Apple Music, iTunes Movies and iBooks finally land in China, days after release of iPhone 6S, 6S Plus

1 October 2015

From the South China Morning Post:

Apple has launched Apple Music along with iTunes Movies and iBooks in China and said the cloud-based music streaming service will roll out on Android phones this fall.

Apple will offer Apple Music subscribers access to a vast library of songs for 10 yuan (US$1.57) a month after an initial three-month trial membership, the company said in a statement.

. . . .

Movies on iTunes will start at 5 yuan for renting in high definition and 18 yuan for buying new releases in high definition, the company said.

Paid iBooks will start at 0.5 yuan.

Link to the rest at South China Morning Post and thanks to Michael for the tip.

Summary Judgment Motions Filed in E-book Price-Fixing Suit

23 September 2015

From Publishers Weekly:

Could another e-book price-fixing case against Apple soon head to trial? After a quiet period, summary judgment motions were filed last week in a case in which three defunct e-book retailersclaim that the 2010 conspiracy among Apple and five publishers to fix e-book prices forced them out of business.

The suit, first filed by Australian upstart DNAML in September of 2013, and later joined by Lavoho, LLC, a “successor” to the Diesel eBook Store and Abbey House Media, formerly BooksOnBoard, alleges that the fledgling e-book businesses were harmed “directly and as a proximate result” of the 2010 price-fixing scheme executed by Apple and the five agency publishers (Hachette, HarperCollins, Simon & Schuster, Macmillan and Penguin). In the retailers’s bid for summary judgment, filed last Friday, they argue that the facts of the case—already adjudicated by the court in Apple’s case and affirmed on appeal—are sufficient for Judge Denise Cote to grant summary judgment to DNAML “on the element of liability.”

The retailers contend that the 2010 agency switch “devastated” their nascent business models, which were based on bundling and other discount-driven promotions.

At press time, Apple’s and the publishers’ briefs supporting their motions for summary judgment were not yet public. Both the publishers and Apple have previously argued, however, the nascent retail businesses were hardly players in the e-book market, and could have folded for many reasons.

. . . .

 Cote held that the retailers could pursue the case. It is “more than plausible that a discount retailer was harmed by a conspiracy to remove retailers’ ability to discount e-books,” she found, adding that the retailers were “indisputably competitors in a market in which trade was restrained.”

Link to the rest at Publishers Weekly

PG thinks you shouldn’t hold your breath on this one.

Will the Supreme Court Take Apple’s E-Book Appeal?

19 September 2015

From Andrew Albanese at Publishers Weekly

As expected, Apple attorneys this week confirmed that they will be seeking a Supreme Court review of Judge Denise Cote’s 2013 verdict finding them liable for a conspiracy to fix e-books prices. The question now is: will the Supreme Court take the case?

“I think, and have always said, that the Supreme Court taking the case is very unlikely,” says Christopher Sagers, law professor at Cleveland State University, and a close follower of the case. Sagers reiterated what he told PW this summer after an appeals court affirmed Cote’s ruling: “It’s a fact case, and I can’t imagine what the circuit split will be,” he said.

. . .

Apple has brought on some major firepower to help with its appeal, hiring Seth Waxman, the 41st Solicitor General of the United States, and a familiar figure before the Supreme Court.

. . .

In June of this year, a three-judge panel of the U.S. Court of Appeals for the Second Circuit strongly affirmed Cote’s “per se” handling of the case, calling the decision “amply supported and well reasoned.” But, in a headline-grabbing dissent, one member of the appeals panel, Judge Dennis Jacobs, sided with Apple.

. . .

If the Supreme Court ultimately rejects Apple’s petition for cert, its liability finding would be considered final under a 2014 settlement with 33 states and a consumer class, triggering $400 million in consumer rebates.

Link to the rest at Publishers Weekly

Posted by Vacation Substitute Blogger Bridget McKenna, who predicts we <i>will</i> see the last of Apple appeals if the Galactic High Court refuses to hear the case.

