Friday, April 13, 2012

Kindles, Collusion, and Copy Protection

NPR gives us a good history of the recent governmental ruling against Apple and several book publishers for price collusion, and makes this prediction:
“No matter what the outcome of this mountain of federal and state litigation, the agency model [an agreement that allowed publishers to set the same price for digital books across all online marketplaces.], in its present form, is dead. Within the next month, Amazon, Barnes & Noble, Apple and other e-book retailers will undoubtedly mount a fierce price war for control of this new market. Publishers will bemoan the loss of the tool for preventing predatory pricing, brick-and-mortar booksellers will struggle to compete in the digital marketplace, and cash-strapped book buyers will cheer the competitive prices.”
The article also claims that: “The model may be moribund, but [successful in that] customers no longer think of $9.99 as the only possible price for an e-book. We regularly pay everything from 99 cents to $14.99 for a best-selling e-book.”

This is interesting and all, and I’m looking forward to being able to pick up some ebooks at rock bottom prices. However, I was surprised to not to see anything in the lawsuit about the ability of ebook manufacturers to look their customers into devices. It turns out that I’m not alone: Cory Doctrow at Boing Boing points out that “Every dollar that is spent on a locked, proprietary platform is a dollar of opportunity cost that society will have to spend to get out from under the would-be monopolists of ebooks when (not if) they abuse their power (see my latest PW column on this)."

Frustrating! I guess this came about because the publishing industry, the device came before the format. Thus, if you buy a book on your Kindle, you can’t read it on an iPad or Nook and vice versa. This is opposed to the consumer win in the music industry, where the format for sharing music (mp3s) came before the portable devices that you would use to listen to the devices. Thus, any device that wanted to be successful needed to be able to play mp3s that you could pick up anywhere.

I love my kindle, but amazon's market power and being frozen into one device does makes me nervous. Interesting to see how this will play itself out.

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