Last week, the Department of Justice sued five publishers and Apple and charged them with collusion in the implementation of the agency model for e-book pricing. The charge is civil, not criminal. Three of the five publishers, Hachette, HarperCollins and Simon & Schuster are settling their suits, but Macmillan U.S. and Penguin Worldwide are not. Here is what Publishers Weekly reported followed by statements from John Sargent CEO of Macmillan and John Makinson, Chairman and CEO of the Penguin Group.
So, what does this mean to authors?
Ultimately it means that Amazon, which has had a very strong market share in discounting e-books recently with Barnes & Noble starting to catch up under the agency model, will now virtually have a monopoly on selling e-books. The company, which as we know, sells many products other than books, can afford to lose money on their sales of e-books because they have so much other merchandise to make a profit from.
Barnes & Noble and other accounts, however, cannot afford to lose money and they will do if they are forced to compete with Amazon’s steep discounting. In fact late last week, B&N stock took a substantial dive for this very reason.
And, if as a result of this, Barnes & Noble is forced out of business, it will be a disaster for publishers and authors alike. There will be nowhere to display physical books any longer.
I am not a lawyer and so I can’t discuss the legalities of any of this. What I can suggest is that if authors agree that giving Amazon a true monopoly in the e-book publishing business will be hugely destructive to the business as a whole, then they should blog, write op-ed columns, and get as much publicity possible in order to attempt to turn this situation around. It is myopic, in my humble opinion, to believe that allowing Amazon to become a monopoly in the e-book business will ultimate benefit consumers (see David Carr’s piece in today’s New York Times).
What do you all have to say about these developments?