‘Machine’ shows Steve Jobs’ dark side

6 September 2015

From USA Today:

The latest chapter in telling the story of the late Apple co-founder Steve Jobs’ life focuses on the dark side.

The tagline for “Steve Jobs: The Man In the Machine,” is “Bold. Brilliant. Brutal.”

Spend two hours watching this film, and you’ll see a lot of “brutal.” You might feel pretty icky by the end of the showing.

We know that Jobs is revered as one of the most dynamic business leaders of our lifetime, our generation’s Walt Disney. He gave the world the most beloved tech products of our time — from the original Macintosh computer to the iPod, iPhone and iPad. He could sell them more effectively than anyone or any company.

You see some of that in Gibney’s film.

But when all is done, you walk away learning that the man was a revered monster, horrible to most everyone around him, someone who skirted the system, cheated credits and made his products as cheaply as possible, in inhumane conditions so horrible some responded with suicide.

. . . .

The Jobs family and Apple declined to cooperate with Gibney, so he interviews former Apple execs, journalists, academics and Jobs’ former girlfriend, the mother of his first child, Lisa.

. . . .

Jobs was almost God-like in his press portrayals when he was alive, and even more so since, so it’s natural that Gibney set out to present a warts-and-all treatment of the former Apple co-founder.

Which is fine, but it’s not a complete picture.

. . . .

“He made you want to work with him to change the world,” says Andy Cunningham, who worked with Jobs from 1983-98 as his publicist. “He was not a very nice person, he could be humiliating and demanding, and there was anger involved, but he was an incredibly inspiring person, and that made you want to be on his train.”

Link to the rest at USA Today and thanks to Dan for the tip.

Apple’s mistake was hooking up with the book-publishing cartel

1 July 2015

From Fortune:

An appeal court’s decision finding Apple guilty of collusion with publishers reinforces just how cozy a cartel the industry was.

Apple may be trying to keep the spotlight on its latest foray into the streaming-music business, but it is also still trying to clean up the mess caused by its ham-handed entry into an earlier market: book publishing. A federal court on Tuesday rejected the company’s appeal of an earlier ruling that found it guilty of orchestrating a conspiracy with the major book publishers, in what the court said was a successful attempt to artificially inflate the price of e-books.

As Fortune‘s Jeff Roberts reports, the court found Apple engaged in collusion with what amounted to an oligopoly—namely, Harper Collins, Penguin, Simon & Schuster, Hachette and Macmillan—and that its actions were a clear breach of antitrust law. Apple argued that the deal it cut with the publishers was necessary to blunt Amazon’s dominance in the e-book market, but the appeals court didn’t buy that argument. Judge Debra Ann Livingston wrote:

“Competition is not served by permitting a market entrant to eliminate price competition as a condition of entry, and it is cold comfort to consumers that they gained a new ebook retailer at the expense of passing control over all ebook prices to a cartel of book publishers.”

One reason the court failed to buy this argument is that the major publishers clearly had zero interest in actually competing on price—in fact, they wanted to do exactly the opposite. Their interest in doing a deal with Apple stemmed from a desire to maintain the existing favorable price structure for books, which allowed them to milk the market for high-priced hardcover versions of new novels before eventually releasing cheaper versions. Amazon’s low-priced e-books were a threat.

. . . .

The fact that the book industry was a cozy cartel is reinforced by the court’s description of how the publishers behaved even before Apple came along: They “operated in a close‐knit industry and had no qualms communicating about the need to act together,” the ruling says, quoting from the lower-court decision: “On a fairly regular basis… the CEOs of the [Big Six] held dinners in the private dining rooms of New York restaurants, without counsel or assistants present, in order to discuss the common challenges they faced.”

Since the publishers didn’t compete with each other on the basis of price, the appeals court decision says, “publishers felt no hesitation in freely discussing Amazon’s prices with each other and their joint strategies for raising those prices.”

. . . .

After strong-arming Amazon into accepting the new “agency pricing” model—in which the publishers got to set the price for their books, rather than allowing the retailer to do so—the book industry got exactly what it wanted. According to research by the Justice Department, the price of newly released books rose by an average of 24% and bestsellers climbed by 40%.

