureaucratic as it is. It’s hopelessly out of step with the market. E-books are a new medium with a new audience and new demands. The old red pencil/submissions/patronise writers routine really doesn’t cut it with writers or readers. Adding some ridiculous price structure which increases costs to readers is a suicidal own goal and a half. Why publish with a major publisher, when you can publish yourself and cut out the middlemen?
(It’s interesting to note that with most media companies, the people who actually produce the products, without which these companies wouldn’t exist, are treated like dirt when they make contact. So are fans, retailers, and everyone else. Who needs these people, anyway?)
The mechanics of publishing and selling books are brutal enough without someone adding yet another obstacle to selling e-books. E-books are supposed to be the cheaper option. A lot of major sellers have invested a lot in e-readers so people can buy these books, then they want to reduce volumes of sales by increasing prices? It’s idiocy, and the basic skills of whoever suggested it are to say the least questionable:
Only so much gets spent on books, period.
That amount goes up by population volume, slowly.
Only so many people are regular book buyers.
Demand is a moving target. Genres only go so far, and they divide the cake up still further.
To get good results, prices should go down, not up. It would increase readership, improve sales figures, and add a lot to some very iffy bottom lines.
The habit of cartel pricing has to go from media, and particularly from book publishing. It’s a dinosaur. The publishers themselves, and the booksellers, contradict the whole idea with their endless bargain bins. They know perfectly well that high prices are sales killers. The idea is to sell product, not stuff around with a few cents on margins. This is basic marketing, and that’s something the publishing industry seems to know absolutely nothing about.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about Apple, Department of justice, ebook prices, Simon and Schuster, Harpercollins
More news from
Latest News
Top News