Monday, June 18, 2012

Federal Government and Book Selling?

The lawsuit by the Federal government against Apple and some eBook publishers regarding eBook price fixing did not alter the upbeat mood of this year’s BEA (BookExpo America), but murmurs of conversation were detected reverberating through the cavernous halls of the Javits Center. The “comment period” on this eBook case expires on June 25.  So far, the Department of Justice has received over 150 letters totaling 200 pages, and expects more before the deadline. The initial agreement between Apple and five publishers allows the publishers to set the selling price of their books that are sold in the Apple store (agency model).  In return, Apple receives 30% of the sell price, which is a very nice piece of revenue.   In doing so, the publishers agreed not to sell their eBooks at a lower price elsewhere.  Amazon wants to set the prices for eBooks, even if it is at a loss.  So publishers are now faced with breaking their agreement with Apple, or not selling their eBooks on Amazon.

The Justice Department doesn’t seem to grasp that the publishing industry is in a state of major flux due to the Internet.  Publishers are fighting for survival and authors are selling their own materials online - eliminating the “middleman” distributor.  Amazon also has programs that help authors do this type of direct selling. So why not let the publishers figure out which model works the best for them?  Why do we need intervention by the Federal government regarding book distribution?  This viewpoint was echoed on June 7 in a complaint by Barnes & Noble, which stated that any settlement “would represent an unprecedented effort to “become a regulator of a nascent technology that it little understands.” Antitrust laws are based on the premise that government intervention is needed to ensure competition, but the market can determine that without the government’s help.  We just need to be patient and let the marketplace work things out for the publishing industry.