Nostalgia City Mysteries

By Mark S. Bacon

Tag Archives: Apple

News update:

Future of e-books muddled

Everyone’s jockeying for the best position in the complex, brave new world of e-book marketing.  And it appears that future book buying details, including the prices readers pay for books and the amount authors get paid, will be determined by corporate lawyers and judges.

Last month a federal judge ruled that Apple conspired with five of the leading publishers to raise the going price of e-books.

Reuters reported that U.S. District Judge Denise Cote in Manhattan found “compelling evidence” that Apple violated federal antitrust law by playing a “central role” in a conspiracy with the publishers to eliminate retail price competition and raise e-book prices.

Apple was accused of trying to erode Amazon’s dominant position in e-book sales causing some e-book prices to rise by $3 to $5 each.

The U.S. Justice Department hailed the verdict as a victory for book buyers.

At issue are “agency model agreements” where publishers set the price of books, rather than retailers.

In the “wholesale” model, publishers offer books to booksellers at roughly half the price the publishers set as the recommended retail price of a book.  Then the retailer is free to sell the book at any price, even below the wholesale price paid for the book.

Graham Spencer, writing in Macstories.net, explains that Amazon decided to sell some e-books below wholesale to gain a larger percentage of the market and to speed the sales of Kindles.  When Apple launched its online bookstore, Spencer says, it contracted with publishers using the “agency” model that authorizes publishers to set retail prices.

(This is an oversimplification of a complex process and Spencer has a detailed explanation of the e-book sales models in his article. )

The recent court decision overturned Apple’s agreements as a conspiracy with publishers to drive up prices.  The five publishers involved in the suit, HarperCollins, Hachette, Penguin Random House, Simon & Schuster, and MacMillan settled prior to the Apple verdict and were told by the court they would have to wait two years before entering into agency model agreements.

Presently the court is considering what form of penalty to impose on Apple.  Suggestions include forcing Apple’s bookstore to provide links to competitors.   A final resolution is in the works and Apple promises an appeal.

“Used” e-book sales

Although fraught with possibilities for the future of books and e-books, the Apple case is just a bump in the road compared with the likelihood that a market for “used” e-books will materialize.

According to Publishers Weekly magazine, a German district court recently ruled that digital books can’t be resold by purchasers.  The authoritative trade journal said the court ruled that books are not subject to “exhaustion of the rights of the author.”  Apparently the ruling means that e-books can only be resold with the permission of the author.

Earlier this year a U.S. federal judge ruled that ReDigi, a Massachusetts company, infringed on the rights of Capitol Records by facilitating the resale of digital music.  Regardless, according to Boston Magazine, Redigi is reportedly moving forward with plans to sell previously owned e-books in the U.S.

Reports Boston Magazine, “Legal issues aside, many analysts feel these markets are almost inevitable.”

Hyperlinks:

Reuters: Ruling says Apple violated antitrust law

Graham Spencer in Macstories.net  

Publisher’s Weekly

Boston Magazine  

Catching up on e-book fine print

Writer’s note:  Normally when I have a computer problem, I first assume it’s operator error.  Often, I’m correct.  Therefore I’m reluctant to blame anything other than forgetfulness on the absence of the following article from this blog.  I wrote it and intended it to be published two weeks ago.  Yesterday while approving a comment someone sent in for my previous post I noticed that this article was only listed in draft, rather than “published” form.  And as it was not available in the archive, and two readers report they did not receive it, I have to assume it did not appear.  As the saying goes, the editors regret the error.

—-

The corporate and legal wrangling over e-books would make a good mystery plot.  In fact, many aspects of the burgeoning e-book business are simply mysterious.   As the future of mystery fiction and flash fiction are tied to the advance of digital reading, this site has been making note of e-book developments.

In the past weeks, two events have hastened the broad availability of free, digitized literature: The last of the big six U.S. publishers joined the other five in agreeing to make their e-books available to public libraries and, a consortium of libraries and other organizations have launched a national digital public library.

