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July 27 2012

Publishing News: Self-publishing to be the option of first resort?

Here are a few stories that caught my attention this week in the publishing space.

Self-publishing disruption

Suw Charman-Anderson at Forbes began running an interview series with Smashwords’ founder Mark Coker this week. The first in the series addressed the disruption of self-publishing in the traditional publishing world. Coker says the traditional publishing model is going to be turned upsidedown, that “self-publishing is going from the option of last resort to the option of first resort.” He notes that self-publishing often has had an associated stigma while traditional publishing has not, but says “over next few years we’re going to see that reverse.”

Coker also argues the disruption to traditional publishing isn’t only going to come from outside the traditional ecosystem:

“We’re also going to see a mass defection of some of the best traditionally published authors. This has already started to happen among primarily mid-list authors, who do reasonably well and then their books go out of print. A lot of those authors are republishing their back catalogues as self-published ebooks, and they are earning more money, enjoying more creative freedom, and having more fun than they did working under the thumb of traditional publishers.”

The disruption is becoming apparent in the sales of indie books, Coker says. He points out that “if you look at the top sellers on Barnes & Noble or Amazon, indie authors are appearing more frequently in their bestseller lists. They’re starting to dominate and take significant sales away from traditional publishers.”

In the second part of the interview series, Charman-Anderson talks with Coker about marketing. He says that “marketing is not as important as people think it is” and that writing a high-quality book is “the best marketing an author can do.” He notes that marketing is important for building a platform, but argues that investment in quality trumps investment in promotion:

“If you’re getting ready to release your book and you have $3,000 burning a hole in your pocket, and you can either invest that in a marketing campaign or editing, I’d say invest it in editing. It’s all about writing a book that sells itself.”

Both series installments are well worth the read and can be found here and here. Charman-Anderson writes that the next interview in the series with Coker will address book pricing and length.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

DOJ’s response a bit “snippy”

The DOJ filed a 66-page response (PDF) to the 868 comments it received in regard to its antitrust lawsuit against Apple and five major publishers and the proposed settlement for Hachette, HarperCollins and Simon & Schuster. Jim Milliot at Publishers Weekly reports that “the Department of Justice has determined that the proposed ‘final judgment’ provides ‘an appropriate and effective remedy’ for the antitrust violations alleged in its complaint ‘and therefore is in the public interest.’” Milliot says the response addressed arguments that the lawsuit is feeding into an Amazon monopoly, calling them “highly speculative at best.”

John Mutter at ShelfAwareness took an in-depth look at the response as well and noted:

“The Justice Department also implied that its suit has already resulted in positive changes in the industry, saying that since the proposed settlement was announced, ‘more companies are investing to enter or expand in the market and compete against Amazon, Apple, and other e-book retailers.’ It cited Microsoft’s investment in Barnes & Noble and tablet computers that will be launched by Microsoft and Google.”

Philip Elmer-DeWitt at CNNMoney called the response “overheated” and “snippy,” offering several examples, including:

“It uses highly charged language — ‘seismic shift,’ ‘hobbling retailers,’ ‘unfettered competition’ — yet insists that Apple’s arguments be ‘stripped of [their] rhetoric’ before it declares the company wrong, wrong, wrong on every point — as near as I can tell — of antitrust law.”

Elmer-DeWitt writes that in all fairness, he’d be defensive, too, “if public comments were running at better than 10 to 1 against me and I’d been just excoriated on the Wall Street Journal’s Op-Ed page in the middle of an election year by one of the President’s most powerful allies in the Senate.” You can read more from his insights here.

Why didn’t I think of that?

There were a couple of stories for the impressive ingenuity file this week. Writer and media inventor Robin Sloan wrote a book review of Ellen Ullman’s 1997 memoir Close to the Machine as part of his Summer Reading series. In and of itself, a smart review from Robin Sloan isn’t surprising, but the book is a programmer’s memoir, so Sloan wrote it in JavaScript — the review is an interactive program. You can participate in the book review in his blog post.

NFC technology made an appearance in publishing news this week as well. NFC already is spilling into publishing technology, with B&N preparing to include it in the Nook, and this week, German design studio Razorfish demonstrated its application to ebook distribution — through a gumball machine. Matthew Humphries reports at Geek.com:

“The modified machine uses a Galaxy Tab as a display, two Arduino microcontrollers, and an NFC reader embedded in the front to allow delivery of the paid-for digital content. The user simply selects the content they want using the touchscreen (be it an app, movie, ebook, or music track), inserts a coin, turns the handle, and holds their device up to the NFC reader to have the content transferred.”

