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Another nail in the book's coffin

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#1 Rail Paul

Rail Paul

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Posted 12 April 2012 - 05:55 PM

NY Times has an article today about the expected fallout from the Department of Justice's lawsuit against Apple and several publishers. The DOJ asserts the parties fixed the prices of e-books, partly to minimize the difference in price between the hard copy and the e-version.

The article posits Amazon as the likely winner. The current arrangement sets the prices of e-books above the prices Amazon had originally advertised prior to the publishers' agreement to set a floor price. Although one observer said that "publishing good content is the most important part" of a book, it seems that the disintermediation process will grind prices from the current $14.99 downward.

Other big issues include whether alternate readers like Nook will be supported in the future, and whether some writers will cut their own deals directly with Amazon. The writer Susan Orlean commented on her blog a while back that a short work offered only for sale on Amazon netted her more money per sale than a traditional hard cover book. Traditional book sellers are severely disadvantaged by the potential of direct sales for a few dollars.

“Amazon must be unbelievably happy today,” said Michael Norris, a book publishing analyst with Simba Information. “Had they been puppeteering this whole play, it could not have worked out better for them.”

The government said the five publishers colluded with Apple in secret to develop a new policy that let them set their own retail prices, and then sought to hide their discussions.

After that deal was in place in 2010, the government said, prices jumped everywhere because under the agreement, no bookseller could undercut Apple.

HarperCollins, Hachette and Simon & Schuster settled the charges Wednesday, leaving the other two, Penguin and Macmillan, and Apple to fight.

Amazon, which already controls about 60 percent of the e-book market, can take a loss on every book it sells to gain market share for its Kindle devices. When it has enough competitive advantage, it can dictate its own terms, something publishers say is beginning to happen.

The online retailer declined to comment Wednesday beyond its statement about lowering prices. Asked last month if Amazon had been talking to the Justice Department about the investigation — a matter of intense speculation in the publishing industry — a spokesman, Craig Berman, said, “I can’t comment.”

Price shaking?

“Jazz musicians just get better and better as the years go by. I think chefs are the same way. You know who you are.”


...Jonathan Waxman