OFT launches investigations into ebook agency pricing

[Kali Yuga]

Originally Posted by kennyc

And you do realize you are completely wrong. Apple no more has a monopoly on digital music than Ford has a monopoly on cars.

Ford hasn't had a 65-70% market share, with the next nearest competitor at 15%. I don't think it ever went above 50%, even in the days of the Model T.

And "monopoly" also doesn't mean a permanent lock. A company can lose its monopoly status through ordinary market mechanisms.

[Kali Yuga]

Originally Posted by Barcey

The problem is that "being big" makes some companies think that anti-competitive behavior is a viable option.

So does "being small." For example, a number of modeling agencies in New York allegedly engaged in price fixing, in order to control the market and suppress potential competitors.

Small companies can also take actions some may regard as anti-competitive and/or highly unfair. One glaring example was SCO, a rather small company which claimed it held the rights to critical parts of Unix that in turn got incorporated into Linux, and set about suing everyone -- including significantly larger companies such as IBM, Novell and Chrysler.

Larger companies may have a wider impact when they engage in anti-competitive behavior. However, the size of a business has absolutely no effect, as far as I can tell, on the moral behavior of its directors or employees.

[Xenophon]

Originally Posted by Kali Yuga

[SNIP]

For years, Apple specified the price (99¢ per track), the format (protected AAC), the software the tracks can be played on (iTunes), the portable devices it was compatible with (iPods), who they wanted to spotlight, and after initially cajoling the recording business, pretty much bullied them around. They've even faced anti-trust probes, over things like pushing labels to kill Amazon's "MP3 Daily Deal."

[SNIP]

The quoted portion of KY's post is mostly accurate; one part, however, is off-target. Sure enough, Apple insisted on the AAC format. The "protected" part, however, was due to the labels, not to Apple.

The Apple folks argued hard for no-DRM from the very beginning of the iTunes store for a very simple reason: DRM makes things more difficult for end-users, which makes the platform less attractive (at the margin), and consequently leads to fewer hardware sales at the margin. Because Apple is (or was, at least) primarily in the hardware business rather than the content business, pushing no-DRM has always been in Apple's best interests from a hard-headed business perspective.

[Note that I'm not claiming that the Apple folks were taking an "information wants to be free" approach, or being "champions of the consumer", or any such thing. Just being hard-headed business folks pushing for their own best interests.]

All the rest of the quoted paragraph from Kali Yuga's post seems spot-on to me.

Xenophon

[saoir]

I hope all you guys start writing to the OFT about the Amazon Kindle and the Agency pricing anti competitiveness.

[Andrew H.]

Originally Posted by nwhitfield

Essentially, if the selling of rights for TV by territory within Europe is anti-competitive, surely so should be the selling of books in the same way.

As I read the advisement, it's not "anti-competitive" to sell the TV rights by territory within Europe, but it violates the open market provisions (or whatever their technical name is) of the EU.

But I can't figure out how this applies would apply for e-books, or even if it would. I mean, you still have to sell the rights to *someone*.

[snipenekkid]

Andrew,

Maybe, well better said, hopefully, we might be finally seeing the camel's nose in the tent for a redefining of the whole idea of regional distribution rights for properties such as books, movies and other sort of products. I genuinely feel for our reading pals in places like Australia & New Zealand where a freaking paperback starts at AU$20. But the other day I was looking at books on the rack in a local grocery and see paperback cover prices are in the $12-$15 range here in the US. And I remember my buying any new paperbacks when the prices nudged $5.99 back in the mid-1980s. y friends and I all really did draw the line there. But where we lived in San Luis Obispo (SLO), California there was, and still is, one of the best used book stores anywhere on the west coast. Plus it was pretty much across the street from our favorite watering-hole. Just try buying books after 10-15 beers from around the globe, it makes for some interesting choices! But ya have to love the store with it's dim lighting, musty smell and the much required creaky hardwood flooring. It was such a fun thing. But all that aside it was the prices.

Back on topic, I hope this is the case and I also hope if it does happen it can really spur on a real renaissance of the while idea of reading and access to knowledge. I mean really, given the freely available access to information and content via the web, do these things make much sense anymore?

Of course I hope it does not threaten to stifle creativity for entities like BBC, who I feel, produce far more compelling product than our pathetic US media. Of course that is from someone in the US who completely loathes all but a handful of the gazillion channels of detritus offered on our "entertainment" systems.

I'm sure UK folks might feel differently about their BBC but know from a US POV, at least one of us over hear would move to the UK just for the TV. hahahaha

However I also don't envy the complexity of regional restrictions of books. Why it cannot be more of a cooperative reciprocal situation confuses me. The days when regional rights should be coming to an end not growing more powerful as the rights fall under the thumb of an ever shrinking handful of major industry behemoths.