The NFC Gumball Machine is demonstrated in the following video:

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News tips and suggestions are always welcome, so please send them along.

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June 01 2012

Publishing News: HMTL5 may be winning the war against apps

Here are a few stories that caught my attention in the publishing space this week:

The shortest link between content and revenue may be HTML5

HTML5 LogoA couple weeks ago, MIT Technology Review's editor in chief and publisher Jason Pontin wrote a piece about killing their app and optimizing their website for all devices with HTML5. That same week, Lonely Planet's Jani Patokallio predicted that HTML5 would nudge out the various ebook formats. This week, Wired publisher Howard Mittman shot back in an interview with Jeff John Roberts at PaidContent, insisting that apps are the future, not HTML5.

Roberts reports that "[Mittman] believes that HTML5 will just be part of a 'larger app experience' in which an app is a storefront or gateway for readers to have deeper interactions with publishing brands." I'm not sure, however, that readers need yet another gateway (read: obstacle) to their content, and recent movements in the publishing industry suggest HTML5 may be the more likely way forward.

This week, Inkling founder and CEO Matt MacInnis announced the launch of Inkling for Web, an HTML5-based web client that brings Inkling's iPad app features to any device with a browser. The app and HTML5 technology in this case are intertwined — all content previously owned in the app can now also be accessed via the web, and activity will sync between the app and the web, so notes made on the web will appear in the iPad app and vice versa. MacInnis says in the announcement that the launch is a big part of the company's overall vision to provide service to anyone on any device they choose, one of the major benefits of choosing HTML5 technology.

Also this week, OverDrive announced plans to launch OverDrive Read, an open standard HTML5/EPUB browser-based ebook platform that will allow users to read ebooks online or offline, without having to install software or download an app. Dianna Dilworth at GalleyCat reports on additional benefits for publishers: "Using the platform, publishers can create a URL for each title. This link can include book previews and review copies, as well as browsing capabilities and sample chapters."

In the end, it will all come down to what it always comes down to: money. Roger McNamee's latest piece, "HTML 5: The Next Big Thing for Content," takes a very thorough look at HTML5 in general and specifically in relation to content publishing (this week's must-read). As to money, this excerpt stood out:

"The beauty of these new [HTML5] 'app' models is that each can [be] monetized, in most cases at rates better than the current web standard. Imagine you are reading David Pogue's technology product review column in the New York Times. Today, the advertising on that page is pretty random. In HTML 5, it will be possible for ads to search the page they are on for relevant content. This would allow the Times to auction the ad space to companies that sell consumer electronics, whose ads could then look at the page, identify the products and then offer them in the ad."

As it becomes more and more likely that ads will be incorporated as a revenue stream in ebooks, publishers will embrace whatever technology draws the shortest line and the most avenues between content and revenue, which at this point is looking more and more like HTML5.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

MIT students present news reporting solutions

MIT Media Lab students were busy this week presenting final projects for their "News in the Age of Participatory Media" class. Andrew Phelps at Nieman Journalism Lab highlighted a few of the interesting projects, which were required to address a new tool, technique, or technology for reporting the news. One student proposed modernizing the hyperlink by attaching semantic meaning to it; another suggested a Wiki-like idea for correlations to put impossibly big numbers — the $15 trillion U.S. national debt, for instance — into context for readers.

The growing importance of data journalism makes another student's suite of tools called DBTruck particularly interesting. As Phelps explains, users can "[e]nter the URL of a CSV file, JSON data, or an HTML table and DBTruck will clean up the data and import it to a local database." The tools also let you compare arbitrary data to provoke deeper insights — in testing, the student discovered a correlation between low birth weights and New York state communities with high teen pregnancy rates, a connection that might not have been otherwise discovered.

Penguin and Macmillan deny participation in an illegal conspiracy

Publishers Penguin and Macmillan responded this week to the Department of Justice's (DOJ) antitrust lawsuit filed earlier this year against the two publishers and Apple (Apple responded to the lawsuit last week).

