Tuesday, April 24, 2012

Kindle News: WSJ on flawed arguments of Big-5 publisher defenders

Wall Street Journal's Thomas Catan writes, "Critics of E-Books Lawsuit Miss the Mark, Experts Say"

The Passive Voice, a lawyer, summarizes the WSJ article and then links us to the FULL Wall Street Journal article, which few do, and that link may expire at any time so if you want to read the full article, get it now.

WSJ's Catan notes that what Eric Hellman calls the "nightmare narrative being spun by the publishing echo chamber" on behalf of "the Collusive 5 publishers" has been front and center the last week in a circling-wagons formation (with what seems shared boilerplate) decrying the DOJ action against the poor Big5 and the ebooks savior, Apple.  Here is some of what attorney Passive Guy excerpted yesterday from the WSJ article:
' But many experts say that under antitrust law, the department didn’t have much choice.  And even if it did, antitrust experts say, it is far from clear that doing nothing would have been wise.

U.S. antitrust law doesn’t seek to protect little companies against big ones, or even struggling ones against successful ones. Companies can grow as large as they want, as long as they do it through lower prices, better service or niftier innovations. Companies can even become monopolies, as long as they don’t get there illegally or try to extend their power by unlawfully stifling competition.

Companies under pressure from a more successful rival can’t band together to protect themselves, whatever their size.
“A lot of cartels are [composed of] small firms,” says Herbert Hovenkamp, law professor at the University of Iowa. “The criminal cases the Justice Department brings are often family firms—much smaller than these publishers.”
“Price fixing is kind of the first-degree murder of antitrust violations,” Prof. Hovenkamp says. “They don’t have discretion to just walk away from what appears to be a strong set of facts that, if true, are one of the most central of antitrust violations.”

The government might already have shown some leniency. For one, the Justice Department brought a civil, rather than a criminal, case, so no executives will go to prison...
But as disruptive as Amazon’s pricing may be to publishers, it isn’t illegal, experts say.

“What Amazon does may be harmful to the publishers, but so far it’s been very good for consumers,” says Spencer Waller, a law professor at Loyola University Chicago.
....the law is concerned with protecting competition, not competitors, experts say.  Cartels, for example, usually allow more players to coexist by enforcing higher prices.

The goal of antitrust policy is to protect consumer prices, Prof. Hovenkamp says. “It’s not to protect inefficient firms from having to exit the market.”

Mild-mannered Len Edgerly in an unusual, separate blog-posting that was not a podcast entry, at his The Kindle Chronicles Podcast site, pointed to the truly ludicrous column by David Carr for The New York Times, which described the Dept of Justice's action as akin to 'breaking up' "Ed’s Gas ’N’ Groceries on Route 19" (this would be the Big5 Publishers (!) and affecting even little B&N, apparently, which has put so many smaller book stores out of business).  He even refers to Apple as "a minor player in the realm of books" (more route-19-store fantasy -- the minor road-store that could, in one day, successfully encourage a jacking-up of e-book prices an average 50%, nation-wide, on new books, and, furthermore deny wee Random House space for its e-books for not cooperating on the Agency model.

 Big Bad Amazon vs the Gas 'N' Groceries on Route 19.  How do Carr and his editors publish a piece like that with straight faces.  They don't.  It's all about alignment and lack of any appropriate embarrassment when targeting readers they think are that gullible.  Edgerly mentioned other NYT articles of the same caliber and asked,as a 'loyal subscriber to the NYT's Kindle version, "Are ALL of the Times's objective [?], hard-hitting journalists in the pockets of New York publishers?"

The Wall Street Journal article is even stronger than described so far.  "Antitrust lawyers scoff at the notion that the Justice Department would refrain from bringing a case if it believes it has solid evidence."

  In fact, if you haven't, you should actually read the 36-page PDF with the FULL TEXT of the DOJ case against Apple and the Big5 publishers.  It's more eye-opening and truly riveting than most novels you'll buy.  It's also unbelievable at several points that the companies went as far as they did, even 'openly' requesting of one another that they hide what they were doing.

  Again, if you want to read the full WSJ article from yesterday, you should get it now while it's still available via the special email-sharing feature probably paid for by Passive Guy.

  It's interesting to see the photos of the CEOs behind each company after reading so much about them.

  Also, it has very sensible closing paragraphs.  What they describe is a business model that requests demands a form of public welfare from e-book consumers to protect the Big5 from the lower-profit margins they fear will be part of this digital age instead of focusing on how to restructure their businesses to DEAL effectively with the realities of the digital age.

I've gathered a lot of news lately, but will end this with just this one topic, as there is a lot of interesting reading involved in the DOJ case papers and, really, this affects, in a big way, those of us who are book readers via digital media.

  We're faced with a corporate mentality that would now deprive our public libraries of their new books in digital form for reading, with Penguin and others having voiced a need for "friction" in making it harder for anyone to borrow such a book (even if library reading has been shown to spur the general reading of authors and buying of books) so that, for instance, even if the library is an hour away, they should go there in person to borrow a book.  Four of the five publishers involved are not making their current new e-books available at public libraries at all now -- that's the depth of their fear of e-books and people who read them.