Hachette joined Harper Collins, Macmillan,  Penguin Group, Random House and Simon and Schuster in making their e-books available to public libraries.  These companies publish about two-thirds of the books in the U.S.   Many details remain to be resolved and, according to Anthony Marx, writing in The New York Times, each publisher has different requirements for selling or licensing library e-books.

It’s logical to assume that the ease of checking out e-books at your local library and the availability of many titles will cut into the sale of e-books.  Just how soon the majority of popular books will be widely available in libraries is anyone’s guess.  It may take months or years.   For example, Spokane, Wash., Spokesman Review writer Adrian Rogers recently wrote that few of the current best-selling books are available in e-book format at the Spokane Public Library.

According to Marx, president of the New York Public Library, the Great Recession caused a nationwide surge in library use, yet many Americans don’t even know that libraries offer e-books, limited as the selection might be.

DPLA launched

The other recent development is the creation of the Digital Public Library of America, a modern-day Alexandria, that seeks to use resources from libraries across the country, digitize them and make them available free to the public.

Executive director of the DPLA, Dan Cohen, told Atlantic Monthly recently that the library was a “large-scale attempt, to knit together America’s archives, libraries, and museums, which have a tremendous amount of content–all forms of human expression, from images and photographs, to artwork, to published material and unpublished material, like archival and special collections.”

One of the goals, according to Cohen, is to make it easier for researchers–or anyone–to find material that they might otherwise have to discover by visiting hundreds or thousands of websites.  In addition, third-party users will be able to create apps based on DPLA content.

Cohen told the Atlantic that they would be looking for “alternative licensing” that will help them make more e-book material available.

Robert Darnton, director of Harvard University’s library system, addressed the copyright challenges to making e-books free for all in this new national library, calling the project “utopian.”   In a lengthy article in the New York Review of Books, he noted a March 2011 court decision that effectively derailed Google’s massive book digitizing project but said the DPLA hopes, “to win Google over as an ally in working for the public good.”   In any case, he said they would not wait for the courts to “untangle the legalities” before establishing the framework for the DPLA.

Apple accused of inflating prices

In an unrelated development, the Wall Street Journal reported Apple is defending itself in a Manhattan antitrust trial regarding the price of e-books.  The U.S, Justice Department is accusing the giant corporation of trying to eliminate price competition.  The detailed case revolves around the use of two different pricing models in which either retailers or publishers establish prices.

As has been clear almost since e-book popularity started to skyrocket–and noted in this space before–no one can really predict the future of digital media.  Publishers, retailers, libraries and other stake holders will be hashing this out for some time to come.  Authors and other artists may have a say in the process, but their role will be small.

For a discouraging look at the future of “original” digital material–dire for everyone except the top 1 percent earners–read Jaron Lanier’s article in the New York Times last Sunday called Fixing the Digital Economy.

Internet making us stupid?

Some months ago I wrote about studies showing that constant use of the Internet can shorten our attention spans.  Now comes a report that the Internet is also affecting how we remember things.

According to a video program on the Academic Earth website, the use of Google is changing how our brains operate, favoring short-term memory over the longer term because, well, we can always “Google” something, we don’t have to remember it.  We have conditioned ourselves to forget is the program’s provocative message.

See the links below to find the website.  While you’re there, check out some of the other short programs including a two-minute-forty-second summary of Atlas Shrugged, an examination of Internet anonymity and an explanation of how you may be born a Democrat or Republican.  Some of the programs sound like miniature TED talks.

Hyperlinks

NY Times on e-books and democracy

Interview with DPLA excutive director

Best-sellers scarce in Spokane

Robert Darnton in the NY Review of Books

Digital Public Library of America

Wall Street Journal report on Apple antitrust suit

Lanier on the future of the digital economy

Academia Earth

Authors, publishers get a reprieve;            What will happen next?

Third in the series.

So, readers and writers are in for a change.  But it may not happen as soon as has been predicted.  Plans for the resale of “used” ebooks were set back last week as a federal judge in New York ruled in favor of Capitol Records and against Redigi.com a company selling previously purchased digital music files.

