DOJ vs. Apple and Big Six: Who cares?


Matthew Yglesias wrote an interesting column yesterday in Slate entitled, Leave Penguin Alone: Who cares if book publishers are colluding with Apple to raise e-book prices?. It takes a look at the recent Department of Justice announcement that they will be pursuing legal action against  Apple and the “Big Six” of publishing for price-fixing.

The Good
Overall, it’s a good piece, with the inflammatory title masking the pro-indie message of the article, which is: no one cares about the demise of Big Six publishing at this point. Good news and good riddance, in other words. But, Yglesias says, the DOJ is beating a dead horse,

the Justice Department’s notion that we should fear a book publishers’ cartel is borderline absurd, on par with worrying about price-fixing in the horse-and-buggy market.

He also rightly dismisses Scott Turow’s comments in defense of Apple and his paean for the Big Six, as well as his attacks on Amazon. Turow, president of the Author’s Guild, is such a shill for Big Six (with whom he’s made millions) that he might as well have those little lines drawn down the side of his mouth like a hand puppet.

(There’s a wonderful, rip-him-a-new-one post by Joe Konrath and Barry Eisler about Turow’s latest screed here: http://jakonrath.blogspot.com/2012/03/barry-joe-scott-turow.html and David Gaughran’s position is pretty clear in his blog post on the matter, Scott Turow: Wrong About Everything.)

I agree with everything Yglesias says to this point, but…

The Bad
The point he misses is the impact on authors who have already signed contracts with the Big Six.

The price collusion that the DOJ is investigating led to the “Agency Model” war of 2010, when Amazon backed down from Bix Six when they threatened to yank all titles. Amazon agreed to let the Big Six charge more than $9.99 for books (often much more)…but the publishers never increased the author royalty rate, despite almost zero overhead and zero return costs. Authors make 17.5% on all titles, just like in the old days when publishers had to take back every unsold book from Borders and Costco. The estimated take on ebooks by the publishers today? Upwards of 50%.

In some cases, the Big Six have claimed ownership of non-existent e-rights to books they bought in the 70’s and 80’s because of the total nature of rights ownership. The authors who signed those contracts have now lost access to their own backlist in perpetuity…they’ll make the industry standard royalty rate of 17.5% forever.

If there are any IP attorneys reading this, please correct me if this is wrong, but publishers, even if they go bankrupt, will hang on to those rights for dear life, because they could resurrect themselves as new epublishing ventures and start making money the next day using legacy rights they nicked off authors 30 years ago.

So, who cares about Apple fixing prices with the Big Six?

Only every author who ever published a book with them.

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Writer of crime fiction, psychological drama, and dark humor.

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4 comments on “DOJ vs. Apple and Big Six: Who cares?
  1. Ritesh Kala says:

    I can’t imagine why none of the bigger authors who are stuck are bold enough to challenge the big 6.

    • Matthew Iden says:

      It’s just a guess, Ritesh, but I would assume the vast majority are “mid-list” authors who are scared of losing the little they have by speaking out against their publisher. And there are others who are happy with their lot and don’t want to think about the money they could be making.

      The minority of “big names” are making their millions and have a comfortable set-up…why rock the boat, even if they could be making 4x their current royalty rate? This is assuming they could…some might be regretting those 3- and 5-book contracts they signed years ago (that also have non-compete clauses in them).

      • Ritesh Kala says:

        Oh wow! So, does the non-compete mean they can’t self publish? I now think JK Rowling was a genius!

      • Matthew Iden says:

        As I understand it (from reading Konrath, Passive Guy, Dean Wesley Smith, Kris Rusch, and others…I’m certainly open to correction), most traditional publishing contracts do not allow authors to publish *anything* without their publisher’s permission while they are “under contract”.

        The language of these agreements is often heavily tilted in favor of the publisher and so “under contract” can often mean until the publisher decides to publish the last book in the contract…which they can refuse or forget to do for years. During that whole time, the author can be sued for releasing a competing product (same genre, for instance) or even using their own name (this is a well-known problem in romance, where author name is heavily branded).

        Writes with clout (Rowling) or the ability to walk away (John Locke, who negotiated to keep all of his digital rights when he went with a Big Six pub’er) are in good shape. Everyone else is/has been told to take it or leave it when the contract is presented to them. Most authors, grateful for the “break”, sign.

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