DOJ files antitrust lawsuit against publishers

by Alexandra Sokoloff

Last week there was some publishing news so big that I’ve been wondering ever since why we haven’t been talking about it here.  But it’s like that classic left-wing admonition:  “I looked around me at what was happening and wondered why somebody wasn’t DOING anything about it… and then I realized I WAS somebody.”

Oh, that’s right.

So, unqualified as I am to write this post, today I’m posting about it.  I’m going to keep it short and mostly link to more qualified sources so that you all can use your Murderati time today to catch up, if you haven’t been following along.  The news, of course, is that the Department of Justice has filed an antitrust lawsuit against Apple and five of the Big Six publishers, alleging collusion in e-book prices and sales models.

If you haven’t read about it, do that first, here.

So what does this mean for us as authors, exactly?

I have no idea. 

I can’t imagine it’s going to be good for advances for traditional book contracts, which have been dropping steadily over the last few years even before this.  Damages are being claimed for consumers of e books and not for the authors who have suffered from publishers fixing prices far too high for e books, so there’s no restitution coming there.

What I do know is that it’s going to mean SOMETHING.

Joe Konrath tends to be right about these kinds of things, so I’d highly recommend reading this blog of his and subsequent ones as this case progresses.  And April Hamilton has summed up quite a few of the arguments going on in the publishing world over all this.

What I DON’T recommend is ignoring it as if it’s some esoteric business thing that has nothing to do with you.

Writing a book is so hard all on its own that it’s very distracting and anxiety-provoking to have to speculate on how something like this lawsuit may affect your own ability to make a living.  I know.

When I was a screenwriter, the life was so 24/7 crazy that I adopted the head-in-the-sand attitude of most screenwriters:  “Oh, I don’t have time to keep up with union issues, I am Too Busy with Very Important Writing.”

That is, until an assault by some highly-paid screenwriters on the WGA credits rules so floored and angered me that I got politically involved, so involved that I ended up running for and winning a seat on the WGA Board of Directors.

Now, that wasn’t the brightest career move I could have made, because in truth NO ONE has the time to write and serve on a union Board of Directors at the same time.  But being on the board did put the reality of the business changes that were going on in the film industry right in my face.  Unignorable. 

And what I realized was – I’ve got to get out of this.  It’s not sustainable.  If the film business model is going to keep changing in this direction, I personally won’t be able to make a living as a screenwriter in five or six years. Which were remarkably coherent thoughts for such a right-brained person as I am, actually. Absolutely not anything I wanted to think about, much less have to act on, but I knew I couldn’t not act.

And I started putting my eggs in other baskets and writing novels while I watched things steadily get worse for screenwriters.

Now I’m making a comfortable living as an author, while a lot of my screenwriter friends have lost their houses and/or haven’t had a film job in years.

I’m not trying to sound dire, especially when I’m being so vague about what all this will mean for us. And of course the news that the publishing industry is undergoing a massive sea change is no news at all for anyone who’s been paying any attention over the last few years.  But I do find some authors’ reactions to all of this perplexing, and the idea of silence on the issue alarming. I may not be an expert, but I know this is not a good time to stick my head in the sand.

So I urge you to click through some links, do your own Googling, and be informed. It IS our business.

Alex

19 thoughts on “DOJ files antitrust lawsuit against publishers

  1. Stephen Jay Schwartz

    Thank you, Alex, for bringing this to my attention. I was busy burying my head. I'm going to spend some time today reading the blogs and articles you have linked here.

  2. Reine

    Alex, it is dire. I have been following it, more as a reader than writer.

    I had heard of the antitrust lawsuit against Apple and five of the Big Six, but the reality didn't sink in until I saw the ebook promotion for The Casual Vacancy by J.K. Rowling (September 27, 2012 Launch Pre-order). The KINDLE version is being offered at $19.99, only 96β‚΅ less than the hardcover version.

    I know how that impacts me as a reader. How do you think that will impact published authors?

  3. Alexandra Sokoloff

    Wow, 19.99. That's a record. I think that has more to do with Rowling and the fact that people will pay it for something of hers than a trend, though – actually publisher e book prices have dropped. Not enough, but they have dropped.

    I think the publishers who are staying in to fight the suit will lose and e book prices will have to go down. Whether they'll go down far enough to maximize sales is another story – I simply don't know. There's a lot I don't know, except that publishers aren't doing anything now that is good for the vast majority of authors and I don't think they will in the future, either.

    For myself, I'm more concerned about the level of denial going on with big publishers than anything else.

