Ack! Knee Jerk Confusion!

More backlash against Apple: the gummint is suing them, along with some major publishers, for colluding to artificially drive up e-book prices.

Ack! I’ve got ro-block! (The paralysis that occurs when two of the 3 laws of robotics conflict!) (If you can’t take the nerddom, get out of the Internet.)

Knee Jerk 1: I’m bookish! I side with publishers and want to keep as many types of books accessible for all, with publishers thriving enough to take risks for the good of Literature.

Knee Jerk 2: I’m anti-trust! I support anti-trust lawsuits! Let’s get all those monopoly guys!

What’s a Thinker for Hire to do?

Let’s break it down.

The pre-alleged-trust way of selling e-books matched the way publishers sold print books: sell at a consistent rate to all retailers, who are then free to charge whatever they want to their customers. This is the “wholesale model.”

But Amazon wanted to sell Kindle content at low-low-low prices to get customers to buy its e-reader–using the lure of cheap content to make money on the hardware. (Now, however, it seems to be the other way round, but with some very thin margins on both content and hardware. However, Amazon, like many other online companies (YouTube, Netflix, etc.) hopes to go into publishing itself, to make money off the content in the future.)

Publishers then feared that with Amazon’s artificially low price for e-books, all the customers would flock there and ruin the market for both print and ebooks from other vendors.

Mercurial genius Steve Jobs met with them and allegedly colluded with them to switch to a commission-based model: publishers set the e-book rates, not vendors, with vendors like Apple retaining a 30% guaranteed profit off the sales.e-books are more consistently $12.99-$14.99, rather than Amazon’s original price of $9.99.

So on the one hand, customers have suffered, paying a few extra bucks per e-book than they would have been had the alleged collusion not happened.

One the other hand, non-Amazon retailers would surely have suffered without it, resulting in a longer-term loss of choice for book consumers. And writers would have suffered, receiving fewer royalties for their work.

The publishers appear to be doing a little worse under the agency model, according to the Wall Street Journal.

My question about this is not a legal question, about which I am completely out of my depth. But I assume that legally, the question is about whether or not the defendants colluded. The evidence will be about the meetings, the content of the meetings, the extent of secrecy about the meetings, etc. Once we’ve gotten to that point, I’m not going to get worked up.

Instead, what’s most important to me is how to best preserve reading culture. E-books, print books, libraries, online vendors, storefronts: I’m pretty cool with all of them (notwithstanding previous post about how I am more concerned with the storefront’s survival than with Amazon’s or Apple’s.) This lawsuit against publishers may threaten their ability to thrive.

And while I’m not a fan of price-fixing, consumer exploitation, and the like, I do believe that sometimes, if one can afford it, it’s worthwhile to pay full price for something one wants to see more of.

So what result of this lawsuit would be best for writers, readers, and the businesses that facilitate the miraculous connection between them?

Frankly, on that, I’d go with the publishers. I trust them more than I trust Amazon or the Department of Justice to best facilitate bookishness.

So I’m hoping that whatever the result of this lawsuit, publishers aren’t further punched in the gut.


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