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Publishing News: DoJ lawsuit is great news for Amazon

The DoJ sues Apple and five major publishers, Yahoo files patents to put ads in ebooks, and B&N one-ups Amazon.

Here are a few stories from the publishing space that caught my eye this week.

Amazon does a little Snoopy dance

DoJSeal.pngThe biggest story this week was the U.S. Department of Justice (DoJ) filing a lawsuit against Apple and publishers Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin, accusing them of colluding over ebook prices. If you unplugged or dropped off-grid for the past several days, solid roundups and analyses can be found with Tim Carmody at Wired and Laura Hazard Owen at PaidContent, and you can read the complaint itself here (PDF).

Right off the bat, three publishers — Hachette, HarperCollins and Simon & Schuster — settled, and Macmillan and Penguin stood their ground. Amazon responded to the situation almost immediately as well:

“This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books.”

Book publishing analyst Michael Norris told the New York Times: “Amazon must be unbelievably happy today. Had they been puppeteering this whole play, it could not have worked out better for them.”

Apple finally responded yesterday. As reported by Peter Kafka at All Things Digital, Apple spokesman Tom Neumayr said:

“The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.”

Much discussion and analysis has ensued in the aftermath — and I’m sure it will continue in the coming days and weeks.

Some are purporting that even if the collusion between the publishers proves to be true, Apple might walk away squeaky clean. A report at CNET noted why this may be the case:

“One reason lies in the Justice Department’s 36-page complaint, which recounts how publishers met over breakfast in a London hotel and dinners at Manhattan’s posh Picholine restaurant, which boasts a “Best of Award of Excellence” from Wine Spectator magazine. The key point is that Apple wasn’t present.”

Bryan Chaffin at the Mac Observer argued that yes, collusion most probably occurred but that it will be a mistake to undo it: “Doing so will clear the way for Amazon to dump books below price, taking ever more share (and power) in the book industry — that is the greater anticompetitive threat.”

On the flipside, Mike Cane argued on his xBlog that the suit didn’t go far enough and that the DoJ needs to sue Apple again. In a letter sent to all of the Department of Justice attorneys listed in the antitrust suit papers filed, he said:

“The advantage iPhone and iPad owners have in using the iBooks app is that they can browse and purchase eBooks from within that app. It’s a seamless customer experience.

By contrast, all eBook apps from competing eBook stores — such as those from Amazon, Kobo, Barnes & Noble, and others — cannot offer an identical shopping experience. They are disallowed by Apple. Apple has demanded from each of its iBookstore competitors a 30% cut of any purchases made using Apple APIs for what is called ‘in-app purchasing.’

To me, this is every bit as much restraint of trade as the collusive price-fixing that made the Department bring Apple and its co-conspirators before the court for remedy.”

Individual U.S. states have thrown in as well: 16 State Attorneys have filed suit, alleging that agency pricing cost consumers $100 million.

Earlier this week before any suits were filed, at least two of the Big Six publishers refused to sign new contracts with Amazon. It will be interesting to see how this all plays out and whether or not publishers are spurred into action to do more to prevent Amazon from totally monopolizing the market, such as dropping DRM.

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Just about a year ago, Amazon introduced an ad-supported Kindle at a reduced cost in exchange for the consumer enduring ads on the home and screen saver pages. Now, Yahoo has filed patent applications that indicate a plan to bring those ads directly into ebook content. A report at the BBC explained:

“The filings suggest that users could be offered titles at a variety of prices depending on the ads’ prominence. They add that the products shown could be determined by the type of book being read, or even the contents of a specific chapter, phrase or word … It suggests users could be offered ads as hyperlinks based within the book’s text, in-laid text or even ‘dynamic content’ such as video. Another idea suggests boxes at the bottom of a page could trail later chapters or quotes saying ‘brought to you by Company A.'”

From a revenue perspective, ads in ebook content makes all kinds of sense. From a reader perspective, I just hope there’s always a price point for those of us who prefer to do our reading sans corporate sponsorship.

B&N one-ups Amazon

A close friend recently told me a story highlighting an issue with his Kindle: While reading in the car on a road trip, he had to give up his Kindle and resort to the Kindle app on his iPad to keep reading when it got dark. Maybe he should have waited and bought a Nook.

B&N introduced the Nook Simple Touch with GlowLight this week — the first e-ink device to employ light. Alexandra Chang described the device in a post for Wired:

“The GlowLight resembles B&N’s flagship Nook Simple Touch — same 6-inch touchscreen display, same size and includes the same internal parts. The Nook Simple Touch with GlowLight, however, is slightly lighter at just 6.95 ounces, compared to the Nook Simple Touch’s 7.48 ounces … The GlowLight technology consists of LED lights located at the top of the Nook’s screen and an anti-glare screen protector. The light is evenly scattered across the screen and is adjustable via the menu.”

The timing of the release is interesting, as rumors surfaced last week that Amazon was readying a front-lit display for its Kindle device.

Seal: US-DeptOfJustice-Seal, on Wikimedia Commons

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