The New York Times reports that in Penguin's 74-page response (PDF), it "called Amazon 'predatory' and a 'monopolist' that treats books as 'widgets.' It asserted that Amazon, not Penguin, was the company engaging in anticompetitive behavior, to the detriment of the industry."

Laura Hazard Owen called Macmillan's 26-page response (PDF) "shorter and more fiery" than Penguin's. She reports:

"'Macmillan did not participate in any illegal conspiracy,' Macmillan's filing says, and 'the lack of direct evidence of conspiracy cited in the Government's Complaint is telling…[it is] necessarily based entirely on the little circumstantial evidence it was able to locate during its extensive investigation, on which it piles innuendo on top of innuendo, stretches facts and implies actions that did not occur and which Macmillan denies unequivocally.'"

Related:

May 25 2012

Publishing News: Kindle Fire and "your ad here"

Here's what caught my attention this week in the publishing space:

Kindle Fire home screen may be for sale

Kindle FireRumors flew this week saying Amazon plans to launch an ad campaign in which it will sell ads on its Kindle Fire home screen. Jason Del Rey at AdAge reports:

"Amazon is pitching ads on the device's welcome screen, according to an executive at an agency that Amazon has pitched. The company has been telling ad agency execs that they must spend about $600,000 for any package that includes such an ad.

"The ad campaigns would run for two months and also include inventory from Amazon's 'Special Offers' product. For $1 million, advertisers would get more ad inventory and be included in Amazon's public-relations push, according to this executive and an exec at another ad agency.'"

Del Rey says that "[b]oth agency executives have so far declined to participate, citing several concerns. For one, Amazon isn't guaranteeing the number of devices that the welcome-screen ads will reach, telling agencies that it hasn't decided whether the ads will start popping up on devices that have already been purchased or just on new devices."

O'Reilly GM and publisher Joe Wikert assessed the situation on his Publishing 2020 blog. He says this is just the beginning and that other ebook retailers are going to suffer:

"Given that Amazon's goal is to offer customers the lowest prices on everything, what's the next logical step? How about even lower prices on ebooks where Amazon starts making money on in-book ads? Think Google AdWords, built right into the book ... At some point in the not too distant future I believe we'll see ebooks on Amazon at fire sale prices. I'm not just talking about self-published titles or books nobody wants. I'll bet this happens with some bestsellers and midlist titles too. Amazon will make a big deal out of it and note how these cheaper prices are only available thru Amazon's in-book advertising program. ... Imagine B&N trying to compete if a large portion of Amazon's ebook list drops from $9.99 to $4.99 or less. Even with Microsoft's cash injection, B&N simply doesn't have deep enough pockets to compete on losses like this, at least not for very long."

Wikert concludes by asking: "Why wouldn't Amazon follow this strategy, especially since it helps eliminate competitors, leads to market dominance and fixes the loss leader problem they currently have with many ebook sales?"

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

Apple calls foul on the DOJ

Apple this week filed a reply to the Department of Justice's antitrust lawsuit that was filed in April against Apple and five major publishers. PCWorld reports:

"Apple's reply to the court is in line with a statement issued by Apple in April after the DOJ filed its case, in which it said that 'the launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry.' The company added: 'Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore.'"

The filing, entitled "APPLE INC.'S ANSWER," opens:

The Government's Complaint against Apple is fundamentally flawed as a matter of fact and law. Apple has not 'conspired' with anyone, was not aware of any alleged 'conspiracy' by others, and never 'fixed prices.' ... The Government sides with monopoly, rather than competition, in bringing this case. The Government starts from the false premise that an eBooks 'market' was characterized by 'robust price competition' prior to Apple's entry. This ignores a simple and incontrovertible fact: Before 2010, there was no real competition, there was only Amazon.

Reuters reports that in the filing, "Apple also denied that the government 'accurately characterized' the comment attributed to [Steve] Jobs." The DOJ's complaint (PDF) states:

"77. Apple understood that the final Apple Agency Agreements ensured that the Publisher Defendants would raise their retail e-book prices to the ostensible limits set by the Apple price tiers not only in Apple's forthcoming iBookstore, but on Amazon.com and all other consumer sites as well. When asked by a Wall Street Journal reporter at the January 27, 2010 iPad unveiling event, 'Why should she buy a book for ... $14.99 from your device when she could buy one for $9.99 from Amazon on the Kindle or from Barnes & Noble on the Nook?' Apple CEO Steve Jobs responded, 'that won't be the case .... the prices will be the same.'"

