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December 19, 2012
The (Littlest) Cheese Stands Alone - So Sad
Tor's John Sargent has a year-end letter out, and it's kind of sad
. He notes that Macmillan/Tor continues to be the smallest of the publishers after the Penguin - Random House merger but is certain that won't matter.
He also notes that they're the last one standing in the DOJ suit over e-book price fixing. Penguin and Random House have agreed to the DOJ's terms, presumably so there won't be an impediment to the merger, leaving only one party to emerge from the court-ordered mediation process. If nothing changes, then trial is scheduled for June of next year.
It's sad that Sargent doesn't see the writing on the wall. He notes that they were sued by the DOJ, 33 individual states, a class action group, and the European Union. It's possible that all of those entities are wrong and Sargent is right. But I wouldn't bet on it. That's a lot of attorneys and attorneys-general who all saw the evidence and thought it was case-worthy. Maybe Sargent and his lawyers are smarter than everyone else on the planet, but I wouldn't bet on that either.
It's sad that Sargent can't see that the moves Macmillan have made precisely miss the mark. He's happy that his company have negotiated new agreements that "...allow 10 percent discounting on individual books priced at $13.99 and above..." Uh, whoop de do? We've had ample evidence in recent months that there's a lot of market to be made in lower-priced e-books. If Macmillan can't make money with its current cost structure on lower-priced books then maybe the right thing to do is change that structure, not forbid discounting. Macmillan's new agreements are still too restrictive, despite his claims that "[a]ll the new contracts are compliant with the government’s requests in their complaint."
It's also sad that the government's settlement offer is so awful and they won't budge. They believe they have a winning hand (particularly now that everyone else has settled) so there's little incentive to budge, but the fact remains that the DOJ is pretty much handing Amazon the e-book world on a plate. That's unnecessary, and will result in a monopsonistic environment. The DOJ could have been much smarter about this, though given its track record with, say, financial institutions it's doubtful anyone inside there knows how to craft any sort of settlement. But I digress.
The saddest part of Sargent's missive is that he doesn't yet have good data on the effect of going DRM-free. The most revolutionary and potentially freeing move in e-books in 2012 is likely to be swamped by the effects of the suit and trial to come.
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