Paid Content: 17 more states join Conspiracy lawsuit

[fjtorres]

Total up to 31 plaintiffs:
New details revealed, Apple's role clarified, and names named; Jobs personally implicated, among others.
http://paidcontent.org/2012/05/14/e-...n-new-details/

Previously-redacted details include:

In late January 2010, Steve Jobs became directly involved in the agency pricing negotiations “after Eddy Cue could not secure one of the Conspiring Publisher’s commitment directly from an executive.” Jobs “wrote to an executive at the parent company, in part”:

As I see it, [Conspiring Publisher] has the following choices:

1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.

2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.

3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started, there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.

Maybe I’m missing something, but I don’t see any other alternatives. Do you?

Among the content previously redacted and now public:

–Macmillan CEO John Sargent attempted to negotiate with Apple’s Eddy Cue on a way to make agency pricing less painful for publishers (publishers actually make more money under the wholesale model, where they are paid based on a book’s retail list price, than from the agency model). On January 11, 2010, Sargent wrote to Apple in an e-mail, “Am thinking a possible way to ease the financial pain for the publishers and authors of moving to the agency model. Could you take a reduced cut on hardcover first releases (where we are presently making 14.00 in revenue and would make 9.00 under your assumptions)?” Apple did not agree to take less than its customary 30 percent cut.

Barnes and Noble was used to strong-arm Random House:

Once five publishers and Apple had enacted agency pricing, the complaint says the five publishers “worked together to force” Random House to adopt it as well. On March 4, 2010, in an exchange also identified in the DOJ’s filing, Penguin CEO David Shanks sent Barnes & Noble’s then-CEO Steve Riggio an e-mail reading in part, “Random House has chosen to stay on their current model and will allow retailers to sell at whatever price they wish…I would hope that [Barnes & Noble] would be equally brutal to Publishers who have thrown in with your competition with obvious disdain for your welfare…I hope you make Random House hurt like Amazon is doing to people who are looking out for the overall welfare of the publishing industry.”

The state complaint additionally says that Shanks was trying to get Barnes & Noble to “stop any promotion or advertising of Random House titles,” and when Barnes & Noble continued to do so, “Shanks went back to Barnes & Noble again. Following this contact, Barnes & Noble’s management decided not to feature Random House in any future advertising.”

Looking forward to more details as the cases go to court.

[petrucci]

It is ironic that the actions taken by these publishers, which some claim were made to save the publishing industry, will likely cause great harm to it.

Publishers need to make themselves relevant. A whole lot of proofreading and typesetting is outsourced. Advertising is now very much the domain of the big internet firms. So publishing companies need to figure out what exactly they are offering authors and consumers.

[fjtorres]

Originally Posted by petrucci

It is ironic that the actions taken by these publishers, which some claim were made to save the publishing industry, will likely cause great harm to it.

Well, it depends on what you think the publishing industry is about.
Note this quote:

A Big Six CEO told me last week that the two core skills and competencies that publishers require are “editorial”, picking the books and developing them, and “marketing”, letting the interested public know the book is there. This CEO would be happy to outsource just about everything else. Starting where this executive wants to end up — with commercial properties in hand and an ability to tell an audience about them but with no overhead or organization to support — is essentially where Hollywood entities get the chance to begin.

...from this Shatzkin report on industry wheeling and dealing:
http://www.idealog.com/blog/everybod...book-strategy/

The BPH's ideas of publishing are all about control and making deals, hence their reliance on backroom conspiracies like the Price Fix scam and the earlier Windowing" Club at the expense of the authors, their own staff, and even their shareholders. Deals and hype are core; everything else they'll ditch. Proofereaders, designers, formaters, artists, and (yes) even accountants.

Yet the apologists persist in holding them up as beacons of virtue.

Whatever...

[JoHunt]

I find Steve Jobs' take on piracy very interesting. I wonder if the [Conspiring Publisher] really bought the argument that non-availability at Amazon would encourage piracy while high prices would not

[stonetools]

With all due respect, I don't see the DoJ haymaker here.

Steve Jobs, with his typical bluntness, is sketching an entirely likely scenario of what would be likely happen if Amazon regained a monopsonistic 80-90 per cent of the market . " Sell to us at our price or we'll pull your BUY buttons and you won't make anything". See IPC.

So Mcmillan is negotiating with Apple over Apple's cut. Big deal. My guess is that everybody tries that. Apple's response was that " Johnny, it's the same for EVERYONE-whether BPH, record label or game developer".

As to Random House, let me outsource to ( surprise! Mike Shatzkin:

Second, the David Shanks email to Barnes and Noble. In the email, Shanks urges Barnes & Noble to punish Random House for not hopping aboard the pricing agreements that the other publishers had agreed to with Apple. This type of email is evidence that the DOJ will point to as attempting to police or enforce a collusive agreement. In other words, if there is only conscious parallelism why would Shanks need Random House to engage in the same type of pricing. That is one piece of evidence that seems to rule out independent action.

There is absolutely nothing strange about this nor is there any reason to think Shanks wasn’t acting totally independently.

Remember that Barnes & Noble entered the ebook market with the Nook in November 2009. They were very explicit and clear with all their trading partners that the Amazon pricing was a big problem for them. You don’t need to have it spelled out to you or be a rocket scientist to see the unpleasant consequences of having to give away all that ebook margin: fewer brick stores, less resources to develop the Nook against the Kindle, and perhaps the need for more margin from the publishers on the print and store side. All the publishers were aware of that.

