From Kristine Kathryn Rusch:
What does the DOJ case mean for writers, traditional or indie?
Um…no one knows.
Not yet, anyway. It depends on how things transpire. If MacMillan and Penguin settle, then we can actually discuss what the case means for us, if anything. Sometimes large corporate lawsuits have an impact on the vast business in its internal practices, but means nothing to the cogs in the machine (us small fry). Sometimes large corporate lawsuits change everything.
Is this one a game-changer? Again, we don’t know.
We would be having a different discussion if we worked at Penguin or Apple or MacMillan right now. Or if we worked at (or ran) Amazon or Barnes & Noble. (The announcement of the filing had an immediate negative impact on B&N’s stock price, for example)
. . . .
Why didn’t they go after Amazon? the pundits are asking. Amazon is the Big Bad here. Forgetting, of course, that the five publishers and Apple were responding to Amazon’s domination of the marketplace in 2008-2010 when the actions cited by the DOJ occurred.
And as Charles Petit points out, a resolution in this case will have an impact on Amazon and Amazon’s relationship to its publishers because Amazon also uses a term in its contracts that Apple used in its—the Most Favored Nation clause. This clause was specifically cited by the DOJ, and referred to in the settlement with the three publishers.
If the Most Favored Nation clause becomes poisonous in relationships between Apple and its publishers, then it follows that the clause will become poisonous to other retailers and the publishers they deal with.
. . . .
If you’ve read this blog for the past three years, you’ll notice that I often advise you to settle problems early to avoid even the possibility of lawsuit. For writers, that usually means making certain that you understand contract terms so that you know what you’re signing. You have to know what you’re giving up as well as what you’re settling for. You have to know how those terms will apply to a successful project as well as an unsuccessful one.
. . . .
The problem here for the publishing companies is that, as part of this suit, the Justice Department will be looking at book prices and profits. When you look at book prices and profits in an old-fashioned business like publishing, which has really not updated its computer systems to account for e-books in particular, you will be looking at accounting practices.
Accounting practices include royalty statements, and relationships with authors. Many of the bigger publishers have fudged the royalty statements and their e-book accounting systems, either deliberately or because of antiquated systems. See this post to understand what I mean. In at least one case, systems have not yet changed within the publishing house.
If the two publishers involved in the actual case change their accounting practices now, is it something the DOJ will look at as a way to avoid parts of the lawsuit? Is it just normal business practices? Or is it something more sinister?
Because as Blankenhorn writes, “actions that seem perfectly natural in any other context take on a whole new meaning” when antitrust lawyers are investigating a company.
. . . .
So what does this mean for writers?
As a writer who keeps one foot in traditional publishing, I’ll be keeping my eye on the earnings reports from MacMillan and Penguin, the sideways news stories that come out of this case, and on the companies’ overall good health. Because there is stuff to be found in the accounts of most traditional publishers due to old-fashioned systems, neglect, and long-standing disregard for contracts and contract terms. Today’s decisions by two major publishers will have an impact that will be felt in a variety of ways. We just don’t know what those ways are.
. . . .
In other words, folks, those of us publishing indie will actually benefit from this week’s press coverage—if we are willing to price our books above bargain basement pricing (free/99cents/$1.99). The media is repeating that $9.99 novels are bargains. And those listening with half an ear will absorb that thought, and never examine it. So when they see your e-book priced under $10, they know they’ll be getting a bargain.
And those folks pricing at 99 cents or $1.99? Well, their books will be treated like those books sitting outside a bookstore in bins to attract customers. Readers usually give those books a glance, then walk on by. Only readers looking for something special or bargain hunters actually stop.
Link to the rest at Kristine Kathryn Rusch