Apple's filing responds:

Apple denies the allegations of paragraph 77. The Government mischaracterizes on its face the alleged statement of Steve Jobs to the press on January 27, 2010, which simply conveyed that a publisher would not have a particular eBook title priced at $9.99 through one distributor and $14.99 through another. Apple's MFN provision would allow it to require the publisher to lower the price to $9.99 on the iBookstore. Apple had no contractual rights to require a publisher to require that it, or any distributor of its products, charge more for eBooks than it chose in a competitive market." [Reference link added.]

You can read Apple's reply in its entirety at Scribd.

It's time to hack digital covers

Hack the CoverCraig Mod (@craigmod) mused on book covers recently in a piece on his website called "Hack the Cover," which also is available as a Kindle Single. He says the way we search for and discover books has changed:

"The covers ... on Amazon.com are tiny on the search results page. Minuscule on new books page. And they're all but lost in the datum slush of the individual item pages. Great covers like Mendelsund's design for The Information disappear entirely.

"Why? Because — What do we now hunt when buying books? Data.

"The cover image may help quickly ground us, but our eyes are drawn by habit to number and quality of reviews. We’re looking for metrics other than images — real metrics — not artificial marketing signifiers. Blurbs from humans. Perhaps even humans we know! And within the jumble of the Amazon.com interface, the cover feels all but an afterthought."

Mod argues that since readers can approach a book from any number of entry points, the entire book should be viewed and treated like a "cover":

"The covers for our digital editions need not yell. Need not sell. Heck, they may very well never been seen. The reality is, entire books need to be treated as covers. Entry points into digital editions aren't strictly defined and they're only getting fuzzier. Internet readers don't casually stumble upon books set atop tables. They're exposed through digital chance: a friend tweeting about a particular passage — and linking, directly, into that chapter ... To treat an entire book as a cover means to fold the typographic and design love usually reserved for covers into everything. Type choices. Illustration styles. Margins and page balance."

Mod's piece is a must read this week.

Related:

May 18 2012

Publishing News: No dismissal for Apple, Macmillan and Penguin

gavel.pngThis week brought a couple of important updates in the lawsuits against Apple, Macmillan and Penguin. First, the antitrust lawsuit filed by 16 States' Attorneys General saw 17 more states jump in, and several new details came to light as previously redacted content was made public in the amended complaint. Laura Hazard Owen takes a look at the highlights over at PaidContent, including how the Big Five got holdout publisher Six to get on board:

"E-mails to Barnes & Noble: Once five publishers and Apple had enacted agency pricing, the complaint says the five publishers 'worked together to force' Random House to adopt it as well. On March 4, 2010, in an exchange also identified in the DOJ's filing, Penguin CEO David Shanks sent Barnes & Noble's then-CEO Steve Riggio an e-mail reading in part, 'Random House has chosen to stay on their current model and will allow retailers to sell at whatever price they wish ... I would hope that [Barnes & Noble] would be equally brutal to Publishers who have thrown in with your competition with obvious disdain for your welfare ... I hope you make Random House hurt like Amazon is doing to people who are looking out for the overall welfare of the publishing industry.'"

Jane Litte over at Dear Author has a thorough analysis of the amended complaint as well, and also covers the second important lawsuit update of the week: U.S. District Judge Denise Cote denied Apple, Penguin, and Macmillan's motion to dismiss the civil class action lawsuit. Litte offers highlights and analysis of both the amended complaint in the states' lawsuit and from Judge Cote's opinion. She says the emphasis on "windowing" — holding back ebook versions of hardcover books in order to sell more of the higher priced editions — is "genius of the DOJ/States' Attorneys General to argue because it sets a pattern of concerted behavior regarding price controls." Litte concludes:

"I think that the defendants (Apple, Penguin and Macmillan) have two options here. Settle now or take their slim chances to jury where I am convinced they will lose and hope that the 2nd Circuit slaps down Judge Cote's per se finding on appeal."

Litte's post is a must-read this week. She also will talk more about the DOJ/States' Attorneys General lawsuits with Kat Meyer on today's Follow the Reader discussion at 4 p.m. eastern on Twitter. You can join in at #followreader.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

The anti-piracy holy grail?