It says a lot about the book-publishing business that doing this actually caused book sales to drop fairly dramatically across the board: research done by another expert using data from Random House showed that publishers who switched to the agency model sold close to 15% fewer books than they would have otherwise. So the industry was effectively willing to trade a short-term decline in sales for the increase in power that they got over pricing as a result of the deal with Apple.

Link to the rest at Fortune and thanks to Michael for the tip.

Apple Loses Federal Appeal in E-Books Case

30 June 2015

From The Wall Street Journal:

A federal appeals court on Tuesday upheld a 2013 decision finding Apple Inc. liable for conspiring with publishers to raise the price of e-books.

The 2-1 ruling Tuesday by the Second U.S. Circuit Court of Appeals in Manhattan follows three years of litigation, millions of dollars in legal fees and a bold decision by Apple tochallenge the U.S. Department of Justice to a trial, even after all the publishers with which it was accused of colluding had settled their cases.

The iPhone maker is expected to pay $450 million, most of it to e-book consumers, as part of a November agreement with private plaintiffs and 33 states that joined the Justice Department’s 2012 lawsuit accusing Apple of violating civil antitrust law. The deal hinged on the outcome of the appeal. The penalty amounts to less than 3% of the Cupertino, Calif.-based company’s profit in the quarter that ended in December.

“We conclude that the district court correctly decided that Apple orchestrated a conspiracy among the publishers to raise e-book prices,” wrote Second Circuit JudgeDebra Ann Livingston. The conspiracy “unreasonably restrained trade” in violation of the Sherman Act, the federal antitrust law, the judge wrote.

. . . .

At the time, publishers were dissatisfied with Amazon’s aggressive discounts. Apple’s agreements ceded the power to set prices to the publishers, in what’s known as an agency model. But there was an exception: If another retailer were selling an e-book at a lower price, the publisher would have to match that price in Apple’s bookstore.

With a new outlet for their e-books, the publishers had the leverage they needed to reclaim some pricing power from Amazon, Justice Department lawyers said. Change was inevitable: The publishers couldn’t afford to sell their e-books in Apple’s store at Amazon’s discounted prices of $9.99 for most best sellers.

Prices on many e-books increased immediately. Lawyers for Apple said the company unwittingly facilitated the push against Amazon by the publishers.

But the Second Circuit majority said the evidence showed the technology company knew what it was doing.

“Apple understood that its proposed contracts were attractive to the publisher defendants only if they collectively shifted their relationships with Amazon to an agency model — which Apple knew would result in consumers facing higher e-book prices,” Judge Livingston wrote in a decision joined by Judge Raymond J. Lohier Jr.

Link to the rest at The Wall Street Journal (Link may expire) and thanks to Nirmala for the tip.

When PG first read the trial court’s opinion, he was impressed by two things:

  1. The good job the trial judge did in analyzing the evidence in the case and crafting an excellent opinion that was unlikely to be overturned on appeal.
  2. How amazingly inept the the price fixing conspirators in Big Publishing and Apple were. The evidence showed them to be a bunch of bumblers and their testimony during trial did nothing to ameliorate this impression.

In a nutshell, Apple can now ask for a rehearing in front of the three judges who just ruled against them or an en banc hearing before all the judges in the Second Circuit or try to persuade the Supreme Court to accept an appeal.

PG doubts any of these paths would change the result in this case.

He will warn all and sundry to expect sporadic outbreaks of Amazon Derangement Syndrome.

Publishing’s Swiftian future

23 June 2015

From Futurebook:

Publishing has a new question to ponder this week: what could Taylor Swift do for us? Swift’s triumph: she got a tech giant to change its mind.

In an open letter to Apple, Swift said she was withholding the record, 1989, from Apple’s new music streaming service, Apple Music, because she was unhappy with the three-month free trial offered to subscribers. “I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company,” wrote Swift. “Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing.”

The blog prompted the following response from Eddy Cue, Apple’s senior vice president of Internet Software and Services,

“#AppleMusic will pay artist for streaming, even during customer’s free trial period”

“We hear you @taylorswift13 and indie artists. Love, Apple”

. . . .

