Tuesday, April 17, 2012

Antitrust law suit against publishers/Apple for price-fixing

I'd like to echo Kris Rausch-- we really can't tell what this antitrust suit will mean. The issues are so complex even attorneys and judges don't understand everything about these lawsuits. But here's her take on it, and she has a link to a site which explains more of it.

But already everyone in the bookworld is nervous, not that I blame us. I mean, the industry gets pneumonia whenever anyone sneezes. And Apple being involved complicates. (It's always hard to tell if Steve Jobs fans are actually just against anyone against Apple, which is, we hear, now the richest company in the history of the world... who knew? Anyway, Apple doesn't need our pity... this won't set them back one fraction of a percent of stock price.)

Anyway, I was remembering perhaps the most important legal case since Brown vs. Board of Ed-- the AT&T antitrust case. I remember everyone back then was muttering, "If it ain't broke, don't fix it," about "Ma Bell's" longstanding  monopoly. And yet, I look back on what telephoning was like before that and marvel.We put up with that? I remember when it was ILLEGAL to have more than one phone in your house. Yes, illegal. My granddad was afraid my grandmother would be upstairs and have heart trouble and not be able to get downstairs to call an ambulance, so he somehow got a second phone--- really, you couldn't even buy a phone back then... you could just rent one from ATT, and they let you have only one-- and he spliced a cable and hooked up a phone up in their bedroom.. and a few weeks later, the police came as the phone company had noticed this and filed a complaint against Grandpa.... somehow I doubt that company would have willingly let us all have throwaway cellphones.)  So maybe this new lawsuit will hasten the demise of cheap paperbacks or lead to even more editors being laid off... or maybe it will lead to something amazing.
The Web, cellphones, even fax machines would never have happened without the forced breakup of the ATT monopoly. (The technology for most of that existed, of course... but was suppressed.) Our world was quite literally transformed by that lawsuit. And no one could have predicted it at the time. All that was clear was that progress abhors a monopoly.

I doubt anything so transformative will come out of this case. After all, the genie's out of the bottle-- we already have open access to our own sources of publication (which really was suppressed for decades by the gentleman's agreements among distributors, publishers, and booksellers). So all we know is it's unlikely to go backwards-- we're never going to go back to a model of publishers utterly controlling access to the marketplace. And if Amazon gets more pissy and starts strangling royalties, well, Amazon has gotten pretty powerful in 20 years, but it doesn't control the internet (yet :).  There will now be other options. The sad thing about this lawsuit is all it really shows is how desperate the big publishers are to keep control, and yet how impotent they are, having to use one behemoth (Apple) in the war against another (Amazon), and not even getting it right, as usual, a day late and a dollar short. (Better to use that dollar to PAY WRITERS.) 
Anyway, I do look back at the ATT breakup (which most of us thought was bad at the time) and realize how much came out of that, and it's cautionary, that's all. Who knows. But progress, once allowed, can't be stopped, and interestingly the ones progress empowers tend to be the ones without power earlier. (That is, writers.)


Wes said...

Alicia, I too remember the environment before the breakup of Ma Bell. On my family farm we had an eight-family party line. Who needed the weekly newspaper when one could listen in on everyone's conversations?

One of the principles I've lived by in business is that there is no such thing as a little competition. Resisting it is like trying to hold back the tide with a rake. My comments are more to the effects of electronic publishing. The cost structure of publishing will change dramatically with the elimination of printing, shipping, inventory, returns, stocking, and other costs associated with physical books. These changes will reduce the cost of publication and lower the risks and open the doors to more niche markets and small publishers. The gatekeepers, agents and editors, will have less power, and more titles will be available. But I do not that believe that means more writers will be financially successful. More will be published, but more will have marginal earnings. The best will continue to sell well, and I believe their demand will prop up their royalties. So it will be easier to be published, but just as difficult to make money at it.


Edittorrent said...

Wes, I always wanted to be on a party line. I loved the idea of listening in on other people's conversations.

Once I was asked what I'd do if I could get away with some crime or sin. I said I'd read my neighbor's mail. Everyone thought that sounded like a pretty skimpy sin.


green_knight said...

the alternative to the big publishers matching each others prices in Apple's environment is Amazon dominating the industry much more strongly than they already do. While I'm not always happy with Apple, the agency model works better for publishers and ultimately mid-list writers. Since the agency model came in, competitors like Kobo and B&N have actually done better.