Up to now, I’ve been confining my opinions on the lawsuit of the U.S. Justice Department versus Apple and the gang of five of the Big Six to my “News and Notices.”  While I’m definitely biased about this and my blog is basically op-ed, I started out thinking that this case is small potatoes compared to some of the bigger issues of our day.  Now I’m not so sure that the case is not a big, messy pommes de terre au gratin with lots of cheese where cleanup will be a challenge to any dishwasher, human or otherwise.

Let me elaborate on one compound word that is key here: price-fixing.  I didn’t quite understand where the government was coming from, but now I see the issues better.  Apple’s alleged behavior is ironically a 180-degree turn-around from their behavior with the music industry.  Steve Jobs’ company allegedly undercut record companies’ prices and forever changed the music industry.  What they allegedly offered to the Big Six publishers was a mechanism for the latter to avoid Amazon’s undercutting their prices—this is the agency model, where Apple agreed to sell eBooks at a publisher-determined price at their iStore as long as the publisher guaranteed that Amazon and every other online retailer couldn’t sell for less.  Amazon could sell the publishers’ eBooks (so they’re available for Kindle) but they couldn’t sell them for less (thus indirectly favoring the Kindle).

Before I get into legally nebulous territory here, for those legal-eagles reading this, let it be stated that in the above and the rest of this article the word “allegedly” is understood wherever it matters (I just know I’ll forget one otherwise).  This is so because the U.S. Justice Department has yet to prove the price-fixing.  Apple, flexing its muscles, has not caved (remember the days when they were just a company that sold overpriced and not very powerful hardware?—now they sell overpriced and powerful hardware made by cheap Chinese labor).  Three of the five publishers have caved.  I repeat: the irony is that Apple only wanted to protect itself from the same business model it unleashed against the music industry.  In that case, Apple was in control—they were selling their Nanos and iPod devices and their iTunes software.  They were the aggressor against the music industry.  In the eBooks case, Amazon is perceived to be the aggressor against Apple and the Big Six—at least, that’s the way the latter are portraying it.

Let’s analyze Amazon’s competitors a bit.  The Sony Reader is out of it—Sony is not doing well, period.  Whatever positives their reader has (as far as I know, it might be better than every other reader just as Betamax was better than VHS), they are out of the competition.  I see the market-share fight to be between Apple devices (iPads, iPhones, etc) and the copycat smart-phones and smart-tablets, B&N’s Nook, and Amazon’s Kindle.  I’ll write off the Nook since it’s tied to B&N and B&N is tied to the legacy publishing paradigm (their main raison d’être is to have their stores act as storage and sales units for Big Six hard bounds and paperbacks).  That basically leaves Amazon’s Kindle products versus Apple’s iProducts—two corporate behemoths duking it out in an extreme boxing match.

It’s natural that both of these industry giants also want to control the content.  The Big Six could have climbed into bed with either one.  They did so with Apple because Amazon is also a publisher, hence a direct competitor—I understand that Amazon now has its own publishing subsidiary.  The Big Six didn’t know which way to turn, but Steve Jobs et al stepped forward and convinced them to turn to Apple.  Now the Justice Department has stepped in and the publishers are in a bind because here’s what’s going to happen:  Apple will get its hands slapped and the remaining publishers who have not settled will pay (hopefully) huge fines.  The Justice Department will go away, both Apple and Amazon will start price-cutting the publishers’ eBooks, and the Big Six can do nothing about it—they’re back to square one.  They made a pact with one devil and now two will be fighting for their necrotic and pathetic souls.

However, there is something they can do.  They can pull out of the iStore and Amazon if they don’t like either of their pricing systems.  We all know that’s not a viable solution—both Apple and Amazon have spent millions setting up their online businesses.  The Big Six, already reeling from the digital publishing revolution, can’t afford new initiatives.  They are tied to the legacy publishing model and will go to their graves promoting it (eBooks will be the stake in the heart).  Moreover, they need Apple and Amazon to sell books.  They, in fact, need Amazon more than Apple, since the iStore doesn’t sell hardbounds or paperbacks.  Oops!  They forgot about that little detail in choosing that Apple that took them so far from the Garden of Eden.