What if piracy on the Internet could be shut down? That's what Russian-based startup Pirate Pay is aiming to accomplish. The company, which was partially funded by a $100,000 investment from the Microsoft Seed Financing Fund, is targeting its technology at file sharing on BitTorrent. TorrentFreak reports:

"[Pirate Pay] has developed a technology [that] allows them to attack existing BitTorrent swarms, making it impossible for people to share files ... The company doesn't reveal how it works, but they appear to be flooding clients with fake information, masquerading as legitimate peers."

Company CEO Andrei Klimenko talked a bit more in-depth in an interview at Russia Beyond the Headlines:

"It was not so hard to do from inside an I.S.P.'s network. But to turn the technology into global service, we had to convince all I.S.P.s to acquire our solution. This is, what someone could call, mission impossible. So to create a global service, we had to find the way to do it from the cloud. So we needed money for development."

That's where Microsoft came in. In the interview, Klimenko describes the success of the group's first project, protecting the film "Vysotsky. Thanks to God I'm Alive" after its release in December:

"We used a number of servers to make a connection to each and every p2p client that distributed this film. Then Pirate Pay sent specific traffic to confuse these clients about the real I.P. addresses of other clients and to make them disconnect from each other. Not all the goals were reached. But nearly 50,000 users did not complete their downloads."

Whether or not the technology will continue to work in the long term is questionable. The BBC reports: "[University of Cambridge security researcher Richard Clayton], who blogs about such issues, said peer-to-peer networks would eventually adapt, sharing information about 'bogus' peers such as those reportedly utilised by companies like Pirate Pay."

"News you read is different than news you say you read"

In a post at at AdAge Digital, Steve Rubel mused this week on digital media, social sharing and news consumption. Inspired after an executive briefing at Fairfax Media's headquarters in Sydney, he writes:

"'News you read is different than news you say you read,' said Darren Burden, general manager-news and digital publishing for Fairfax, one of Australia's largest companies. The former is driven by what you want or need to know, and the latter by what you want your friends to think.

"Just like that, Burden nailed the psychology that drives subconscious and routine behaviors in the digital age. The media get it. They know that as social networks become a primary pathway to content, news that's crafted to find you must indeed be different from news that's intended for you to find.

"Few companies can execute both styles equally well, however, and the result is a stylistic continental divide as newsrooms tilt toward one or the other."

Rubel's analysis of how various brands are wrestling with the issue is an interesting read. He concludes that content producers are going to need to be "adept in both styles to create the resonance required to stand out in an age with too much content and not enough time."

Related:

April 20 2012

Publishing News: Dropping DRM may be too little, too late

Here are a few stories that caught my eye in the publishing space this week.

Giving up the DRM

ChainsLocks.pngIn the aftermath of the DOJ lawsuit, much has been written about what publishers need to do next if they're going to survive in the face of Amazon's increasingly powerful position, and the issue of dropping DRM is a recurring theme. Mathew Ingram at GigaOm argues that publishers first need to realize they're partially responsible for the locked-in position in which they're finding themselves and then realize they hold the key to breaking free: drop DRM. Ingram says that not only is it unlikely that DRM is fulfilling its intended purpose of preventing piracy, but that it's having an unintended consequence of hindering sales:

"What these chains and locks do, more than anything else, is to make the simple act of buying and reading a digital book horrendously complicated. Does that make more people want to buy and read e-books? It's hard to see how. In a very real sense, those locks are hobbling the industry."

Author Charlie Strauss also addresses the issue of DRM in a post about how and why Amazon has been able to establish itself so well in the marketplace. Strauss goes into a lot of interesting background and in-depth detail (his post is a must-read for this week), but he succinctly sums up Amazon's strategy: "Amazon seems to be trying to simultaneously establish a wholesale monopsony and a retail monopoly in the ebook sector." And, he explains, publishers' death grip on DRM played right into Amazon's best possible scenario: "By foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers — and thereby empowered a predatory monopsony."