Speaking to Billboard magazine Cue said they had already been been hearing “a lot of concern from indie artists about not getting paid during the three-month trial period” before Swift spoke out. Apple had sought to ameliorate the three-month royalty free window by paying a higher rate after the initial period. Now it will pay artists during the free period, and retain the higher fee afterwards. Still, Apple can afford it.

Could a little bit of Swiftian kick-back help the book business too? It is worth contrasting Apple’s manoeuvre with the changes Amazon made to how it will pay indie writers signed up to its all-you-can-read Kindle Unlimited (KU) and the Kindle Owners Lending Library (KOLL). The change (in brief) is that from 1st July authors with books in those schemes will no longer be paid their percentage of Amazon’s pool of money once 10% of a book has been read, they will now be paid based on what the number of pages read, after the Amazon-mandated “Start Reading Location” (SRL).

. . . .

Much will be written once the impact of the change hits. However, what I have read less about is how, in altering its payment terms, Amazon itself was responding to artist feedback. As the company noted: “We’re making this switch in response to great feedback we received from authors who asked us to better align payout with the length of books and how much customers read.”

In his two blogs about the subject Hugh Howey notes his own influence: “We have different degrees of leverage. I’ve tried to use my leverage to win concessions for all authors. A number of the bestselling authors have done this. We ask for pre-orders for everyone as soon as possible. Better reporting. More categories. All kinds of stuff. I pressure Amazon to extend the 70% down to 99 cents for shorter works, which I think is fair. I give them hell about the exclusivity requirement every chance I get, from the bottom of the ladder to the top.”

There is something intriguing about the growing power of individual artists or collectives—like Howey, Swift claims to be speaking up for those who don’t yet wield the same power as her, “This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success.”

. . . .

Similarly, one wonders how indie authors outside of the elite group feel about Amazon’s change in terms. Many were co-opted into Kindle Unlimited without prior request because Amazon felt compelled to move against Scribd and Oyster, and though writers can opt out, the fund from which Amazon generates payments (though it has risen month on month) is still entirely made-up. Now how writers get paid has changed too—and without any sense of their being any negotiation. It is an extreme scenario, but not one we should feel entirely comfortable about.

. . . .

A more pertient question book publishers should be asking, is not what could Taylor Swift do for them, but how the music business got into a position where it had to rely on a single artist to run its negotiations for them.

Link to the rest at Futurebook

PG isn’t an expert in the music business, but does know enough to wonder which industry treats its artists worse, music or publishing.

It’s not hard to treat authors better than Big Publishing does, so Amazon can consistently do so without breaking a sweat.

For example, PG doesn’t think the Authors Guild project to improve publishing contracts has attracted enough attention or analysis.

The list of contract provisions AG wants traditional publishing to change is an indictment of the industry’s horrible treatment of its authors. Even prisoners in the Soviet Gulag were released from oppression when they died. Under life-of-copyright contract terms, the maltreatment of authors continues down to their heirs.

As PG has mentioned before, in his experience with American business contracts across a wide variety of industries, no other group of (supposed) competitors offers such one-sided agreements whose terrible terms are so uniformly applied as does New York publishing. One might suspect collusion was occurring.

To make one point of comparison, which major New York publisher has provided any explanation of changed contract provisions impacting how authors are paid as Amazon has with its KDP Select Global Fund announcement?

Amazon treats authors as business partners. No one will contend that the partners have equal power, but with actions such as paying authors on a monthly basis, providing all authors with detailed sales information in close to real time, allowing authors to opt out of some royalty programs and choose which countries in which Amazon can sell their books, Amazon is miles and miles ahead of Big Publishing in the “authors are our partners” race.

If Taylor Swift were a megastar author, she would be condemning Big Publishing for underpaying authors at least as vigorously as she attacked Apple for underpaying musicians.

Is Apple Music the ebooks antitrust case all over again?

