Mark Coker on the Justice Dept. vs. publishers

Mark Coker, the founder of Smashwords, is probably the best known advocate of ebooks as an alternative to traditional publishing, yet he doesn’t want those publishers to disappear.  He made this clear in an article on cnn.com on Sunday entitled, “A dark day for the future of books.” http://www.cnn.com/2012/04/15/opinion/coker-book-publishing/

Mark Coker

The Justice Department launched an anti-trust suit against Apple and five large publishing companies for adopting “agency pricing” and allegedly forcing Amazon to comply.  At the time, Amazon was pricing many books below cost, a move the other publishers feared would harm their print book sales. Three of the publishers have settled, while the remaining two, plus Apple, are going to court.

Coker seldom sides with big publishers, but in this case his reasons are clear:  he fears the Justice Department’s intention to protect consumers could actually harm them by harming the publishing industry by “forcing them to comply with onerous conditions…including restrictions on collaboration with fellow publishers and increased federal auditing and reporting requirements — [which] will increase publisher expenses and slow their business decisions at the very time when publishers need to become faster, nimbler competitors.”

Coker says that although agency pricing raises ebook prices, it “prevents deep-pocketed retailers or device makers from engaging in predatory price wars to harm competitors or discourage formation of new competitors. It would enable the marketplace to support more retailers, which would mean more bookstores promoting the joys of reading to more readers. And it would force retailers to compete on customer experience rather than price. Customers are best served when we have a vibrant e-book retailing ecosystem.”

As I understand Coker’s argument, if ebook prices drop too low, print publishing, the staple of brick and mortar stores as well as libraries, will become a money losing proposition.  I think we all know a certain “deep-pocketed retailer or device maker” who isn’t above “predatory price wars.”  Much as I love my kindle, I don’t want Amazon to become the only game in town.

I suggest everyone with an interest in writing, publishing, and ebooks read Coker’s article, the latest installment in a very convoluted drama.

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6 Responses to Mark Coker on the Justice Dept. vs. publishers

  1. Good article. I agree. I find Amazon’s massive reach more of a concern. I recently happened on a good – and ethical – online bookstore called Better World Books: http://www.betterworldbooks.com/
    Just passing that along.

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    • Thanks for the link. I know several indie bookstores one can support through buying ebooks from their sites, but the problem is, the kindle is still the only eye-friendly ereader I know of, especially for reading outdoors.

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  2. Adam says:

    This ongoing discussion worries me a lot. It seems as though the government is trying to upset the balance that has been reached involving ebooks and traditional books. Allowing a certain “deep-pocketed retailer” to set their own prices for ebooks would most likely end up with the complete death of brick & mortar stores as well as most of the traditional publishing houses.

    The system isn’t broken. People are buying ebooks, so they obviously aren’t priced too high. They’re also not priced so low that traditional books are no longer a viable option. It’s basic economics, the market for books has reached an equilibrium that allows the traditional publishers to continue their business while still allowing self published authors and smaller presses to compete in the ebook market.

    Why must the government be so concerned with trying to fix something that isn’t broken? Don’t they have anything better to do?

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    • I have no problem with anti-trust laws in principle. Recent events demonstrate clearly enough that trusting businesses to regulate themselves can be like trusting foxes to regulate henhouses.

      I think the problem here is that nobody really knows what’s evolving in the publishing industry. Like so much of the virtual world, trying to apply old rules can be iffy.

      I would think this case will take a while, very likely winding up in higher courts, and hopefully involving detailed testimony from people like Coker, who have demonstrated a feel for the dynamics of what’s going on.

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  3. Rosi says:

    Ah, the nanny state strikes again. Publishing is evolving, but with government intervention, it just might go the way of the Dodo bird. Thanks for the link to the article. I wasn’t sure what was happening to my Apple stock. Now I know.

    Like

    • From a certain perspective, that’s a bad news/good news situation: a dip in the price of Apple shares = buying opportunity.

      And regarding publishing, I don’t think this case will be decided anytime soon, and hopefully, people like Coker will get to give their testimony and educate those involved.

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