Adrian Kingsley-Hughes over at ZDNet writes that "frightened publishers" will certainly bring an end to DRM in a desperate attempt to survive, but that it's "too little, too late" and that it won't make a dent in Amazon's position — or Apple's, for that matter:

"[Amazon and Apple] are far too popular (and, by the majority of customers, well loved) for the removal of DRM to make a difference ... On the whole, consumers don't care about DRM, and removing DRM from e-books won't open up the market in the way that publishers hope it will. What Amazon and Apple have done with Kindle and iBooks respectively was not invent e-books, but refine how the content was consumed."

Kingsley-Hughes argues that the only way for publishers to have a shot now is to band together: "Unless the publishers can come up with their own one-stop shop for e-books, make this as easy to use as Amazon or Apple's offering, get this outlet onto devices that people use, and then come up with compelling reasons why people should choose to use it over other outlets (the hard part), nothing will change."

That may be true, but I have to agree with Ingram's argument that "at least [dropping DRM] would give publishers a chance to be more flexible and adaptable, instead of trying to prop up their failing business model with price-fixing."

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

A textbook case to settle first doctrine questions

The U.S. Supreme Court has agreed to weigh in on a first sale doctrine case, Kirtsaeng d/b/a Bluechristine99 v. John Wiley & Sons Inc., involving textbooks that were purchased in Thailand and resold in the U.S. A post at The Wall Street Journal (WSJ) describes the case:

"At issue are lower court rulings that found an entrepreneurial college student liable for copyright infringement for reselling foreign-edition textbooks on eBay. Supap Kirtsaeng asked friends and family in Thailand to buy copies of the textbooks, where they were cheaper. He says he resold them in the U.S. and used the profits to help pay for his U.S. education.

Textbook publisher John Wiley & Sons Inc. sued Kirtsaeng and won a $600,000 copyright infringement judgment against him."

The question before the Supreme Court boils down to whether or not the first sale doctrine applies to goods produced outside the U.S. As a post at Bloomberg BNA notes, "the goods in the Kirtsaeng case were not originally made in the United States." Implications of the decision will likely affect most categories of resale goods, including books, music, and software, but according to the WSJ post, retailers warn that the decision "could threaten companies that resell foreign-made goods and lead to higher prices for consumers. Retailers noted that many products they sell are first produced and procured from abroad."

The issues in this case reach back to unresolved questions from a Supreme Court case in 2010 involving Costco Wholesale Corp. that ended in a 4-4 tie — Bloomberg BNA has extensive background detail on both cases here. Reports indicate the Supreme Court will hear arguments in the fall.

Apple will seek validation in court

gavel.pngOn the heels of sending "possible commitments" to settle the antitrust lawsuit with the European Commission, Apple decided that versus the U.S. Department of Justice (DOJ), it wants its day in court. Reuters reports:

"'Our basic view is that we would like the case to be decided on the merits,' Apple lawyer, Daniel Floyd, told U.S. District Judge Denise Cote. 'We believe that this is not an appropriate case against us and we would like to validate that.'"

Sara Forden at The Washington Post writes that Apple's best defense may hinge on whether or not it was present during the publisher meetings in Manhattan where the alleged collusion is said to have taken place. Forden reports: "The maker of the iPad will need to show it negotiated pricing arrangements separately with each of the five publishers named in the Justice Department’s lawsuit, avoiding group gatherings such as those in The Chef's Wine Cellar at Picholine described in the government's complaint, antitrust lawyers said." An antitrust specialist also told Forden that Apple could "argue it was providing an alternative to the near monopoly Amazon won with low margins and deep discounts."

The next hearing is scheduled for June 22.

In other antitrust lawsuit news, litigation border hopped again, this time into Canada. According to a report at The Globe and Mail, the Vancouver firm Camp Fiorante Matthews Mogerman filed a class-action lawsuit in B.C. Supreme Court against Apple, Hachette Book Group Inc., HarperCollins Publishers Inc., Holtzbrinck Publishers LLC, conducting business as Macmillan Publishers Inc., Penguin Group, Simon & Schuster, and their Canadian subsidiaries. The lawsuit alleges a"'conspiracy' to lessen competition and 'fix, maintain, increase or control the prices of e-books," according to the report. Reidar Mogerman, the lawyer who filed the lawsuit, told The Globe and Mail, "The U.S. case isn't going to cover Canadian consumers. So it's the same underlying facts, it's the same consumer protection agenda, but it is for different consumers in a different country."