  Also, see Wired's Tim Carmody on DOJ Announces Terms of Settlement With Three Publishers in E-Book Suit.  He lists them and includes the proposed settlement doc.

Current Kindle Models for reference, plus free-ebook search links
Kindle Fire  7" tablet - $199
Kindle NoTouch ("Kindle") - $79/$109
Kindle Touch, WiFi
- $99/$139
Kindle Touch, 3G/WiFi - $149/$189
Kindle Keybd 3G - $189, Free, slow web
Kindle DX - $379, Free, slow web
Kindle Basic, NoTouch - £89
Kindle Touch WiFi, UK - £109
Kindle Touch 3G/WiFi, UK - £169
Kindle Keyboard 3G, UK - £149
  Keybd: w/ Free, slow 3G WEB
OTHER International
Kindle NoTouch Basic - $109
Kindle Touch WiFi - $139
Kindle Touch 3G/WiFi - $189
Kindle Keybd 3G - $189
  Keybd: w/ Free, slow 3G WEB

Check often: Temporarily-free recently published Kindle books
  Guide to finding Free Kindle books and Sources.  Top 100 free bestsellers.  Liked-books under $1
UK-Only: recently published free books, bestsellers, or £5 Max ones
    Also, UK customers should see the UK store's Top 100 free bestsellers.

  *Click* to Return to the HOME PAGE.  Or click on the web browser's BACK button

Below are ways to Share this post if you'd like others to see it.
-- The Send to Kindle button works well only on Firefox currently.

Send to Kindle

(Older posts have older Kindle model info. For latest models, see CURRENT KINDLES page. )
If interested, you can also follow my add'l blog-related news at Facebook and Twitter
Questions & feedback are welcome in the Comment areas (tho' spam is deleted). Thanks!


  1. You should read this editorial, also in WSJ yesterday:

    Such revisionist and selective history makes me a little crazy: the publishers were meeting with Apple at a time when Nook had only just launched. B&N entered the market before agency pricing and was not a party to that. Yet they are giving Apple and agency pricing credit for introducing and sustaining competition. Kobo was also well under way prior to agency pricing (launching in Jul 2010). Google was not yet selling books but had spent millions of dollars scanning books and converting them to ebooks, and been talking about their plans to provide a program for publishers to sell ebooks. So how much of this '30%' that Amazon lost is due to agency pricing, and how much just because some credible players entered into the market? Nobody can say for sure, but my guess is that agency pricing has not had an effect of more than a handful of percentage points.

    Conversely, it is not a given that return to wholesale pricing (for 3 of the 6 publishers) especially favors Amazon. Things have changed a lot since the fall of 2009.

    Critics of the DOJ action seem unclear about Amazon's use of $9.99 price point, as if Amazon was selling ALL books for $9.99 or less. That was never the case; Amazon has always made money selling ebooks.

    And they ignore the fact that in a world where smartphones and tablets dominate (even for e-reading), there is effectively no 'lock in'. Consumers are free to choose among any of several ebook vendors and do not need to leave their existing collection behind.

    1. It's definitely crazy-making, Tom, if one knows what the history has been but some, like CNN Money's latest today (another wagon added to the circle), seem bent on playing with reality and hoping people will believe it. These defenses lately are based on so many huge errors, one can wonder if they are that ignorant of the history of e-books or they just hope we all are. I do know it's making me angrier to read so many wilfully misleading story (they at least should know when they've not bothered to do any research) - the idea is just to get one particular 'story' out.

  2. Looking forward to Len's interview with Mike Shatzkin on TKC this week. Shatzkin seems a little more balanced and fact driven than most, but still seems unduly concerned about prospects for an Amazon 'monopoly' and sees dire implications for publishers/authors etc. But I don't see the DoJ action as really changing the trajectory of things. Amazon can't please all the people all of the time and while the market continues to expand there are plenty of opportunities for others to innovate and carve out a slice of the pie.


NOTE: TO AVOID SPAM being posted instantly, this blog uses the blogger.com "DELAY" feature.

Am often away much of the day, and postings won't show up right away. Posts done to use referrer-links may never show up.

Usually, am online enough to release comments within a day though, so the hard-to-read match-text tests for commenting won't be needed this way.

Feedback and questions are welcome. Thanks for participating.

Technical Problems?
If you're having problems leaving a Comment, Google's blogger-help asks that you clear the 'blogger.com' cookies on your browser's Tools or Options menu bar and that will fix the Comment-box problems (until they have a permanent fix).

IF that doesn't work either, then UNcheck the "keep me signed in" box -- Google-help says that should allow your comment to post (it's a workaround to a current bug).
Apologies for the problems.

TIP: There's a size limit. If longer than 3500 characters or so, in a text editor, make two posts out of it.

[Valid RSS]