  4. Lisa Alber

    Whenever this comes up, I also start thinking about Amazon, its shady practices, and its impact. Indy authors tend to adore Amazon, but I'm ambivalent about it. Alleged collusion isn't good, but aren't the traddy publishers simply trying to compete with Amazon? On the other side of the coin, do we really want Amazon to be the ONLY player in the epublishing (and now of course, they're turning to traditional too) world? Monopolies are not good. Amazon's practices leave something to be desired. Traddy publishing's practices also leave something to be desired. It's all a mess.

    Of course, I don't know what I'm talking about because the whole thing confuses me. I swear I read somewhere that JofD was also going to look at Amazon…

    I find it funny when indy authors talk about Amazon as if Amazon really cares about their welfare. It doesn't. All it cares about it marketshare and profits.

  5. Alexandra Sokoloff

    Lisa, I don't know that any indie author thinks that Amazon cares about their welfare. Amazon's model of marketshare and profits benefits them, that's all. And Amazon doesn't tie up publishing rights, so if that model changes, authors are free to go elsewhere. That's key. I can't even begin to express how key that is.

  6. Lisa Alber

    Excellent point about tying up rights. That is huge.

    Quick question: Do traditional publishers offer authors a percentage of e-book sales? Or are these rights still sold off, lump sum, and the author gets nothing more after that?

  7. Alexandra Sokoloff

    The e book rights are included in the lump sum advance. Theoretically if you earn out, you get more beyond the advance, but that very rarely happens.

    A good agent will have negotiated the contract so that once a book drops below a certain sales level in print, the author will be able to get the rights back. That is, a publisher can't claim that a book is "in print" if the only sales are e book sales. Unfortunately, a lot of authors DON'T have that contract.

    Since we're talking about numbers, trad publishers are offering a standard 25% royalty for e books. Amazon – 70%.

  8. Tom

    What Alex said: *read the links*, because they give clear explanations of why old business models are inadequate. To whom do we sell? We sell to readers. Why will they choose to buy here and not there? Because the seller 'here' is determined to meet the desires of our mutual customers and offer them better choices.

    I think it was April Hamilton's blog that referenced WHO MOVED MY CHEESE?, a fine book on how we must all adapt to changing markets, whatever our work. History proves it; evolution is the descriptive term for it. Who adapts most quickly will prosper most.

    Seven years ago my esteemed spouse and I produced and presented a writers' conference. We offered classes on craft and business of writing – and the electronic future of publishing was already inscribing fiery characters on many walls. I went to lots of writers' organizations here in LA to promote the event. At the Los Angeles Science Fiction Society, my assertion that publishing was undergoing great changes met with an angry rebuttal from one of the Great Names in the business. "'Undergoing great changes? And *you* know this HOW????'" he asked.

    I owned 20 or 30 e-books at the time. Today, I have yet to see one of his titles as an e-book. I wonder if he realizes that, just as he was responsible for his prior great success, he can now be responsible for his own failure by only doing what he always did.

    Amazon is not our friend, nor must they be. They are just the means to avoid an untimely end.

  9. Alexandra Sokoloff

    Tom, I've never read WHO MOVED MY CHEESE? but you remind me that I should. Thanks! I'll order it right up on my Kindle.

    Hmm. Would I have said that a year ago? Not at all.

    I feel kind of late to the party to even be saying something like this, but I was at Left Coast Crime just a few weeks ago and it was astonishing to me how many authors I talked to DON'T have Kindles or any other e reader.

    ??????????????

    This is THE platform for reading, now. How can an author expect to understand the monumental changes going on in the industry if they're not even sampling the delivery system that has created all of this chaos and opportunity?

    You HAVE to have an e reader, and USE it, to understand how books are being purchased these days. It's about instant gratification and flexibility, people. But you can't possibly understand that unless you're using the system.

  10. Alexandra Sokoloff

    You're welcome, Lisa! This is one of the things I try to emphasize to writers about agents: it's your agent's JOB to negotiate the most beneficial contract, so you need to hold out for an agent who has the power to demand that. Signing with the first agent who likes you is career suicide – you need an agent who can get you the contract that will make you an actual living.

  11. Tom

    C.J. Cherryh got my attention 20 years ago when she told me she could write about 5 hours of the day, and then spent another 4 to 6 hours working on the business side of her career, i.e., the earnings statements, sales reports, reconciliations, publicity . . . but mostly managing the money side of the job.
    "It's not all pipe smoking and tweed jackets with leather elbow patches," she said. This is why she's had almost 4 decades at the top of her genre.
    Meanwhile, Alex, your last graph should be inscribed in stone, expecially, "It's about instant gratification and flexibility, people. But you can't possibly understand that unless you're using the system."