For a comprehensive roundup of post-DOJ-lawsuit coverage, check out Porter Anderson's (@porter_anderson) latest Writing on the Ether column. For an overview of the publishing chaos in general, including industry issues with the DOJ lawsuit, Google and libraries, check out this story from The Atlantic.

Photo (top): chained by Colin-47, on Flickr

Photo (bottom): English: Gavel, on Wikimedia Commons

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Reposted bydatenwolf datenwolf

April 17 2012

The anchor on ebook prices is gone. Now we'll see where they float

The publishing space remains abuzz in the aftermath of the Department of Justice (DOJ) lawsuit filing last week against Apple and publishers Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin. Much remains to be seen on how the suit will play out with Apple, Macmillan and Penguin (as the others have settled), and how the Big Six will now respond in relation to Amazon.

For a wider view and some insight into what needs to happen next for publishers to survive the tumult, I reached out to Don Linn, president at Firebrand Associates. Our interview follows.

What is the big-picture view of the DOJ lawsuit?

Don_Linn_Headshot.jpgDon Linn: The combination of the lawsuit, circumstantial evidence that's been revealed, and settlements by several of the parties, is a very big event. The point I think has been missed in much of the discussion is the perception that the agency model — and the alleged collusion that had led to it — affected consumers negatively via higher prices. The price umbrella agency effectively created benefitted only the alleged co-conspirators. That's something that never makes anti-trust enforcers happy.

The circumstantial evidence certainly suggests the DOJ had grounds for pursuing an action. "Double deleting" emails is pretty damning, among other things. The fact that three parties have settled, while legally having no effect on the others, clearly weakens the case of the remaining defendants, at least in public, that something happened. We will look back on this as an important date; the date that ebook prices once again were allowed to float. And things seldom float upward.

I'm not an attorney, but I believe that Macmillan, Penguin and Apple have a very difficult legal battle ahead. One I doubt they can win.

Does this strengthen Amazon's position in the marketplace?

Don Linn: Amazon's already dominant position has been further strengthened as their ability to set low prices locked into the Kindle ecosystem should only grow their share of the market. Whether this is a good thing for publishers over time remains to be seen, but most readers will cheer short-term price declines and Amazon's superior customer experience.

Cory Doctorow and others have argued that the DOJ has missed the point with this suit, saying that the DRM lock-in is the bigger anti-competitive threat. Over time this may prove to be true. However, when consumers benefit, regulators can claim a victory.

What do publishers need to do now?

Don Linn: Clearly, the most important thing for those who have settled is to get into — and stay in — compliance with the agreement. Additional legal battles are in no one's interest, which is why I was surprised that two publishers chose to fight.

Separately, the Big Six and others have to determine whether low prices are their enemy and by extension whether Amazon's low pricing is sustainable for them. The choices are pretty stark: either withhold content from Amazon until acceptable terms can be agreed upon, or further adapt business models to adjust to lower pricing. I would expect to see major pushback from the Big Six on Amazon, and some may take IPG's approach of trying to hold out.

Whether that strategy can be successful is questionable, but it may be the only viable approach if they don't believe lower prices can work. If the publishers yield to Amazon, consumers should hope they could — as Mike Cane has argued — extract something in return ... perhaps Amazon's willingness to adopt EPUB as a way to loosen the lock-in.

What do you think readers will get out of this?

Don Linn: As I mentioned before, consumers get the immediate benefit of lower prices, though there are those who argue that Amazon, once it controls the market, will ultimately raise prices for their locked-in consumers. The DOJ may have inadvertently created a less competitive marketplace with this action, though I feel sure they will be back if Amazon or any other party misbehaves to the detriment of consumers.

This interview was edited for clarity.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

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April 13 2012

Publishing News: DoJ lawsuit is great news for Amazon

Here are a few stories from the publishing space that caught my eye this week.

Amazon does a little Snoopy dance

DoJSeal.pngThe biggest story this week was the U.S. Department of Justice (DoJ) filing a lawsuit against Apple and publishers Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin, accusing them of colluding over ebook prices. If you unplugged or dropped off-grid for the past several days, solid roundups and analyses can be found with Tim Carmody at Wired and Laura Hazard Owen at PaidContent, and you can read the complaint itself here (PDF).

Right off the bat, three publishers — Hachette, HarperCollins and Simon & Schuster — settled, and Macmillan and Penguin stood their ground. Amazon responded to the situation almost immediately as well:

"This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books."