13 June 2015

From Fortune:

State attorneys general in New York and Connecticut are the latest to poke their nose into Apple’s arrangements with record labels, seeking out possible antitrust activities. The whole thing, however, feels less an illegal conspiracy than a stunt cooked up by competitors and politically ambitious regulators.

In case you missed it, news of the two investigations came the same week as the launch of Apple Music, a new service that will let users stream songs for $10 month. The state attorneys general, who say they want to find out if Apple and the record labels are conspiring to squeeze out “freemium” streaming services like Spotify, are following similar inquiries by the FTC and the European Union.

News accounts were quick to note that Apple has been here before, pointing to the company’s role as the mastermind of conspiracy in which publishers fixed the price of ebooks (a judge found Apple liable, but an appeals court is still weighing the verdict).

. . . .

“If Apple is doing independent agreements, that’s fine. There’s nothing illegal with Apple coming out with a paid subscription service,” said Andre Barlow, an Washington-based attorney who formerly worked on antitrust cases at the Justice Department. “These preliminary investigations are likely the result of competitors’ complaints.”

Barlow added that Apple would only face antitrust trouble if it had tried to create collusion between the record labels or abused dominant market power. Collusion is very unlikely, he said, given that Apple is currently subject to an antitrust monitor and because both the company and the record labels would be wary about improprieties in the wake of the high-profile ebook trial. In other words, Apple and the labels would be crazy to even try something shady in the first place.

As for abuse of market power, Apple’s influence has waned significantly in the music market since its heyday as a digital music selling powerhouse. In the realm of music streaming, Apple will be just one more player in a crowded market that already consists of Spotify, Rdio, Pandora, Tidal, YouTube, Rhapsody SoundCloud, and others. Apple will be hard-pressed to contend in this field, let alone dominate it.

Link to the rest at Fortune and thanks to Cheryl for the tip.

Apple Loses Bid to Oust Monitor

29 May 2015

From Publishers Weekly:

In a minor setback for Apple, a three judge panel of the Second Circuit Court of Appeals has denied the company’s bid to oust its court-appointed monitor, Michael Bromwich. In a brief opinion and order, Judge Dennis Jacobs, writing for the court, held that Judge Denise Cote did not abuse her discretion in appointing and retaining Bromwich, despite Apple’s objections, and that the monitor’s conduct was “appropriately constrained by the injunction and by other powerful restraints of law.”

Bromwich was appointed in October, 2013, after Judge Cote found Apple liable for its role in fixing e-book prices with five publishers. In her September 4, 2013 final order, she appointed the external monitor for a two-year term with a narrow mandate: to ensure that an antitrust training and compliance program was put in place at Apple that was “sufficient” and “reasonably designed to detect and prevent violations of the antitrust laws.”

Apple, however, has bristled over Bromwich’s work from the beginning, and Apple attorneys have sought to have him disqualified. DoJ attorneys counter that Apple is guilty of openly obstructing Bromwich’s work, and waging a “campaign of character assassination” against him.

“Apple simply does not want any monitor whatsoever,” DoJ attorneys concluded in one court filing, and “manufacturing these baseless objections is the only way it apparently believes it can achieve that result.”

Notably, Judge Dennis Jacobs is also part of the panel that will decide Apple’s main appeal over its 2013 liability verdict.

Link to the rest at Publishers Weekly and thanks to Chris for the tip.

Apple Releases iBooks Author Starter Kit

18 May 2015

From Ink, Bits & Pixels:

Apple’s on again, off again interest in iBooks is on again as of last week. Bradley Metrock noted on LinkedIn on Friday that Apple has released a how-to book for iBooks.

iBooks Author Starter Kit is a no-frills beginner’s guide which lays out all the steps required to produce an ebook in iBooks Author. The Starter Kit walks a user through a detailed set of step-by-step activities, and provides all of the materials required to create a basic interactive book, including an iBooks Author template, images, color palette, copy decks, videos, keynote presentation, and more.

. . . .

While I think that Apple has been generally disinterested in iBooks, this book was published only days after we learned that iOS 8.4 will enable iPhones to read ebooks produced by iBooks Author.

Link to the rest at Ink, Bits & Pixels

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