Does anyone else see the supreme irony in the Department of Justice’s antitrust lawsuit against book publishers and Apple?
In a nutshell, here’s what happened:
Publishers: Hey, retailers. We own the rights to this really great book. We’re selling the e-book version for $9.00 each. We’d like to sell it through your website.
Apple and Indie Bookstores: Awesome! Sign us up.
Amazon: Wait. I usually sell all books as loss leaders and mark them down to under the price all my competition pays for them so I can sell garbage disposals. Does this mean I can’t do that?
Publishers: Um. Yeah.
Indie Bookstores: Woohoo! Look at that – people are buying books and e-books from us!
Amazon: Wait, my whole business plan is to sell your entire industry’s products for under cost so you’ll all go out of business and I’ll be the only one left. Then I’ll raise the prices so I can actually bathe in money.
Publishers, Apple and Indie Bookstores: But won’t that mean that you won’t have the book selection you have now?
Amazon: I don’t care about that. I’m just interested in installing my money burning fireplace in my en suite. Of course my customers are too stupid to realize what I’m doing. I just have to wave sparkly Kindles in front of them and they’ll follow me anywhere.
Indie Bookstores: Do you really think your customers are that stupid? They are readers, after all. They’ll probably catch on.
Amazon: Nah, watch this. I’ll get the Department of Justice to sue all of you so I’ll look like a populist good guy – only concerned about the price of books for my loyal customers. Then you’ll look like you’re trying to monopolize the industry. Your customers are gonna be SO MAD at you.
Publishers and Bookstores: Um, wait. Selling them through the agency model ensures that more retailers can compete, thereby creating a more diverse selling climate, creates more competition and ensures that we don’t sell at a loss and go out of business.
Amazon: Yeah, whatever. I’m still going to look awesome, and my pr team is totally going to trash you. Plus, Americans don’t really care about monopolies as long as they get a bargain. They just know they’re supposed to care so I’ll just wave the words “price fixing” around so it gets lots of media coverage.
Apple: Can I just chime in here? This is how the music industry was destroyed. People started buying downloads of music for free and almost free so musicians couldn’t afford to make music and the music producers went out of business.
Amazon: Yawn… Are you still here? Look, I have the freaking Department of Justice on this. Give up. You’re done. We’ve trained everyone to expect big monster corporations to gobble up small businesses and become too big to fail. It’s the American way!
Simon & Schuster, Hachette and HarperCollins: Crap. We’re outta here.
Penguin, Apple, Macmillan and Indie bookstores: This is totally outrageous. This is just Amazon’s latest tactic to tilt the table so all the marbles roll toward you. This doesn’t benefit anyone except you. Not even your customers. You can’t do that!
Amazon: Watch me.
If the department of justice wanted to really deal with a price fixing issue, let’s take a long, hard look at gas prices and oil companies. Paying fair market value for books in any form is not monopoly, it’s fair play and makes good economic sense.
Here are some more sources:
Publisher’s Weekly Article – MacMillan CEO John Sargent’s letter is really good.
PBS NewsHour interview. Still trying to wrap my head around Stever Berman’s (a “seattle based lawyer” – read Amazon’s) quote, “But there’s nothing wrong with being a monopolist. And if Amazon could gain a monopoly share by offering the lowest price, and consumers want that lowest price, they’re enabled and allowed under the law to do so.“
As my brilliant partner, Kris said this morning – Life doesn’t move toward fairness. It just moves forward.