DoJ Investigates eBook Price Fixing 165
dave562 writes "The U.S. Justice Department's antitrust arm said it was looking into potentially unfair pricing practices by electronic booksellers, joining European regulators and state attorneys general in a widening probe of large U.S. and international e-book publishers. A Justice Department spokeswoman confirmed that the probe involved the possibility of 'anti-competitive practices involving e-book sales.' Attorneys general in Connecticut and, reportedly, Texas, have also begun inquiries into the way electronic booksellers price their wares, and whether companies such as Apple and Amazon have set up pricing practices that are ultimately harmful to consumers."
Re:About time (Score:5, Interesting)
Even that's not really the issue here. Apple can charge whatever they want for you to sell on their OS, though there could certainly be monopoly concerns (leveraging their mobile OS "monopoly" to gain an advantage in the ebook market?). The problem with agency pricing is that it's not an MSRP value. It's a price set by the publisher that cannot be changed. For example, a publisher can price a paper book at $15 but Amazon, Barnes & Noble, etc will often sell that book for $7 or less because they can. The MSRP is just what it says it is, a suggested price. But Amazon, Kobo, Sony, BN, etc cannot run a sale on an agency-priced ebook. This is why it is commonplace to see ebooks selling for a higher price (and often much, much higher!) than the exact same paper book. That's what the DOJ is investigating, and Apple's part of it because they were the ones who started the whole "agency pricing" crap in the first place.
What the publishers say... (Score:5, Interesting)
I've spoken to a few publishers about this sort of thing, and they've told me the following:
You are not and never have been paying for the cost of the book, but the words and the story contained within.
They've never explained why a hardback costs twice as much, though.
They need to charge as much as they do for the cost of a book because they have a number of overheads and they need to get back the advance they paid the author. There is a lot of risk involved in publishing a book, due to the subjective nature of storytelling.
Why pay advances at all? Isn't that basically just a form of credit? Apparently, a lot of books don't earn out their advance. This makes no sense to me, whatsoever. Why not just pay higher royalties quarterly, when you know what the book has actually made. This reduces your risk and allows you to invest the accrued money for a period before handing over the author's share.
If you self publish a book (that they didn't want to publish) then you are both impatient and doing the work of the Devil.
Sure, not every book needs to be published, but given that I've spent around $50 on crap books this year, I don't really think they should get their knickers in a twist over someone selling a book for $3. I'd rather pay $3 on a crap book, than $12. Also, what are they REALLY scared of?
The publishing industry is a really strange beast, that I'm sure which anyone has at one time worked within or tried to get published in probably knows. It's a bit of a circle jerk, with a lot of cliques and infighting. It's also somewhat fascist in places.
Re:"Real Cost" (Score:2, Interesting)
"The real cost of a book comes from people -- the author, editors, proof readers, cover artists, marketers, agents, researchers, people doing layouts, etc."
Good effort, but I feel we have an "Emperor's New Clothes" effect going on here.
Author: By definition the indispensible one.
Proof Readers: I'll skip that one, nothing that a spell check can't fix, and if the Author missed a "plot hole" ... issue a "patch!"
Editors: Cut this down by half. Take care of the Big Picture stuff and then do a major revision by the author for the Second Printing.
Cover Artists: Isn't there tons of Indie Artists out there on the web?
Layouts: What layouts? It's text on a e-Reader. Let people fiddle with the fonts and stuff. It's a Feature not a Bug!
As for Marketing and Agenting, if we just fix the copyright law instead, people could form their own markets instead.
Re:What the publishers say... (Score:5, Interesting)
Paying advances allows the author to actually pay their bills whilst working on the book. However, you'd expect publishers to offer authors other models that might result in a bigger overall payout for the author if the book is really successful (e.g. smaller advance/higher royalties or even no advance/even higher royalties) if the author is already wealthy enough not to need the money right away. It's also not clear what happens if the book doesn't sell enough to cover the advance - does the publisher swallow that or does the author have to pay it back? I guess it depends on the contract.
As for e-books, it's clear to anyone that e-books should cost less than the physical version - it *must* be cheaper to distribute the electronic version than the physical one. How much less is up to debate, but even a nominal amount (e.g. 10%) would at least encourage more e-book sales if nothing else. A good example of publishing greed this year is that the #1 Amazon book of 2011 was the Steve Jobs biography. amazon.com has the hardback at a decent $17.87 (basically half price) - the Kindle version is $20.67 - WTF! It's price-gouging on e-books lke that which puts people off buying them and they end up pirating them.
Re:zzzz (Score:4, Interesting)
The publisher also provides the marketing, editing, proofreading, typesetting, illustrations and quite a few other services that the author cannot provide themselves.
No, they don't. Publishers pushed editing off onto agents and writers years ago, proofreading costs about $100 even if you hire someone to do it rather than spend a few evenings doing it yourself, typesetting is irrelevant for an e-book, illustrrations, if you need them, can be bought from an artist, and the only marketing that a publisher does for a typical book is to try to get it into book stores, not to get readers to buy it.
While publishers are still essential if you want a print book in a lot of book stores, the kind of services the average publisher offers a new writer for e-books might cost the writer a couple of thousand dollars if they paid for it themselves. In return for that, they'll be handing 50% of the cover price of that e-book to the publisher forever, and from the 20% or so of the cover price the writer recieves, they'll have to give 15% to their agent.
Publishers simply cannot justify their existence financially at this point in time with the royalty rates they're offering writers. They're raking in the cash from e-books while the person who wrote the book has to work in Walmart to pay their bills.
Re:"Real Cost" (Score:5, Interesting)
Proof Readers: I'll skip that one, nothing that a spell check can't fix
Watt in the whirl ore ewe talking a boot? Dew knot truss yore spill chucker! That's what's wrong with most slashdot comments. A spell checker can't tell that your using the wrong word (yes, that was intentional). A spell checker doesn't know if you want to loose the dog or if you want to lose the dog. A spell checker won't tell you that your use of apostrophe's is retarded.
Take care of the Big Picture stuff and then do a major revision by the author for the Second Printing
I fucking HATE patches and the lazy bastards who issue them. Get it right the first time, damn it! If I'm paying full price for a book or an operating system the damned thing should WORK. You don't have to patch a new pair of jeans, do you?
Re:zzzz (Score:4, Interesting)
True.
But there's "want to make a lot of money" and then there's "stupid".
J/K/ Rowling refused (and so far as I know STILL refuses) to allow Harry Potter to go ebook, because she's afraid it will be pirated; hence it's one of the most pirated book series available on the torrent sites. It's the only way you can GET them.
Yup... still only available electronically for free. Can't pay for it if you want to.
http://news.yahoo.com/harry-potter-e-book-sales-postponed-until-2012-202829043.html [yahoo.com]