Monday, April 23, 2012

One More Article: the Lawsuit Against e-Book Price Fixing

A week ago today there was an article on the front page of the New York Times Business section that beautifully sums up what's really happening with the government vs. publishers and distributors and e-book pricing (at least in my humble opinion—it was great to finally see someone nail it in the news).

The article, written by David Carr, is called Book Publishing's Real Nemesis. It's not too long, and I'm including the link for you to read the full article (highly recommended). But for your skim-browsing pleasure, here are the highlights:

  • The Justice Department finally took aim at the monopolistic monolith that threatened to dominate the book industry. So imagine the shock when the bullet whizzed past Amazon. . .and struck five. . . publishers and Apple.
  • The (law)suit has its roots in 2007, when Amazon released the Kindle and began selling . . . books at $9.99 . . . to bolster sales of (Kindle).
  • As an aside: Why the crumbling book business is worthy of so much attention from Justice while Wall Street skates is a broader question. . .
  • . . . pull back a few thousand feet and take a broader look at the interests of consumers. From the very beginning Amazon has used its market power to bully and dictate. . . Amazon uses its scale not only to keep its prices low but its competitors at bay.
  • . . . book publishers face an existential threat
  • In defense of the agency model: the deal struck with Apple . . . allowed other players into the e-book business, including independent bookstores (that couldn't get in when Amazon had a lock on the $9.99 price). It was only after agency pricing went into effect that Barnes & Noble was able to gain an impressive 27 percent of the e-book market.
  • Now Amazon has the Justice Department as an ally to rebuild its monopoly and wipe out other players.
  • It is not clear that lower prices are necessarily in the long-term interests of the public at large.
  • Scott Turow, a big-time author who is president of the Authors Guild, (says): "It is breathtaking to stand back and look at this and believe that this is in the public interest. The only rationale is e-book prices will go down, for how long? What happens when there is no one left to compete with them?"

With those wise and cautionary words from Turow, who is an attorney as well as a major author, the issue is summed up.

I'll be following this sort-of-bizarre lawsuit as it goes on. I have a feeling it will drag on, but what happens with it will certainly be of interest to us. I would love to hear all your thoughts on this. Do you think there's a silver lining? What is it??? Is self-publishing the best response for a writer? Is going with a major publisher? In either case, how hard is it to keep your head above water?

~ Linda


  1. Linda this is fascinating. What is the answer? I don't know.

    I wonder if we could get "all" the self-published authors to NOT give Amazon 30-50% of their we do now... but put it in at 5- 10%. What would Amazon do? Would they publish it? If so, they would have zero control over the price. No room to change what the author sets. Maybe the industry could change that. I'm assuming since I have the right to change my % everyone does.

    I think that ... kindle with Amazon. Nook with Barnes and Noble. Ipad with Apple.... Future will bring greater technology that someone will come up with a product that can buy an ebook in any format and download anything on it.

    Thanks for keeping up with this. What are your thoughts?

    1. What do I think? Bubble, bubble, boil and Trouble. It's a witch's brew they're stirring up, and unfortunately not the good witch kind. I agree about the technology, but it's going to take the Justice Dept. to step in and mandate non-monopolistic business policies. How many authors will wilt on the vine before THAT happens?

  2. It would be great if Amazon didn't force 30% off, but they do, with both self-published and traditional. It's the price of being available on a Kindle. When small presses and self-published authors give places like Amazon less of a discount, Amazon has a tendency to pull some nasty tricks to make those books less noticeable and less available. Not cool.

  3. Seriously. But no one seems to be able to overcome their advantage for now. :-(

  4. This is scary stuff. I'm not yet ready to give an opinion...still learning. Thanks Linda, for giving the highlights!

    1. Thanks, Lydia. I know what you mean, the situation is fluid and there's no way to know for sure where it's leading. Twists and turns to come, perhaps!