Since acquiring an e-reader last year, one of the great mysteries of life has been why e-books cost so stinking much money, since there’s no ink, no paper and no physical logistics to consider. I had my suspicions, of course, and now the Department of Justice has confirmed them: Apple and most of the big publishers have conspired and colluded to keep prices high.
The lawsuit filed today paints Apple as the architect of the plan, where the major publishers signed identical contracts to make sure nobody undercut the other. The conspiracy was motivated by the frightening specter of Amazon having the guts to actually compete on price. The suit quotes the late great Steve Jobs: “We’ll go to [an] agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.”
Yep, you definitely want to screw your customers. Apple’s made an art of it, and has grown extremely fat and incredibly sleek with just such tactics. Regardless of how the lawsuit plays out — and you know lobbyists and lawyers are shouting into their phones this very moment — it’s nice to get a glimpse behind the ads and see how Apple really views its customers.
E-books are a publisher’s wet dream: You don’t have to produce or deliver anything and you get to charge almost the same price as if you did. Talk about pure profit. Even better, you’ve made sure your customers can’t conveniently lend or resell what they’ve already paid too much for. In a better world, that might translate to lower prices for readers and a wider audience for good writers. Thanks to Apple, that’s not the case.
I am not an editor in the book publishing business but I am an editor in the scientific journal sphere. It is not, not, not , not true that producing electronic versions of format is somehow “free, easy and painless”. It is also vastly more susceptible to being ripped off (on a massive, industrial scale, eg China). I don’t know about US tax law, but in the UK, e-content and audio content is subject to VAT (nearly 25 per cent of the cost) whereas the print format is VAT-exempt.
Dave Knadler says
I can accept that. But I’m still pretty sure any publisher would rather sell you an e-book than a print one, because it’s more profitable and can never find its way into the used-book market, where the publishers get nothing.
EDIT: Actually, further reading on this subject reveals that I’m wrong about the profitability of e-books. Turns out publishers actually prefer to sell the old-fashioned product, for a variety of reasons that are not quite intuitive, and don’t view e-versions as a cash cow. I stand corrected. (But mostly unembarrassed, since so few people read what I write.) END EDIT
And the fact remains that Apple and the publishers colluded to obviate competition.
John H. says
Thanks for the update, Dave. I guess e-books are like digital music: loved and hated, embraced and resisted.
You’re a good man, Dave. Too few of us are able to admit it when we’re wrong. Your blog is always a good, thought-provoking read.