  12. KDJames

    Alex, I agree that we need to pay attention. Yeah, it's business and it's tedious and distracting as hell, but ignorance is never a good game plan. Especially these days when so many writers are going it alone and wearing all the hats.

    I think this lawsuit would be FAR scarier for writers if it had happened back when traditional publishers were our only option for reaching readers, before the popularity of ebooks and self-publishing [one might argue that there wouldn't be a lawsuit absent ebooks, but c'mon, does anyone really believe this is the first and only time they've ever (allegedly) colluded about anything?]. Because I do think most of those involved are going to take a significant financial hit as a result of it. They have enough lawyers on retainer, they should have known better. Allegedly.

    Those of us who are not yet published might be the ones most affected (among writers, that is) if it turns out that doing business with struggling traditional publishers is no longer even somewhat financially viable. Personally, I'd like to see that traditional option evolve into something that makes sense financially (for writers). Having choices is important; it gives us power in the marketplace. I hope they figure out a way to survive as an attractive and lucrative alternative for writers.

    Writer David Gaughran has a related post that I think is interesting. Like you, he tends to approach things in a matter-of-fact manner without a lot of vitriol, and I appreciate that:

    http://davidgaughran.wordpress.com/2012/04/16/dont-be-fooled-big-publishing-hates-competition/

    (trying to figure out a way to add even more parenthetical remarks to this comment) (oh…)

  13. Alexandra Sokoloff

    KD, I think you're spot on, first: >>>> I think this lawsuit would be FAR scarier for writers if it had happened back when traditional publishers were our only option for reaching readers, <<<

    Seriously. Thank god that's no longer the case.

    And –

    >>>>Personally, I'd like to see that traditional option evolve into something that makes sense financially (for writers). Having choices is important; it gives us power in the marketplace. I hope they figure out a way to survive as an attractive and lucrative alternative for writers.<<<<

    Amen to that!! I couldn't agree more.

    Great link! Thank you!!!

  14. PD Martin

    When I saw the title of your post I thought…oh good, someone to explain it all to me! I subscribe to Publishers Lunch and have been getting the news on this for a few weeks, but still don't really understand what it all means.

    One point I picked up on is that the prices of ebooks (from traditional publishers) are coming down and will continue to come down. That's an interesting point. On the one hand, it's great for readers and hopefully good for authors in terms of increasing volume. But as someone who's just moved into self-publishing on Amazon that could actually have a negative impact. At the moment, one of the things that makes self-published books desirable for readers (especially from authors who are already established and move into self-pub) is that they're cheaper than the ebooks from traditional publishers. I can see this sucks from publishers' POV – how can they compete? But from a self-pub author point of view it's a good way to increase volume sales.

    Of course, this is different again from an Aussie point of view. At the moment, our book prices are very high:
    Hardback RRP $45
    Trade paperback RRP $32.95
    Mass market paperback $19.99
    Ebook (vary a little, but it used to be the SAME as mass market ($19.99) and has come down over the past year or two). Pan Macmillan Australia now sell my ebooks for $11.81)

    And if you buy for kindle via Amazon, it does recognise you're from Australia and will only give you the higher $ (the Aussie price, even though buying from a US website). So what will the DOJ mean to Aussies, if anything? I have no idea.

    Anyway, I'm off to do some reading from the links above πŸ™‚

    Thanks for a great post, Alex. Guess I better get my head out of the sand and make more of an effort to read more content on this and understand what it means!

  15. Alexandra Sokoloff

    Well, PD, I think Konrath's blog on the whole thing will make you feel better – meaning his argument that lower e book prices will mean more books sold overall. It definitely made ME feel better!

  16. Gar Haywood

    Alex:

    As one of the dummies you spoke to at LCC who doesn't yet own an e-book reader, I'd like to thank you for this post and your ongoing effort to wise your fellow writers up to all the possible (probable?) consequences of the Apple/Six antitrust lawsuit.

    You are the Paul Revere of our times.

  17. Alexandra Sokoloff

    I don't believe the word "dummy" ever crossed my lips – or my mind. Or my computer screen.

    I don't know how often I can say this, though. You DON'T know what it's like to read on an e reader until you read on an e reader.

    It changes the way you think about books. It changes the way you purchase books. It is going to inevitably change the way we write books.

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