Originally Posted by GadgetCanadaV2
DOJ will lose. Funny how they never investigated Amazon's monopoly on books prior to iBooks being released.
Well, paper publishing has a number of issues and challenges. I worked for a publisher at one point in time that had more trouble with Ingram Publishing Services. But they preferred working with Amazon. Under an Ingram contract, the printer/publisher has/had to pay for everything, including return shipping if the book is returned or in a worse situation, completely outside the publisher's control, someone at Barnes & Noble spills a starbucks coffee on a book. This happened frequently. One time, Ingram UPS-mailed a crate of books, around 1000-lbs, requesting refund, and the publisher even had to pay for the shipping costs. We took the books, and placed them in the trash, and the unexpected 1,000-lb return cost the publisher over $10,000. It was a real expensive dumpster pickup, and the publisher learned from that.
The publisher I worked for was really looking forward to the iPad as a savior. But, the first few versions of iBooks didn't support color pictures for children's books, but I believe this was updated and changed. Color books, especially for Children's books, is a differentiator, and needed for anything that has illustrations, and a customer at the time, would have paid additional for something in color, over Kindle's Black-and-white display.
For paper distribution, amazon uses Just-In-Time supply chain concepts, and only keep a few week's stock on-hand, which work better. Using centralized logistics, it just worked better than Ingram Publishing.
As for the DoJ action, they're doing their job and researching how to arrive at specific pricing. I'm surprised that no one pointed out the fact that iPad was in color, and color can, by definition, command a premium. Heck, 4-color printing costs more anyway!
That said, perhaps the DoJ is correct. With electronic distribution, prices should go down over time, and they likely will as new authors sign contracts, that take into consideration potential new royalty amounts for electronic distribution.
From a publisher perspective, it's difficult to pin down a price that respects publisher's need to create profitable products, pay wages without cannibalizing the print market sales through companies like Amazon, Barnes & Noble (Ingram Publishers... Whom only paid after a book was sold at a store), and others. My guess (and it's just a guess), is that Apple's suggestions for pricing were a good balance for the transition into electronic publishing formats. Creating an eBook is easy, but some customers still prefer paper versions, including myself. If your looking to publish, consider a Lulu account. As a publisher or self-publishing author, you can set the price to whatever you want. Lulu works similar to a regular publisher- manages the contracts, and distributes on multiple platforms including Kindle and iBooks, all electronically.
I doubt any, or very few, of the authors in publisher's catalogs have an issue of being paid an amount similar to a print copy. Indeed, publishers can set the pricing to individual titles to whatever they negotiate with the author, but when it comes to back catalog manuscripts, likely the logic applied was sales. And Publishers, standing up on behalf of the Authors, wanted royalties to be paid an amount similar to physical distribution. Likely, if an author wanted to charge more or less, I'm sure all they have to do is call their literary agent or publisher up, and request a price change.
From the legal department's perspective, you have to understand royalties and contracts. People in creative industries, often loose contact after the creative work is done. Apple's suggestions for pricing were likely used to provide general direction in situations where the Author couldn't be contacted in time for the Kindle or iPad/iBooks launch. Unfortunately, this occurs often! In 2004, Eliot Spitzer, as Attorney General for the State of New York, found $50,000,000.00 in royalties owed to musicians whose record labels had failed to keep in contact with them. All they needed was an accurate list but sometimes authors, artists, and musicians move, so the catalog of books, whom the Publisher owns the copyright to, has to be managed.
With matured industries like music or print publishing, authors to books may not have been available to re-draw-up new contracts on an individual basis. So the price likely had similar goals including payment to authors a royalty amount the same as physical publishing. Most publishers own the copyright anyway.
Edited by BobbyDooley - 6/3/13 at 6:31pm