It comes from the New York Times today — Book Publishing’s Real Nemesis — and is manufactured by David Carr, who has a shocking ignorance of eBook history, recent history, and is plainly biased towards the status quo.
The Justice Department finally took aim at the monopolistic monolith that threatened to dominate the book industry. So imagine the shock when the bullet aimed at threats to competition went whizzing by Amazon — which not long ago had a 90 percent stranglehold on e-books — and instead, struck five of the six biggest publishers and Apple, a minor player in the realm of books.
That’s the modern equivalent of taking on Standard Oil but breaking up Ed’s Gas ’N’ Groceries on Route 19 instead.
What the hell is this guy talking about?
The Justice Department finally took aim at the monopolistic monolith that threatened to dominate the book industry.
Does he even know what the anti-trust suit was about? What “monopolistic monolith”? This is the first of his cheap shots by implication at Amazon. There was no “Standard Oil” that was being aimed at. It was Apple and the Big Six (who became the Big Six by gobbling up all the other publishers in NYC that once existed!).
The suit has its roots in 2007, when Amazon released the Kindle and began selling some of the most sought-after books for $9.99 in order to bolster sales of its device. Not surprisingly, booksellers and publishers hated this price with the force of 10,000 suns because it made physical books sold for $25 or more seen outrageously overpriced.
A $9.99 eBook makes expensive hardcovers “seem” expensive — but what about all those eight-dollar mass-market paperbacks the Big Six publish themselves? It’s like they don’t exist. Because this is propaganda, not a dissection of a screwed-up business that’s hellbent on destroying itself.
Under the wholesale arrangement with Amazon, the publishers received half of the list price, which yielded better money, but gave them no control over the pricing of their product.
Did you see that important bit whizz by in the words? Let me highlight it for you:
which yielded better money
Wait. The Big Six were actually pulling in more money from Amazon under the Wholesale Model that had been in existence for several decades? Yet they wanted to control their prices so they could make less money?
Yes, publishing is that screwed up.
And notice how, again, the eight-dollar mass-market paperbacks they publish are never mentioned. They can make profits on eight-dollar paperbacks but not $9.99 eBooks? How stupid do they think people are? How stupid does Carr think we are?
(Why the crumbling book business is worthy of so much attention from Justice while Wall Street skates is a broader question we’ll leave for another day.)
Wall Street — whose perversion of the capital markets drove the creation of the Big Six — gets a mention. But not eight-dollar paperbacks the Big Six publish! Because this is propaganda.
Let’s stipulate that there may have been some manner of price-fixing here…
That’s a smarmy way of saying, “Stupid Government! Let’s just pretend those incompetents actually had a case…” Right, like the DoJ complaint didn’t have dates and times and reference phone records. He is really spitting on the amount of fine work that went into that complaint.
From the very beginning and with increasingly regularity, Amazon has used its market power to bully and dictate.
From the “very beginning”? You mean, like when Amazon was less than a dozen people and their desks were doors on sawhorses? Who are you trying to kid with that crap? It’s like those guys pulled a heist to get where they are now. At any time any publisher could have stopped selling their books to Amazon. And they can still do that today.
It leaned on the Independent Publishers Group in recent months for better terms and when those negotiations didn’t work out, Amazon simply removed the company’s almost 5,000 e-books from its virtual shelves.
He brings that up but never mentions when Amazon actually banned eBooks from the Kindle Store, which is actually a more pressing issue than a contract dispute. And what did he expect Amazon to do when IPG refused to sign the contract? Keep their eBooks in the Kindle Store? Amazon had to pull them because there was no legal way to continue selling them!
And he leaves out that IPG can still sell its books via Barnes & Noble, Kobo, Apple, Sony, Google, and others. Amazon does have competition — IPG does still have large sales outlets — and some of those companies are as formidable as Amazon.
The deal struck with Apple also allowed other players into the e-book business, including independent bookstores.
What the hell is he talking about? Name one! There are none. This is propaganda! If he’s thinking of all those local print bookstores that were tied into another giant “monopoly” — Google — then once again he’s showing his ignorance. While Google’s eBookstore opened December 2010, post-Agency — it had been in planning for several years, prior to Agency. Had Agency never happened, Google would have still entered eBooks. Agency led to no new eBookstores at all. What was the point of having one when your competitive hands were tied due to price-fixing?
What Agency did lead to was new publishers forming. Because they understood the Big Six were pricing themselves out of their own market.
Previously, Amazon’s $9.99 subprofit price was a virtually impenetrable barrier to entry for anyone who couldn’t afford to lose millions in order to gain market share.
