Scott Turow, president of the Authors Guild, has written an op ed for Bloomberg in which he reiterates a number of the same points of view concerning a DoJ investigation of publisher price collusion that have been posted to the Authors Guild blog in recent weeks. Turow is concerned that if the government rolls back agency pricing, it will hand Amazon power sufficient to kill off its competitors, including publishers, and thus harm the diversity of titles available to readers.
Turow discusses a lot of the anti-competitive things Amazon has done, including its delisting of IPG e-books and its insistence that smaller publishers use BookSurge rather than cheaper, non-Amazon-owned competitors. He points out that since agency pricing came into being, Amazon’s share of the e-book market has fallen from 90% to 60%, allowing competitors such as Barnes & Noble and Apple to carve out niches in the market. But, Turow says, this could be lost if the government allows Amazon to return to its old ways.
As with those posts to the Authors Guild blog, Turow’s Bloomberg op-ed is being met with some skepticism. Of the three comments posted at the time I saw the article, two were resoundingly negative.
One thing that occurs to me about this op-ed is that it seems to set up a false dichotomy—either agency pricing is allowed to continue as it is, or it is entirely repealed. However, as the DoJ has said, they are looking at potential compromises for settlement. Perhaps they can find an acceptable middle ground.
As a writer, I don’t particularly like agency pricing. I don’t use it for my printed books. In general, I don’t care what price someone sells my books as long as I get the slice of the retail price that I’ve set.
But for the present, agency pricing makes sense.
1. Amazon clearly intended to sell popular ebooks below costs to crush their competitors and control the market, after which it could and would do anything it wanted. Agency pricing stopped that move. Since then the market has gotten a bit healthier, but the risk of Amazon domination remains.
2. Ebooks have flipped marketing upside down. With print books, I have to limit those I send review copies because every one costs me money. With ebooks, I can use free distribution to attract attention to an ebook, essentially offering the world free review copies, and then reprice the book once word gets out so I don’t starve. Agency pricing forces retailers to follow the price moves I make up and down. When I make it free as a promotion, they can’t continue to sell it at the old price, reaping a windfall and depriving me of that needed publicity.
And since I regard the DOJ lawyers filing this absurd lawsuit as being utterly clueless about the realities of publishing, I’m quite skeptical about any ‘middle ground’ they might offer. There is, after all, no middle ground about who sets the selling price. Either the publisher sets it or Amazon will undercut and destroy the market. The real problem doesn’t lie with the major publishers. It lies with Amazon, who isn’t in this dispute.
One final note. If the DOJ wants to be constructive, it should start shaking down Amazon and Apple for their proprietary ebook formats. Both the new iBooks Author format and that of Amazon’s KF8 are simple variations on epub, just different enough to force customer lock-in.
There are legal parallels. Starting with the Carterphone case in the 1960s, AT& T was forced to make its phone system compatible with third party devices by adopting open standards. It wouldn’t be unprecedented to do the same with ebook formatting.
It’s really a combination of the proprietary formats and proprietary DRM that force customer lock-in. If the publishers were really interested in ensuring a healthy ebook retail environment, they either need to drop DRM or require the retailers to sell ebooks that can be read on all ereaders. As long as Amazon continues to sell a majority of the ereaders, they’re going to have a majority of ebook sales.
@Bruce
I would say nothing “locks you in” anymore.
Kindle and nook books can be read through applications, so you don’t even need the ereader, nobody cares about ibooks, and everyone else I can think of uses adobe standard DRM that I can be read by anything except an e-ink Kindle.
None of this was true in 2009, before the agency model was put in place. But it is true now.
What really locks people in is the fact that, with no price competition, there’s simply no reason for anyone to shop around. In other words- the agency model.
Yeah, ’cause I’d much rather live under the Big 6 Publishing Cartel as opposed to an Amazon monopoly.
As if those are or will be the only possible options.
The fact that kindle or nook books can be read through applications does not change the fact that you are locked into one vendor’s system.
I “buy” a kindle book. Now I can read it on a Kindle, or using a Kindle Reading App on a phone, computer or other device. But those are all controlled by Amazon. If Amazon chooses, for whatever reason, to cancel my account or deregister my device I’m flat out of lock. Can’t read the book I thought I “bought”. Can’t move it to a new device. Can’t read it using a third party app.
This is the essence of lock in.
“He points out that since agency pricing came into being, Amazon’s share of the e-book market has fallen from 90% to 60%, allowing competitors such as Barnes & Noble and Apple to carve out niches in the market. ”
By the same logic, since I ate dinner last night, the sun went down and rose again. Therefore the sunset and rise was obviously caused by my eating dinner (good thing I didn’t have a heavy lunch).