Amazon versus Apple and Publishers: Who’s Right?

This week, the Department of Justice charged Apple and five major publishers with collusion to keep book prices high.  A few years ago, this forced Amazon to raise its prices from the $10 it started with to anywhere from $12 to $16 for newly published e-books.  Those of us who already owned Kindles were  angry but didn’t have much choice, and the market wasn’t impacted too much; you can buy another type of e-reader but the e-costs are the same everywhere.   I’ve actually tried (as my own feeble form of protest) to limit the number of over-$10 e-books I buy – and it’s not difficult when there are so many free classics and inexpensive e-books I can buy.  Last month I limited myself to three Kindle purchases, only one of which was over $10.  But that meant giving up some of the new releases I really wanted to read.

So the Justice Department’s action, and the quick settlement of three of the five publishers, signals an immediate win for Amazon, and a win for Kindle owners.  Amazon has already promised to reduce prices.

The publishers say that losing this fight with Amazon means that Amazon will eventually put them out of business, because their e-books require higher prices to keep them afloat.  They say that Amazon, having such a ginormous share of the e-book and e-reader market, can artificially lower prices but will then ultimately raise them once they’ve put everyone out of business.  They say that all readers will be hurt by Amazon’s control of the market.

As I’m neither an economist nor a business expert, I can’t offer much in the way of an opinion (and yet I have lots of them).   I don’t want anyone to have a monopoly on book-selling; but it seems to me that it’s the responsibility of the Department of Justice to step in if and when Amazon does reach monopoly-status, and that colluding to inflate prices can’t be an acceptable approach to a quickly changing e-book market.

I don’t want to see Amazon put book publishers and booksellers out of business.  I really don’t.  But at the same time, the book business is like the music business in a lot of ways, and publishers are going to have to shift their business models to survive those changes.  Keeping the book industry stagnant is not an option; and keeping e-book prices artificially high also shouldn’t be an option.

In fact, I also heard an interview this week with a fantasy/science fiction writer Scott Sigler (on Sword and Laser) who said that this is absolutely the best time to be a writer, and that e-books are creating more opportunities for new, untraditional and self-published writers than ever before.  The hosts of Sword and Laser also pointed out that when you compare the lists of top-selling science fiction/fantasy e-books to paper books, you see a wider variety of authors, and many more new authors, on the e-book list.

There’s also good reason to believe that e-readers are increasing how much children and teens are reading, which is a very good thing.

For the record, I worry about Amazon, or any company, having control over what I read.  And the day Amazon tells me I can’t read something because of its content (similar to Blockbuster Video, for example, deciding it wouldn’t carry NC-17 movies) may be the day I stop being an Amazon reader.  But right now, Amazon is the biggest, widest-open market for books there is.  They aren’t choosing books based on content or authorship; they’re putting everything out there.

I also recognize that there are costs to e-books even if we can’t hold them in our hands.  Publishers review and select books, edit them, format them and market them.  I think publishers play a really important role in helping readers select good books; I look to publishers like Scholastic or Penguin to tell me that something’s a quality book.  I don’t want the book market to just be full of self-published, $1.99 books.  Reading is about quality not quantity.

But it’s still illegal for a group of companies to get together and hold prices hostage.  And as technology paves the way for new ways to market and publish books, I want the publishers to adjust to that change, not try to prevent it.  It didn’t work for the music industry, and it shouldn’t happen here.

That’s my non-expert opinion.  What do you think?  Does Amazon have too much control in the book world?  Is this a case, as writer Scott Turow has said, of “killing real competition in order to save the appearance of competition?”

3 Responses to “Amazon versus Apple and Publishers: Who’s Right?”

  1. Grace

    I have a hard time joining the Amazon hate club because I still remember what it was like to live in a small town where the nearest bookstore was a half hour drive away and had almost no selection (and I didn’t have my driver’s license at the time). Amazon was life-changing because it meant that I could get any books that I wanted without having to get someone to drive me to the bookstore, special order them, and then make the trip again in a few weeks when they came in.

    I agree with you that this is very similar to what happened with the music industry; it’s time for new models on e-book pricing. I’m thinking that publishers should quit being greedy about backlist titles (let’s face it, the e-book prices on backlist titles, especially sci-fi/fantasy, should not be more than the cost of the mass market paperback), because that’s been an issue since the shift. Collusion isn’t the answer, but maybe publishers could sell their books to Amazon at a higher price than they were before but still allow Amazon to discount them if they want. That seems like an agreeable compromise that would allow the publishers to make money without stopping retail competition.

  2. Alley

    I wish I knew more about the whole e-publishing industry to really offer a good opinion. I certainly agree with you that e-publishing is very similar to the trends that have happened with the music industry and the publishing world should make sure to change with the times and not get stuck in an old, out-dated model.

    I wish I had a better understanding of the work and cost that go into publishing an e-book versus a traditional paper book. As it stands I really don’t know if the average e-book price is very fair, outrageously overpriced or insanely underpriced.

  3. Cynn

    My issue with the ebook is the fact that I’m expected to pay full price and I don’t own it, can’t trade/swap/sell it, and can only loan some titles under very restrictive circumstances and depending on the “license” I’ve purchase, the book can be recalled and removed from my eReader without my permission. OK, yes there are lots of free, cheap ebooks available, but that’s not what I like to read.

    I have an eReader which was a gift and I liked the experience, but for now, I’ll stick with used books and the library until authors and publishers and distributers get this worked out in a consumer-oriented manner.


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