After Apple and other retailers started selling e-books on the agency model, prices on many best-selling and new books rose to the $12.99 to $14.99 range, infuriating many consumers.
“Who protected them?” [Justice Dept. lawyer] Mr. Buterman said.
“I did,” Mr. Cue said.
“By charging them higher prices?” Mr. Buterman said.
A must-read essay on the state of publishing from Judith Tarr, an author of 30 years
A HarperCollins analysis of its own figures confirms what the Guild has long pointed out–that when sales migrate from hardcover to digital, publishers’ profits rise at the expense of author royalties.
The author of this piece makes some interesting points, but I don’t agree that the digital version of a brand new hardcover should sell at $7.99, as he believes. I do, though, think publishers finally need to get serious about royalties and the proper pricing of ebooks. I continue to believe the biggest area for correction is with trade paperbacks.
The second day of the Apple e-book price-fixing trial continued with the government’s continued focus on Apple associate general counsel Kevin Saul, citing a stream of Apple correspondence it claims urged the Big Six publishers to force all their retail partners to the agency model. But it was the testimony of Penguin Group USA CEO David Shanks, looking less than happy under government questioning, who also reluctantly acknowledged a succession of e-mails and calls that appear to show Shanks, Penguin chairman John Makinson and other Penguin executives acting in concert with his fellow Big Six CEOs to use the move to the agency model to raise e-book prices above the $9.99 price point.
Under oath, Shanks acknowledged that he had referred to Apple as “a facilitator,” of the move to agency, pretty much the same claim the government makes in its charges against Apple. In a voice that seemed to grow more quiet, gravelly and hesitant as the day wore on, Shanks also reluctantly acknowledged that throughout negotiations over the agency model, Apple kept him updated on the number of publishers planning to make the switch—Penguin clearly demanded that the iBookstore have at least three major publishers before they would join—and he informed Apple of his plan to move all Penguin resellers (who, of course, are Apple’s competitors) to the agency model before those plans were revealed publicly.
The government said there were 100 phone calls among top executives of the publishing industry in the weeks leading up to Apple’s introduction of the iPad in 2010, when they had to decide whether to sign on to a deal with Apple that would raise the prices of e-books.
As the Department of Justice trial against Apple charging that the company was the “ringleader” in a conspiracy to fix e-book prices begins today in New York, all five publishers accused of conspiring with the company have settled their cases, although executives from those houses, along with officials from Random House, Apple and Amazon, are all expected to testify. In a pretrial hearing, judge Denise Cote, said she her “tentative view” is that the government will be successful in proving its charges. Indeed, in her written decision approving the first three publisher settlements, delivered in September, 2012, Cote deemed the matter a “straightforward price-fixing case,” and found “a sufficient factual foundation” to establish the conspiracy. And Apple’s case will hinge on much of that same evidence.
Sourcebooks has announced its acquisition of exclusive American trade paperback and e-book rights to all of L.M. Montgomery’s copyright protected works in the U.S.
