GENEVA, SWITZERLAND / EDITOR’S NOTEPAD – The pricing system for e-books is mostly a puzzle to the public, who have been convinced for years that books are priced based on tangible costs such as printing and shipping. Not so, but publishers never felt very pressed to explain this part of their work until e-books appeared on the scene. That left them with a public demanding to know how an e-book could cost as much or more than a paperback version bought on Amazon. Their efforts to explain what seemed like a very gray area to many of us never really worked.
Into this fuzzy debate stepped the US government, which last year charged five major publishers and Apple with price fixing. The publishers settled but the Department of Justice trial, the United States et al vs. Apple Inc et al, with Apple as the lone defendant, is running this week, and it’s making colourful reading.
The Justice’s Antitrust Division asked the judge to allow comments to be published only electronically and not, as is usually required, in the official federal record because there were so many comments it would be too costly. Numerous comments therefore are tucked away on the Justice office’s site, such as this one from publisher and agent Andrew Zack.
Apple may be on trial, but Amazon comes across as the bad guy. The Wall St Journal contends that Apple’s move into a market dominated by Amazon in 2010 was the opposite of price-fixing.
“The rise of e-books is the trial’s backdrop, from Amazon’s introduction of the Kindle reading device in 2007, to the explosive growth of digital sales in 2008 and 2009. All the while, publishers’ feared that Amazon was dominating the market and selling books at unsustainable prices,” writes the Journal.
Publishers Weekly, the industry bible in the US, writes “One theme consistently emerges in this trial—despite selling the vast majority of their books, publishers believe Amazon to be an implacable foe and a de facto monopoly and seem willing to do anything to take back control of the pricing of their e-books.”
Cnet writer Nathan Bransford offers a detailed breakdown of the cost of an e-book, which is helpful background to the trial. “The vast majority of a publisher’s costs come from expenses that still exist in an e-book world: Author advances, design, marketing, publicity, office space, and staff.” A key point is that iPad’s arrival on the scene shifted the game for publishers.
One of the more curious aspects of the trial is that electronic devices are banned in the courtroom. Most journalists used computers, phones or notebooks now to take notes for most of their work, at conferences, often in meetings. But US courtrooms don’t yet allow this, as Jeff John Roberts at PaidContent reports.