Jacob Wonderbar week fun! If you're in San Francisco don't forget about the launch party tonight at Books Inc., hope to see you there! And there's still time to enter the Pinterest sweepstakes.
Meanwhile... I guess there was some teeny tiny publishing news this week.
Let's get the disclaimer out of the way first: I work for CNET, which is owned by CBS, which is the parent company of Simon & Schuster, one of the companies named in the lawsuit. All opinion here is entirely my own, does not necessarily reflect the opinion of CBS and/or Simon & Schuster and/or CNET, and is based mainly on my time in publishing as a literary agent where I was not privy to the inside discussions at publishers, and it doesn't necessarily reflect the opinion of my old agency Curtis Brown Ltd. either. Cool?
So here's what: The Department of Justice sued five book publishers and Apple for allegedly colluding on e-book prices. Yeah, wow.
How we got here
Here's the elevator pitch summary of what happened:
In the beginning of the e-book era, publishers sold e-books according to the "wholesale" model. Every e-book had a retail price, publisher got roughly half the retail price, bookseller got half, bookseller could sell the e-book for whatever they want. Amazon discounted deeply, taking a loss on some titles, built early market share, made publishers nervous as they were running away with the e-book market.
Along came Apple and the "agency" model: They gave publishers the ability to set their own prices and receive 70%. Publishers jumped at this and raised prices, but actually received less money per copy sold than in the wholesale model. (The difference between agency and wholesale also is the reason behind why some e-books cost more than their print counterparts)
What the DOJ alleges is that some of the publishing executives met around this time and explicitly discussed moving to the agency model and raising prices. This, the DOJ says, amounted to illegal collusion.
Three of the publishers, HarperCollins, S&S, and Hachette, have already settled without admitting wrongdoing, and will allow variable pricing. Macmillan, Penguin Group, and Apple have not settled and apparently will fight the charges in court. The case against Apple in particular, my colleagues Declan McCullaugh and Greg Sandoval write, is unlikely to stick.
For a completely comprehensive look at everything, Shelf Awareness has a great summary (via Curtis Brown). I also summarized the issues in more detail a few weeks back in the post 50 Comments on What Will the Book World Look Like After the DOJ Lawsuit?, last added: 4/17/2012