Legacy vs Reality

I’m a bit puzzled by some of the rhetoric I hear coming out of the publishing business these days

As most of you probably know, the US Department of Justice has filed a suit against several NY publishers for anti-trust violations. The essential allegation is that these publishers colluded with each other and Apple to artificially increase the price of eBooks.

The response from NY has been more or less some flavor of “Amazon is Evil!” so it’s OK!!!!

Except it’s not OK. Under US law a business cannot call up its competitors and mutually agree that everyone will charge the same, higher, price for their products. It doesn’t matter if Amazon is Satan himself. Period.

Mike Shatzkin blogged this:

Indeed, only by eliminating price as a basis of competition can we ultimately have balanced competition in the real world of publishing as digital change has remade it.

As a consumer, I can only say,  are you fecking kidding me?

I more or less commented to that effect on his post. His reply:

Carolyn, have you bought a Macintosh computer at a discount lately?

You should take your indignation at people using their Intellectual Property protection to raise prices on consumers to the pharmaceutical industry. It would do society a lot more good.

1. I think it’s fair for consumers to be indignant when businesses conspire to charge higher prices than the free market would bear.

2. What the hell does a Mac computer have to do with books and colluding over price setting? It’s Apple’s decision not to license its OS. Apple owns the OSX operating system and they have made a business decision not to do OEM.  Apple hasn’t called up Microsoft or Ubuntu or what have you and asked them to all charge $XXX for all the OS’s. And guess what:

 

Apple MacBook Pro – Core i7 2.2 GHz – 4 GB Ram

$1,339 online, $1,799 nearby

Lookie there. a $400 price difference for the SAME apple product.

2. As a former employee of a bio-tech company, I think I have a pretty good handle on the pharmaceutical industry. Here’s a few facts for you. Pharma gets a PATENT on their drugs and patents are NOT the same thing as copyright. The laws are different. Patent law grants a limited monopoly for that patented drug in order to encourage the R&D. And then the patent expires and generics come into the market.

3. There is no evidence whatever that Pharma companies have colluded with their competitors to keep prices artificially high. Because they have a patent that grants them a monopoly in a given drug and they get to charge as much as they want for the life of the patent. Because there is no competition for that drug.

There may indeed be issues with Big Pharma, but that has ZERO relevance here.

As an author and a reader I stand by my belief that “Legacy” publishers are not doing ANY of the things that would allow them to compete effectively.

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