When Random House stayed out at first, some people were confused about that choice but the insiders understood that they had “gamed the system”. Now they’d sell their ebooks to Amazon at the old (higher) wholesale prices and get the benefit of the lower retail prices because they had the branded loss leader category to themselves. And perhaps they’d even get better treatment from Amazon on their print books too, because, after all, their titles were the ones Amazon could promote which would promote their ebook pricing policy at the same time.
I can tell you that this caused massive teeth-gnashing at all the other houses. But there was, actually, not a damn thing they could do about it. They had to swallow lower revenue per copy for their books as well as a price-disadvantage in the marketplace and they did it because they thought leveling the playing field on price was so critical to their futures. Meanwhile, from their perspective, the biggest player sat out the fight.

And from Random House’s perspective, they did the best thing for their owners and their authors.

At the time, all the other houses were aware that they had done all this partly for B&N and that B&N was presumably being hurt by Random House’s unwillingness to go to agency, and, dammit, why wasn’t Barnes & Noble doing something to push Random House in the right direction?

LINK

This is pretty "inside baseball" but it is a plausible explanation for the Penguin email. Remember, the burden of proof on the DoJ to prove its case, not on Penguin to disprove it. If its 50-50 on the issue of whether Penguin was acting iindependently here , Penguin wins.

[Rob Lister]

Originally Posted by joehunt

I find Steve Jobs' take on piracy very interesting. I wonder if the [Conspiring Publisher] really bought the argument that non-availability at Amazon would encourage piracy while high prices would not

Probably from the ultimate truth of it, at least for some (rather wide, I think) segment of the population curve.

[crich70]

It does sound like Mr. Jobs was talking about what would happen if x were the situation. It's hard to know the actual context of what he meant when parts are just excised from a document rather than being able to question the person themselves. Of course they have the perfect excuse why they can't ask Mr. Jobs about the document. You can't question the dead after all. It sounds like they've forgotten the old saying (I don't know the latin) i.e. "Speak not evil of the dead."

[howyoudoin]

Originally Posted by crich70

It does sound like Mr. Jobs was talking about what would happen if x were the situation. It's hard to know the actual context of what he meant when parts are just excised from a document rather than being able to question the person themselves. Of course they have the perfect excuse why they can't ask Mr. Jobs about the document. You can't question the dead after all. It sounds like they've forgotten the old saying (I don't know the latin) i.e. "Speak not evil of the dead."

That's a strange stance to take. Jobs functioned as a representative of Apple, and Apple doesn't get let off the hook just because their representative at the time happens to be deceased now.

[stonetools]

The BPH's ideas of publishing are all about control and making deals, hence their reliance on backroom conspiracies like the Price Fix scam and the earlier Windowing" Club at the expense of the authors, their own staff, and even their shareholders. Deals and hype are core; everything else they'll ditch. Proofereaders, designers, formaters, artists, and (yes) even accountants.

Yet the apologists persist in holding them up as beacons of virtue.

Whatever...

AS for virtue, I would imagine that NO ONE thinks that anyone is acting purely out of the goodness of their hearts here-not Amazon, not RH, not Macmillan, not BN. EVERY player is acting in their corporate self-interest-and indeed the consumer, who wants lower prices no matter what, are acting in THEIR ( perceived) self-interest

[Rob Lister]

Originally Posted by howyoudoin

That's a strange stance to take. Jobs functioned as a representative of Apple, and Apple doesn't get let off the hook just because their representative at the time happens to be deceased now.

Get off the hook for what? I still don't get how Jobs or Apple fits into this, except possibly as a witness.

[fjtorres]

Originally Posted by Rob Lister

Get off the hook for what? I still don't get how Jobs or Apple fits into this, except possibly as a witness.

Uh, the above quotes make it very "likely" they were the Prime Mover and definitely the key architect of the conpiracy.
(Note that the terms coming out of the "negotiations" were Apple's terms coming in.)
They weren't bystanders, they were essential participants in convincing at least *some* of the conspirators to join in.

[kennyc]

Better late than never.

And Apple was the prime mover for coalescing this illegal collusion.

[heySkippy]

It remains to be seen if it was illegal, or if it was, who performed illegal acts.

[stonetools]

The DOJ case is :
1. weakest against Apple
2. weak against Macmillan
3. best ( at this point) vs Penguin

The answer by the defendants is due any day now ( I think). Once we have some idea of the defense arguments, we'll be able to judge better how the case will turn out .

[DiapDealer]

Originally Posted by stonetools

The answer by the defendants is due any day now ( I think). Once we have some idea of the defense arguments, we'll be able to judge better how the case will turn out .

Or at the very least, have a better idea of how best to proceed with regard to the spin, huh?

I mean... surely BPHs' overall image now is far more important to them than the distant outcome of some drawn-out legal proceeding. I'm fairly certain they'll easily survive any punishment (if found guilty of anything) that the DOJ might dole out—providing of course, that they ultimately clear the even higher "relevancy hurdle" that's always been looming in their path. And face it; that relevancy hurdle was what prompted them to knowingly risk collusion charges in the first place.