Businessweek reported that Redigi relied on the Copyright Act’s first sale doctrine.  That principle says that someone who owns a copy of a copyrighted work is free to resell it.  Redigi reportedly asserted that the doctrine applies to digital media as well and a ruling in favor of the online seller could have opened the doors for the sale of used ebooks as well.

As reported earlier, Amazon and Apple also have drafted plans to sell used ebooks online.  Authors reacted with alarm figuring that used sales will replace new sales, and used prices will eventually tumble.

Some of the proposals and, at this point, industry rumors, have it that publishers and authors could receive compensation from the sale of used ebooks.  All remains to be seen, especially in light of the recent court ruling.

Sunday in the New York Times, author and president of the Authors Guild, Scott Turow, wrote that America’s “literary culture” was at risk.  He cited not only the proposals for the sale of used ebooks, but a court decision authorizing the importation of foreign editions of American works, often cheaper than domestic editions.

He earlier sounded an alarm after Apple and Amazon patents for used ebook sales were announced, and he said Sunday that used ebook sales will be found to be illegal.

What is going to happen to the spread of ideas, the entertainment, the inspiration that books bring us?  Change is inevitable.  Some thoughts:

— Writers will still write.   We have to.   Several authors, including best-selling sci fi writer John Scalzi, recently have said that as royalties dry up readers may be surprised to see authors finding new forms of employment.  Sadly, in most cases that will not happen.  I say sadly, because writers, if they’ve been at this any time at all, know the rules.  You write because you must.  You write books because you receive satisfaction from it (when you like what you produce) and not because you see it as a way to make a decent living.  Writers need second jobs and working spouses/partners.  Or to put it the way a writer friend of mine explained, “Writers have always gotten the short end of the stick and we’re used to it.”

In the Sunday New York Times piece Turow rightly noted that mid-list authors–not the best-sellers–will  be most hurt by plummeting book prices.   The workaday scribes who eke by cranking out books will have it tough.

–Book prices–for all formats–will come down.  A little reduction would not necessarily be a bad idea for all parties.

–Unlikely this year, a used ebook marketplace, in some form, will happen.  Publishers and/or corporate online sellers may restrict the number of times an ebook may be resold.  Legal hurdles will be higher than some expect.   It will take time, but unless some unexpected technological development or legislative change alters our present concept of books and ebooks, a used marketplace will happen.

–Copyright protection, world-wide, will continue to erode.

-The big, traditional publishers still control much of the book market and thus will influence any future used ebook marketplace.  Although Amazon, Smashwords and others are both publishers and sellers,  the big-money authors–and aspirants–will be found at Random House, HarperCollins, etc.  (According to Publisher’s Weekly, Random House income for 2011 was $2.2 billion.)

–The authors who may fare best are established writers who switch from big New York publishers to ebook self-publishing.  If authors already have a sizeable following based on paper book sales, they can bring their readers with them to the ebook marketplace.  Amazon presently gives 70% of ebook sales to publishers.  If the author is also the publisher, that beats the standard author royalty many times over.   Authors who do not yet have enough of a following to sustain ebook sales also will be successful if they become adept at social media marketing and other avenues to attract readers.   Some best-selling authors will decide to remain sheltered by their agents and one of the big-six publishing houses.

–As book sales that produce royalities decrease, many authors should focus on the contractual aspects of their advance.  It might be the only book income they ever see.

–Another author friend suggests that increased exposure via a used ebook market could be beneficial–provided the price of ebooks doesn’t tank.

Notes/Hyperlinks

Businessweek reports on Redigi decision

Scott Turow sounds off

Largest publishers in the world

——

This blog will continue to cover these developing issues while also providing samples of flash fiction, books reviews and articles about flash fiction writers and publishers.

——

Congratulations to flash fiction journal Vestal Review.  It just celebrated its 13th birthday.

 Vestal Review

%d bloggers like this: