New details come to light in agency pricing class-action lawsuit
May 15, 2012 | 1:32 am
The hits just keep on coming. On PaidContent, Laura Hazard Owen writes about a new filing in a class-action lawsuit against the agency pricing publishers that reveals some previously redacted evidence in the case shedding light on the agency pricing negotiations. This is the suit in which a number of states (now up to 31 including DC and Puerto Rico) seek monetary damages, in addition to the DoJ’s class action settlement.
In one case, Macmillan CEO John Sargent asked Apple if they might consider relaxing their 30% take for new-release “hardcover” e-books to help ease the pain of their drop in revenue under agency pricing. (Apple didn’t.) Later, after trouble getting one unspecified “Conspiring Publisher” to agree, Steve Jobs actually sent an executive at its parent company an e-mail, in which he said:
As I see it, [Conspiring Publisher] has the following choices:
1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.
2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.
3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started, there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.
Maybe I’m missing something, but I don’t see any other alternatives. Do you?
Right, Steve. Never mind the fact that customers who think $12.99 and $14.99 are too high will still steal them. E-book piracy’s already started, and I don’t see any signs of it stopping.
And there’s also an interesting part in which an exec from Penguin leaned on Barnes & Noble not to do any more promotion or advertising of titles from agency holdout Random House until it toed the party line.
There’s not necessarily any smoking gun here, but plenty of stuff to make the publishers look just a little sleazier. It’s a shame this kind of courtroom proceeding takes so long to thrash out; I’d really like to know what happens when the publishers have their day in court.