Wednesday, June 2, 2010

Texas Atty General Questions E-book Publishers

Wall St. Journal reports that the Texas attorney general has approached two of the Big5 publishers -- Hachette Book Group and News Corp's HarperCollins.  The latter said they've received a request for documents, and they've declined further comment.  News Corp owns the Wall Street Journal.

  WSJ's Jeffrey A. Trachtenberg and Yukari Iwatani Kane point out that electronic book market pricing has been "shaken up by Apple Inc. and the way e-books are sold for the iPad."

  They add that the probe was reported earlier by the book-industry publication Publishers Marketplace, which said Apple was a target of the preliminary inquiry.  Both Apple and the Texas Attorney General's office declined to comment.
' ... One possible focus is Apple's e-book pricing and its impact on consumers.  Apple, in seeking to attract content for the iPad, opted for an agency pricing model in which publishers set their own retail prices and receive 70% of the price while sellers receive the remaining 30%.

The move boosted prices on some popular e-book titles.   Although some best-sellers are still sold at $9.99 -- the original norm on Amazon's Kindle reader -- many of the e-books written by leading authors are now priced at $12.99 or $14.99 as a result of Apple's move.

Five of the six major publishing houses have embraced the agency model, which reversed traditional practices in which retailers set the prices.
But antitrust agencies have been taking a closer interest in Silicon Valley companies in general, and Apple in particular. The Justice Department is making preliminary inquiries about Apple's practices in the music business, people familiar with the situation said last week. '
For more, see The Wall St. Journal story.

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