Wait. What about all those eBooks available at Amazon from other publishers that were far less than $9.99? How can those make a profit? How can the eight-dollar mass-market paperbacks from the Big Six make a profit? And what about the eBookstores that already existed prior to Amazon? Did Fictionwise drop dead? Did Sony pull out of eBooks? And why did Kobo, Barnes & Noble, and Google enter eBooks if Amazon was the entire market and no one could compete? The only company afraid to compete was cash-rich Apple. Such irony. And more Carr propaganda.
Remember that it was only after agency pricing went into effect that Barnes & Noble was able to gain an impressive 27 percent of the e-book market.
This is the biggest Big Lie of the entire piece!
First, the Nook was introduced October 2009. That’s three months before the introduction of the iPad. Three months before anyone knew Agency was happening. And Barnes & Noble had to have been planning the Nook for at least a year. So back in 2008 Barnes & Noble thought it could make a go at eBooks.
Second, he dismisses the fact that Barnes & Noble had a huge advantage over Amazon: storefronts. People could actually see, touch, and try the Nook. They couldn’t do that with the Kindle. (At some point Amazon had “Kindle ambassadors,” Kindle owners who volunteered to meet potential customers in their area so they could actually see a Kindle in person!) It wasn’t Agency that helped Barnes & Noble gain market share. It was having storefronts. And it was also having a good eBook device.
And does he even know the Nook is Barnes & Noble’s second shot at eBooks? They sold the Nuvomedia Rocketbook back in 1998 and its other partner with Nuvomedia was Bertelsmann, one of the Big Six.
Further, Barnes & Noble might have died in the early 2000s had it gone through with this.
Now Amazon has the Justice Department as an ally to rebuild its monopoly and wipe out other players.
Really, anyone believing that stark lie is beyond help. Especially at this point in this post. Let me spell it out if your mind is exhausted from this long post: Do you really think Apple, Kobo, and Google will exit eBooks? As for Barnes & Noble, more in the next section.
Borders is long gone, and the possible loss of Barnes & Noble would be bad for consumer choice, online or off.
Again he implies that Amazon crushed someone out of business: Borders. That company was a victim of its own incompetency. And the Big Six refused to cut it any slack so it could continue to exist. So we’re supposed to cut Barnes & Noble and the Big Six slack so they can continue to exist? Why?
Further: Tower Records, Virgin Megastore, and just about all record/compact disc stores are gone. Tell me again how we’re not getting any new music because those stores are gone. Oh, you can’t. If Barnes & Noble drops dead and the Big Six have to cut their yearly output to accommodate minuscule shelves at Wal-Mart, Kmart, drug store and supermarket chains — well, that’s too damned bad. That’s what happens in business when you do it wrong.
eBooks will continue to be published and writers will continue to write and there will be thousands and thousands of eBooks to buy.
There are some ironies here. Amazon views e-books as cheap software sold to animate device sales, in this case, the Kindle. And who does that remind you of? Ah yes, Apple, which shrank music to a 99-cent single business to propel the sale of iPods.
The point being what? And he neglects to mention that Apple buys its music from the giant labels under the wholesale model!
Peter Kafka at AllThingsD dug out a throwaway line in the middle of the complaint from the Justice Department…
Is this Carr’s admission that he didn’t bother to read the complaint? Or that he couldn’t understand it?
But Richard Epstein, a professor at the New York University School of Law, pointed out, “it is not clear that lower prices are necessarily in the long-term interests of the public at large.”
So we should have, what, protected industries? What would you have told Henry Ford when he wanted to price his Model T so low, Professor? And what about those eight-dollar mass-market paperbacks the Big Six still publish today?
Robert F. Levine, a lawyer with an extensive practice in publishing, said there’s a practical reason for all that uniformity. The book business is both hermetic and dwindling.
And so it should be protected from the mean cruel world it’s in — that being the world of business? I say No.
“There is not a drop of new capital coming into this business,” he said.
Wait a minute. These aren’t start-ups. These are global corporations! They can issue corporate bonds at any time! Who are you trying to kid? And publishing isn’t dying from any lack of capital. It’s dying due to lack of leadership and thinking.
Scott Turow of the Authors Guild isn’t even worth addressing again. See here.
Maybe I’ll order it [“Fifty Shades of Grey”] at my local bookstore instead.
Really? The one that had its Google eBookstore storefront shut down recently? Yeah, you go ahead and try to do that. Then you’ll go buy it at Amazon. And never mention that fact to anyone.
It’s shocking that no one at the New York Times questioned anything in the above article. Are editing and fact-checking dead too?
Bottom line to always, always, always remember: The Big Six want you to forget that they publish eight-dollar paperbacks that make them money. So when they cry about $9.99 eBooks, don’t even bother to lend them a tissue!