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George Schlukbier
George Schlukbier
Internet entrepreneur. A digital pioneer who as first mover in the Internet news marketplace built NandO and Total Sports creating unique products that were the foundation for web development. Consultant.
 

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Posted in Law / Business / Antitrust & Trade

Ebook Antitrust Settlement Still No Win for Readers or Writers

Apr. 12, 2012 2:55 pm
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The problem with this DOJ (department of justice) suit is that it really does not address the fundamental problems with publishing. Amazon can coerce publishers to price books according to their dominant marketing position. If a publisher prices a book on Amazon between $2.99 to $9.99 it will receive a royalty of 70% of the purchase price. Any other price will generate a royalty of only 35%. The publishing industry is afraid that Amazon will dictate price for all ebooks and have a big impact on traditional print/paper publishing. The cost of producing books will exceeds the ebook royalty. So regardless of how many books are being sold publishers will not be competitive in either their ebook market or traditional market.

So, why should the reader care? Because if we see a major decline in the number of quality publishers we will see a big decline in 'good books' being published. Price is only one issue when evaluating what is best for the publishing industry. If authors are seduced to publish only through Amazon then an entire industry will be eliminated. The Attorney General needs to make sure that their antitrust indictment is confined to a strict interpretation of illegal price fixing or 'collusive behavior' and not an endorsement of the 'wholesale model,' and the distributor's market dominance.

If Amazon, Barnes and Noble, Apple can be allowed to discount book prices and dictate book prices through MFN (most favored nation) contract clauses then independent publishers and mainstream publishers will have little or no reward for publishing new writers. We are not addressing the biggest problem with publishing today- how to ensure we have writers that can make a living by publishing books. The best seller model is not the best method to develop writers and encourage readers to read new writers. The whole sale model is not the best way for publishers to attract readers to new writers because it discounts too much. Ebook publishers need to be able to build readership by having access to the marketplace without dictatorial pricing schemes.

The 2010 Apple Agency Agreements were clearly a violation of antitrust and demonstrated how publishers engaged in collusive behavior. However, the problem remains and is not addressed by this DOJ suit. Publishers need access to the ebook marketplace and should be able to determine a fair and consistent price for readers and a living wage for writers.

The publishers need to reaffirm their relationship with writers and work with them to establish a living wage for this digital marketplace as well as the traditional print and paper book markets. Readers want good writers. Publishers need to remember that their readers care about how they treat their writers and nobody cares about the distributor.

 
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