I don't want to see the end of competition as that can and does spur innovation. But it also prevents, in theory, the control of what information is deemed worthy. As long as the creative people as well as the infrastructure providers are compensated fairly, I guess I prefer a system of "moderated or rational anarchy", if that term makes any sense whatsoever.

[nwhitfield]

Originally Posted by Andrew H.

As I read the advisement, it's not "anti-competitive" to sell the TV rights by territory within Europe, but it violates the open market provisions (or whatever their technical name is) of the EU.

But I can't figure out how this applies would apply for e-books, or even if it would. I mean, you still have to sell the rights to *someone*.

Well, selling the rights by themselves isn't anti-competitive, but it becomes so when you violate the provisions of the single market, because you then prevent the competition that arises from, for example, someone being able to buy the same thing (in this case football matches) from elsewhere in the market, at a cheaper price.

By selling in the way that they do, if the Premiere League takes people to court for daring to exercise their right to buy from anywhere in the EU, it's hardly a competitive market, is it? They're barring you from choosing the competition, and saying "You can only buy from our agents in the UK."

As a side note to that, arguably agency pricing makes eBooks even more likely to fall foul of that; with football, although there is only one broadcaster (Sky), you can subscribe via Sky direct, through Virgin Media, or TopUpTV, each of which has slightly different packages and prices, albeit with a base price set via Ofcom. In the case of books that have agency pricing, there's not even that opportunity - the price is the same, wherever you get them from.

So, for eBooks, if this ruling were applied (and some commentators feel it will cover most 'rights based' markets) it would mean that a publisher can't say to a retailer "Sorry, you can't sell that only to people in the UK" because that would prevent people elsewhere in the EU using their single market rights to buy from a UK store.

The impact on rights follows as a result of that decision. Suddenly, UK rights to football aren't worth quite as much to Sky, if they know that people will be able to buy a subscription from another country, with impunity. Some people (arguably not many - you'll need another dish and receiver after all, and you'll have foreign commentary) will buy from Greece, or wherever else they can, and Sky will lose out on income. So why should they pay the Premier League for "exclusive" UK rights, which no longer make them the sole legitimate retailer for the UK?

Similarly, in books, if suddenly people can get the electronic copy version of something from Amazon UK, will publishers be so willing to pay as much for their own country rights?

That's going to depend on the territory and local conditions; but in countries where English is very widely spoken and it's a small market (the Netherlands, say) will a publisher even bother to acquire the rights to make a Dutch eBook, if there's no longer anything to stop most of the customers buying the English version from the UK?

So, the net result - certainly in the case of the football - is that yes, the rights still have to be sold, but some of those currently buying them will feel that they're not worth as much as when they got a local market stranglehold with them.

And, in that case, one of the possible outcomes is that people like the Premiere League will sell rights not on a territory basis, but on an EU-wide basis instead, and that will of course favour large groups (like NewsCorp), who have established operations in several countries, and can either set up local subsidiaries, or retail through partners, in countries where they don't have them.

The potential impact of this is hard to work out for books, really; football, after all, can be followed without worrying about the commentary being in a different language (and you can probably find a local language radio commentary to go with your foreign pictures).

In books, it could have very different effects, depending on the language and the culture of different countries, and the uptake of eBooks, which are obviously easier to transport across boundaries.

If publishers in other countries know that people will be able to buy the english eBook freely, will the rights for that country be worth so much any more?

Conversely, if the rights to the english eBook effectively mean you are selling to the whole of the EU - because the advocate's opinion is that you can't stop people buying from other countries - doesn't that mean that the only sensible thing for the author is the sell those rights on an EU-wide basis, and hope to get more as a result?

Once you decide to sell one set of rights EU-wide, you've started to break down the traditional way things are done.

Obviously, this is all from an english-speaking perspective; there are likely to be far more non-native speakers wanting to buy books in English than in French or German. But if English publishers change the way they buy rights, won't others follow, eventually?

Of course, all this, and the OFT investigation, will take time. But I do think that they could between them start to force some in the publishing industry to look differently at the way things are done.

[Kali Yuga]

For those of you who didn't read the article on the Premier League....

Originally Posted by The Article

(Kokott, the advocate general) dismissed the copyright argument put forward by the Premier League that it held exclusive rights to matches broadcast to the public. "There are no comprehensive rights which protect the communication of a broadcast to the public where no entrance fee is charged," she said.

There's no doubt that copyright issues do, in fact, apply with ebooks. As such it's somewhat unlikely that ebooks are comparable to broadcasts of sporting events, or that this case would eliminate regional rights in the EU in one fell swoop.

It also seems likely that if Sky does lose the case, they'll actually get what they want. Sky or a similarly large broadcaster will lock up the pan-EU rights (which they've wanted for some time, but the League doesn't because it's less lucrative for them) and charge one rate to the broadcasters. (http://www.bbc.co.uk/blogs/davidbond...v_doomsda.html)

Not really sure how one broadcaster locking up all EU rights to a sporting event would encourage competition, really....