Apple anti-trust: Publishers not justified, and not special snowflakes either
July 16, 2013 | 4:24 am
As far as I know, I’m not closely related to Dan Meadows, who blogs at The Watershed Chronicles. (It’s possible we might both be descended from Revolutionary War soldier Israel Meadows, assuming his branch of the family didn’t come over from Britain more recently or something.) But it seems we share a number of similar opinions.
Dan has made a couple of recent posts to his blog that make some interesting points. The first one looks at all the claims that Apple and the publishers were justified in their price-fixing because Amazon was acting the part of the evil monopoly. The publishers, Dan points out, weren’t exactly saints themselves. While Dan does share some concerns about Amazon’s monopoly power, he notes:
The difference between their opinions and mine is that I recognize how Amazon achieved their position in the market. They did it by breaking the monopoly publishers had established over several decades. The testimony in the Apple case painted a picture of publishing CEOs not at all unfamiliar with routinely meeting with their fellow executives and exchanging notes on competitive circumstances. The control they had may not have been a traditional monopoly, but it sure as hell looks an awful lot like a cartel. And that says nothing of the virtual monopsony they collectively held, due to their gatekeeper role, over their suppliers (writers). Amazon broke their hold by addressing those most disaffected by the cartel’s established structure, using technology to do it. The same disruptive conditions they used still exist and I am confident can and will be directed at Amazon in the event they change course into genuinely predatory waters. But please don’t ask me to back the old, more restrictive cartel as the better choice.
Barnes & Noble, in danger of being quashed by Amazon, isn’t exactly a saint either, given that it did exactly the same thing to independent bookstores in its time.
The funny thing, Dan notes, is that most of the voices heard in the debate so far seem to be pro-Amazon/anti-publisher or anti-Amazon/pro-publisher. There are relatively few people who complain equally loudly about both of them.
The other one addresses another commonly-heard claim in the defense of publishers—the idea that book publishing is somehow special and deserving of exceptions to anti-trust law, because books aren’t like any other product. Books aren’t mere commodities, say those who hold this stance. They’re special because they’re full of ideas and stuff. And they’re all different!
I’m pretty sure that Judge Cote or the Justice Department discussed this in one of their documents in the Apple case, quoting a long list of different industries who each tried (fruitlessly) to make the same claim during their own antitrust trials, often with the same cookie-cutter arguments: “We’re special because…” Alas, I wasn’t able to find it in a quick search so I can’t quote it. But not only is the “we’re special” claim doomed to fail whenever it is brought up, Dan notes, books essentially are commodities, or at least their own publishers treat them that way.
Books have been commoditized by publishers because they can’t consistently tell which specific books are going to hit ahead of time. So they built up a bulk catalog made up of mostly low risk, low out-of-pocket books as a hedge against those larger risks. They may not be able to tell which books will be the winners but they certainly have confidence that enough of the totality of their catalog will hit to provide profitability. Saying publishers can’t tell what a book is worth until it’s on the market is both true and misleading. It doesn’t matter how any individual book does, only that enough of them do well in totality.
He returns to the earlier point about publishers as a monopoly of their own, pointing out that they had grown to dominate the market over time and Amazon was only able to earn its position by exploiting the inefficiencies that had grown out of the publishers’ complacency. Amazon does an end-run around those publishers, establishing a relationship with both readers and writers who have been neglected because their needs didn’t suit the established industry players’ bottom lines. The industry, and the marketplace it serves, have changed, and rather than trying to keep things the way they were, publishers are going to have to change with it—or die. They can’t simply ignore the law because it’s more convenient for them.
Whether publishers live or die is immaterial to the matter of whether, and how, the industry on the whole reloads. It will carry on regardless, headlined by readers and writers which to my thinking is a far better development than one dominated by middlemen demanding onerous concessions in rights, control and money if you ever want your work to see the marketplace.
In these posts, Dan Meadows manages to crystallize a lot of the things I had been thinking myself but hadn’t figured out how to express yet. They’re definitely worth a read.