Only one thing is guaranteed. In the great eBook war, one goliath will win this fight.
June 16, 2013
There’s a battle brewing all right.
But don’t look for David.
He’s not around.
In one corner is Goliath.
That would be Apple.
In another corner is Goliath.
That would be Amazon.
And refereeing the whole thing is the biggest Goliath of all.
That would be the Justice Department, which has accused Apple of colluding with five major publishers to raise the price of eBooks in 2010 in an effort to combat Amazon’s upstart decision to offer discounts for best-selling and newly released eBooks.
Now there’s a shocker.
Imagine Amazon offering discounts.
It was probably nicknamed Discount as a child before it became the 800-pound gorilla that rules the publishing world.
Anyway, Apple wanted to squeeze out as many dollars as it could.
Amazon was happy squeezing out a few dollars less.
The companies spit.
The big boys among New York’s top publishers stuck as many dollars as they could in the bank, and I don’t blame them because we’re all trying to sell enough books to stick a few dollars in the bank.
Apple in 2010 decided to make a big splash into digital publishing in 2010. When Steve Job woke up in the morning, he had the ability to make a big splash before breakfast, and Apple was in the midst of launching it first iPad tablet.
Forget Kindle, it said.
Here’s where people will come to read eBooks.
And he was a prophet.
But, alas, Eddy Cue – an Apple executive – spent six hard weeks, he said, negotiating with publishers about raising prices as soon as Amazon cut the cost of new or best-selling books to $9.99. Apple, it seems, wanted to see eBooks sell for $12.99 and maybe even $14.99.
The Justice Department said Apple put the pressure on publishers.
Apple probably didn’t have to squeeze too hard.
Everybody could get rich.
Nobody doubted it for a moment.
And the poor consumer?
He shouldn’t mind. The poor consumer had complained a little, then a lot, but had continued to buy hardback books for $24.99 for years. As soon as the initial shock wears off, the poor consumers will be fine. They like to read. They’ll pay the tariff, regardless of how high it might be.
Apple said it thought the company was giving the poor consumer a break.
Buy an eBook for $14.99.
Save ten dollars.
But was it collusion?
The government thinks so.
After all, Steve Jobs did email HarperCollins, saying, “Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.” In his biography, Jobs said he told publishers: “We’ll go to the agency model, where you set the price, and we get out 30 percent, and, yes, the customer pays a little more, but that’s what you want anyway.”
Was it greed?
The poor consumer thinks so.
Was it price fixing?
Even the U.S. District Judge thinks the government will be able to prove its case.
The digital age has caught up with Apple.
Too many emails are running loose, and emails contain the smoking guns.
One young man wrote the company and said: “With Apple strong arming Amazon into raising e-book prices, this is detrimental to my reading as a college student. You have so much. Wouldn’t it e OK for us little guys to have something?”
Steve Jobs himself responded.
“It’s the publishers that are raising prices, not Apple,” he wrote.
That was his defense then.
It’s still Apple’s defense.
Apple is innocent, or so it says.
The publishers are the guilty party.
Yet, when Steve Jobs heard a news report that Macmillan and Amazon were in a dispute about pricing, a dispute that led to Macmillan’s titles being removed from Amazon, Jobs wrote his staff: “Wow, we have really lit a fuse on a powder keg.”
And the next day, in a group email at Apple, Jobs bragged: “We have definitely helped stir things up in the publishing world.”
He stirred them all right.
He expected Amazon to back down.
Apple expected the publishers to hold firm.
The publishers crumbled.
The publishers have already entered into settlements with the Justice Department and with a group of state attorneys general in separate lawsuits. It cost Penguin $75 million, Hachette, HarperCollins, and Simon & Schuster $69 million, and Macmillan $26 million. Some said simply that they could not afford the legal battle.
No mas, the publishers said.
Apple now stands alone.
One Goliath may be in trouble, and it’s not the Justice Department.
Eddy Cue, representing Apple, has told the court that his company acted in the best interest of consumers, providing the public with a better technology interface and eBooks that, at the time, were found nowhere else.
“We gave them a great offer,” he said.
Amazon didn’t think so.
The poor consumers didn’t think so.
And now the Justice Department doesn’t think so.
Apple is trying to work a little magic in the courtroom. Steve Jobs might have been able to pull it off. He was genius.
But Steve Jobs, may he rest in peace, isn’t here anymore.