Xpost from LBN: Justice Dept pursuit of e-publishers on price fixing may make Amazon a monopoly

[sybylla]

LBN thread: http://www.democraticunderground.com/101495902

Amazon to Cut E-Book Prices, Shaking Rivals (making Amazon a Monopoly)
Source: New York Times

The government’s decision to pursue major publishers on antitrust charges has put the Internet retailer Amazon in a powerful position: the nation’s largest bookseller may now get to decide how much an e-book will cost, and the book world is quaking over the potential consequences.

As soon as the Department of Justice announced Wednesday that it was suing five major publishers and Apple on price-fixing charges, and simultaneously settling with three of them, Amazon announced plans to push down prices on e-books. The price of some major titles could fall to $9.99 or less from $14.99, saving voracious readers a bundle.

But publishers and booksellers argue that any victory for consumers will be short-lived, and that the ultimate effect of the antitrust suit will be to exchange a perceived monopoly for a real one. Amazon, already the dominant force in the industry, will hold all the cards.

“Amazon must be unbelievably happy today,” said Michael Norris, a book publishing analyst with Simba Information. “Had they been puppeteering this whole play, it could not have worked out better for them.”

Read more: http://www.nytimes.com/2012/04/12/business/media/amazon-to-cut-e-book-prices-shaking-rivals.html

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Upon learning that Amazon's once halted monopoly was cleared to go forward, they released this statement...

[bemildred]

1. Blind pigs fighting over a bucket of slops. nt

[Chan790]

2. It's going to backfire.

Any decent literary agent is going to know to explicitly retain and deny publishers e-book rights in order to protect the value of their client's IP. This price-fix was part of an understanding between content-producers and content-publishers to maintain reasonable price-parity with a lower overhead. Amazon just killed their golden goose...content producers don't need them as much as they need content producers.

This isn't going to as much create a monopoly as motivate publishing houses and IP-creators to kill the Kindle and Kindle-like products for lack of fresh content. Much like video-game consoles, e-book manufacturers sell units for a loss to recoup on sale of content for those units. Yes, the below-the-bar costs of that content is near-zero but you can't drive the sale of Kindles on content ranging from Treasure Island to Beowulf and other non-copyright material. Nobody's going to pay for content they can get from Project Gutenberg or pay for content that was previously-free. There's no way for someone like Amazon to keep giving away free content to drive unit sales to make that revenue up from the sale of fresh content when their access to fresh quality content is compromised.

If I write something and it's selling for $14 in paperback or $25 in hardcover, I might sell it myself through my own website as an e-book and take all the profits for myself or I might allow it to be sold on consignment at a price of my choosing but I'll be damned if I'm going to let Amazon undercut the value of my IP by discounting it on their site and pay me a pittance royalty. Mark my words that the counter-salvo will be the increase of royalty on e-content to artificially stabilize prices at near current levels...or the death of the e-book-reader.

[sybylla]

3. Thanks. Many of the thoughts you share are some I've had, but...

I'm not a published author. Yet. I was hoping authors who have published had some perspective on this.

[mainer]

4. No literary agents are able to retain e-book rights

it just isn't possible in this market, with all publishers demanding e-book rights as part of author contracts.

BUT publishers may soon start denying Amazon any rights to their contracted works. Publishers can simply sell e-books on their own websites, or two other non-Amazon online stores.