March 22, 2012
Scott Turow Wants the DOJ to Back Off Of Apple
Scott Turow, author and president of the Authors Guild wrote a lengthy essay yesterday in Bloomberg Business Week decrying the possibility of the Justice Department suing Apple and publishers for colluding on e-book pricing. Turow says that industry insiders tell him pricing was never discussed as part of the Apple-publisher negotiations. His real target is not the DOJ but rather Amazon which he describes as the “Darth Vader of the literary world.” Apple and Steve Jobs is the “white knight” that rescued the ailing publishing industry with the agency model.
There are a lot of questionable statements in the essay. Turow says, for example, that publishers would have made less from Apple than what they were making from Amazon, so how could that be collusion? I don’t know. Do allegations of price-fixing (assuming that’s what the DOJ intends to charge) require an immediate pay-off? Then again, he suggests that it’s worth adopting the agency model just to keep Amazon from wielding immense market power.
He more or less blames Amazon for driving Borders out of business, though more than one outside analysis of Border’s problems suggests the book chain made a lot of bad decisions that led to its demise. One is how the physical stores went heavily into physical audio and video media at time when consumers were transitioning to streaming and downloading. There was the slow transition to online sales, long after Barnes & Noble got there, along with a tendency not to discount in face of the competition.
Let’s not forget that Borders was purchased by Kmart in 1992, not exactly a company sympathetic to the diverse literary culture Turow so lovingly describes, at least not outside of hawking product. A succession of tone deaf marketing executives running Borders didn’t exactly help the company either. If anyone remembers, Borders started its own imprint long before Amazon got into the publishing business with its first title, Slip and Fall by Nick Santora. Borders’ problem wasn’t that it couldn’t compete with Amazon as much as it competed badly. How many publishers are happy that Borders couldn’t pay the bills for the stock?
Then there is this:
Physical bookstores offer not simply an intoxicating experience for serious readers. They have an irreplaceable role in introducing new writers. Market research consistently shows that readers are far more adventurous in their choice of books when in a bookstore than when shopping online. In bookstores, readers are open to trying new genres and new authors: It’s by far the best way for new works to be discovered.
It may be the best way in some respects, but it is certainly not the only way serious readers can discover new works. Amazon has the peek inside a book feature for many titles. If I’m not mistaken, the Author’s Guild is doing everything in its power to prevent Google from offering a snippet view to commercial works under copyright via search. It sounds more like an issue of control than allowing an online consumer to choose an also convenient discovery method.
The world has moved online whether we like it or not. We can choose to participate in it or not, or to an individual degree of comfort. Turow says “Publishing shouldn’t have to choose between bricks and clicks.” I’ll ask why the consumer should be forced into the same choice. The real problem with the book market is that, despite the art and creativity that goes into authorship, books are mass marketed as a commodity. The music industry has painfully discovered the truth that online commodities can’t command the same pricing it did in the physical world.
There is a certain amount of irony when Turow describes Apple’s iTunes agency model relevant to digital books. I’ll note that Apple’s interest is financial in that the company keeps 30% of the sale price. 30% of $24.99 is a lot higher than 30% of $9.99. Remember Apple forced music labels into lower pricing via iTunes because it was in Apple’s interest to do so. The labels in fact tried desperately to find competition for Apple and were thrilled when Amazon got into the music distribution market. No one wanted to be at the mercy of Apple for directing the music market. And now Apple is good just because it checks Amazon’s power by forcing the latter to offer high prices?
The last I heard, the antitrust laws are specifically designed to foster competition that benefits the consumer. They are not there to give authors and publishers a comfortable living in a changing market. All marketers would like to keep prices high if they could. There is nothing special about books in relation to the trade laws. If Amazon is such a market bully, I suggest Turow and company file complaints with the FTC, the DOJ, the EU, and every competition authority out there. They are not shy in addressing market abuse. And as to the course of authors in a changing world, I suggest they adapt. [MG]