Book publishing analyst Michael Norris told the New York Times: "Amazon must be unbelievably happy today. Had they been puppeteering this whole play, it could not have worked out better for them."

Apple finally responded yesterday. As reported by Peter Kafka at All Things Digital, Apple spokesman Tom Neumayr said:

"The DOJ's accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore."

Much discussion and analysis has ensued in the aftermath — and I'm sure it will continue in the coming days and weeks.

Some are purporting that even if the collusion between the publishers proves to be true, Apple might walk away squeaky clean. A report at CNET noted why this may be the case:

"One reason lies in the Justice Department's 36-page complaint, which recounts how publishers met over breakfast in a London hotel and dinners at Manhattan's posh Picholine restaurant, which boasts a "Best of Award of Excellence" from Wine Spectator magazine. The key point is that Apple wasn't present."

Bryan Chaffin at the Mac Observer argued that yes, collusion most probably occurred but that it will be a mistake to undo it: "Doing so will clear the way for Amazon to dump books below price, taking ever more share (and power) in the book industry — that is the greater anticompetitive threat."

On the flipside, Mike Cane argued on his xBlog that the suit didn't go far enough and that the DoJ needs to sue Apple again. In a letter sent to all of the Department of Justice attorneys listed in the antitrust suit papers filed, he said:

"The advantage iPhone and iPad owners have in using the iBooks app is that they can browse and purchase eBooks from within that app. It's a seamless customer experience.

By contrast, all eBook apps from competing eBook stores — such as those from Amazon, Kobo, Barnes & Noble, and others — cannot offer an identical shopping experience. They are disallowed by Apple. Apple has demanded from each of its iBookstore competitors a 30% cut of any purchases made using Apple APIs for what is called 'in-app purchasing.'

To me, this is every bit as much restraint of trade as the collusive price-fixing that made the Department bring Apple and its co-conspirators before the court for remedy."

Individual U.S. states have thrown in as well: 16 State Attorneys have filed suit, alleging that agency pricing cost consumers $100 million.

Earlier this week before any suits were filed, at least two of the Big Six publishers refused to sign new contracts with Amazon. It will be interesting to see how this all plays out and whether or not publishers are spurred into action to do more to prevent Amazon from totally monopolizing the market, such as dropping DRM.

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This chapter brought to you by ...

Just about a year ago, Amazon introduced an ad-supported Kindle at a reduced cost in exchange for the consumer enduring ads on the home and screen saver pages. Now, Yahoo has filed patent applications that indicate a plan to bring those ads directly into ebook content. A report at the BBC explained:

"The filings suggest that users could be offered titles at a variety of prices depending on the ads' prominence. They add that the products shown could be determined by the type of book being read, or even the contents of a specific chapter, phrase or word ... It suggests users could be offered ads as hyperlinks based within the book's text, in-laid text or even 'dynamic content' such as video. Another idea suggests boxes at the bottom of a page could trail later chapters or quotes saying 'brought to you by Company A.'"

From a revenue perspective, ads in ebook content makes all kinds of sense. From a reader perspective, I just hope there's always a price point for those of us who prefer to do our reading sans corporate sponsorship.

B&N one-ups Amazon

A close friend recently told me a story highlighting an issue with his Kindle: While reading in the car on a road trip, he had to give up his Kindle and resort to the Kindle app on his iPad to keep reading when it got dark. Maybe he should have waited and bought a Nook.

B&N introduced the Nook Simple Touch with GlowLight this week — the first e-ink device to employ light. Alexandra Chang described the device in a post for Wired:

"The GlowLight resembles B&N's flagship Nook Simple Touch — same 6-inch touchscreen display, same size and includes the same internal parts. The Nook Simple Touch with GlowLight, however, is slightly lighter at just 6.95 ounces, compared to the Nook Simple Touch's 7.48 ounces ... The GlowLight technology consists of LED lights located at the top of the Nook's screen and an anti-glare screen protector. The light is evenly scattered across the screen and is adjustable via the menu."

The timing of the release is interesting, as rumors surfaced last week that Amazon was readying a front-lit display for its Kindle device.

Seal: US-DeptOfJustice-Seal, on Wikimedia Commons

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February 08 2010

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