Correction:  Not necessarily to their graves.  The Big Six and other publishers still can make mountains of money off school and college textbooks, just like they do now (although I can see an eBook market there where students just buy the chapters they need).  There’s also a niche for coffee-table books, art books, leather-bound classics, and so forth—the cache snob-appeal stuff for home and office decorators who don’t want to encourage real reading.  Nevertheless, they won’t make enough money from these niche sales to keep around all those editors, copy-writers, artists, agents, publicists, and book marketing experts that the old “sure bet” authors have come to enjoy (only authors with good name recognition need apply to the Big Six—through agents, of course).  Moreover, more and more of those “sure bet” authors will migrate to the indie publishing model because they can make more money that way.

What are all those out-of-work legacy-publishing people going to do?  Here’s one place: offering pro bono services to indie authors.  Many of their services are still needed but, except for the most essential, the indie author can’t lay out the money up front.  These services will have to go pro bono if they want to survive.  Once upon a time, a publisher would offer an author a publishing contract and a cash advance.  Royalty rates were often not an issue since many authors never covered their cash advance.  Contained in this publishing package was some experienced editing help (the stories of stubborn writers fighting with equally stubborn editors are legend), book design help including a spiffy cover (a process often transparent to the author—surprise, we put a topless woman on your cookbook’s cover!), and some publicity and marketing help (the quantity and quality of help depending on the author’s renown, of course—0%, if you’re risky; 100%, including TV ads and full-page ads in The Times if you’re a sure bet).  This fairy tale ended long before the financial implosion of 2008.

Today’s publishing reality show, known as the legacy publishing paradigm, is a bleak one for authors trying to participate.  First, as already stated, only “sure bets” need apply.  Most publishers are not willing to take risks with unknowns, even if an agent recommends them.  That layer, the agents as gatekeepers, has become less porous too.  Agents know publishers want only the “sure bets,” so that’s what they give them.  The rejection phrases like “We can’t use your work at this time” are nice(?) ways to say, “Go away, newbie—you’re not wanted or needed.”  Note that they don’t say that you can’t write.  They are just saying that they can’t take a chance on what you write (does that make you feel better?).  Even if you’re a sure bet, you still might not get much publicity and marketing help, and, if you’re “lucky” enough to reach that contract stage as a new or relatively unknown author, be sure your help will be minimum—surer bets soak up more of the advertising dollars these days as both TV and newspapers fight to stay relevant in an internet world.

The latter is an important point.  There’s no evil intent here on the part of the publishers or their agents.  They’re just fighting for survival, for one thing.  Moreover, they’ve erected this heavy infrastructure between writer and reader—someone has to pay for it!  The writer pays for it by not receiving the services and help he might need and adequate royalties; the reader pays for it by having to suffer with an effective censorship that eliminates new and exciting writers and places exorbitant prices on the books of the old standbys.  Thus, the brontosaurus that is legacy publishing is artificially kept alive even though it’s near comatose and on a feeding tube.

Who wins if the Justice Department gives Apple a slap?  You, dear reader, you’re a winner!  And you, indie author, you’re also a winner!  You, the reader, win because you can read the output from those “sure bets” at a decent price.  You might be able to buy a Baldacci, Connolly, and Patterson in the future for the same price you pay for that one Baldacci now.  You also win because the Big Six are not keeping you from new and exciting authors that might bring you fresh reading enjoyment.  Indie authors like me win because I have a chance to reach new readers and, if Amazon continues its present business model, I’ll receive a decent royalty in comparison to the pittance offered now by the Big Six, even if I was offered a contract.

Given that the publishing business should be about writers and readers and minimizing the bureaucratic crapola standing between them, I can’t see any downside about a strong Justice Department hands-slap to Apple and their publishing cohorts.  Maybe I’m naïve, but when I hear someone moaning and groaning about this lawsuit, I automatically ask myself what their agenda is.  I usually find out that the person is heavily involved in the legacy paradigm (agent, editor, publicist, book designer, bookstore owner, etc).  I can understand that this person has an axe to grind.  Well, I do too.  The digital paradigm’s axe is already sharper and will remain so, providing readers and writers with a wonderful freedom of choice at a reasonable price.

In libris libertas…

This entry was posted on Thursday, April 26th, 2012 at 4:00 am and is filed under Capitalism Without Control, Technology, Writing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.