The Three R's: Readin', Writin' & Retribution

From: Made In China

"Closing arguments for the Department of Justice’s antitrust suit against Apple concluded last week, although U.S. District Judge Denise Cote is not expected to reach a decision for another couple of months. If you’ve found the case difficult to follow, you’re not alone. Still it’s worth getting a handle on the basics because the suit — or, more precisely, the business deals behind it — have changed book publishing in significant ways. Furthermore, Judge Cote’s decision could have impact well beyond the book industry.

     Apple was charged with colluding with publishers to fix e-book prices. At the root of the dispute lie two different ways that publishers can sell books to retailers.
     First, there’s the wholesale model, the way that book publishers have sold printed books to bookstores and other outlets for years. The publisher sets a cover price for a book, sells it to a retailer at a discount (typically 50 percent) and then the retailer can sell the book to consumers for whatever price it chooses.
     The other method of selling books is via the agency model, which means, essentially, on commission. The retailer offers the book to consumers at a price the publisher sets and gets a percentage of whatever sales are made. It’s rare for print books to be sold in this way, but it’s the method Apple uses to sell content like music and apps in its iTunes store."
— Laura Miller, Salon
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Biting the Hand

From: Coverbrowser

"Late last week, the [United States] Justice Department warned Apple and five of the nation’s largest publishers that it was planning to sue them for price fixing. At issue is the agency model, a method of wholesaling e-books in which the publisher sets the retail price and the retailer takes a 30 percent cut. Most print and many e-books are sold under the traditional wholesale model, in which publishers sell books at a discounted price, and the retailer can resell them for whatever price it likes.
     The unnamed player in this drama is Amazon, which had been selling e-books at a loss until two years ago, when the iPad came along and publishers used the emergence of the new device to pressure the online megaretailer into adopting the agency model, too. If Amazon wanted to sell e-books from the Big Six (as the six largest book publishers are called), it could no longer sell those titles for $9.99.
     Publishers actually make less money with the agency model, so why have they insisted on it? The change was designed to limit the growing dominance of Amazon over American book retailing. On Monday, Scott Turow — the bestselling author of “Presumed Innocent” and other legal thrillers, and the president of the Authors Guild — posted a letter to members on the Guild’s web site. In it, he pronounced the Justice Department’s actions bad news for authors, 'grim news for everyone who cherishes a rich literary culture,' and (contrary to first impression) ominous for book consumers. I called him up to find out more."
— Laura Miller, Salon
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