eBooks: Competition, reader rights and author remuneration

The title and some formulations in this post have been modified on 14 March 2012 to adapt them better to its subject.

Despite a very good article in the Wall Street Journal, most commentators struggle to find their way in the recent announcements regarding a possible antitrust action against 5 publishers and Apple. The difficulty lies in identifying the bad guys. On the other side, one finds Amazon, which, with its Kindle, its dominant share of the eBook market and its vertical integration including a distribution platform and now a publishing activity, is not exactly an angel. Stop searching: they are all bad guys, in particular when reader rights and author income are at stake. The only way to understand anything is to go back to basics.

The bright future of eBooks raises two essential questions:

  • Which rights and capabilities will exist for readers, and in particular how will they be able to share digital books between themselves without aim of profit, an activity that plays so important a role in the sociology of reading and the dissemination of the written culture?
  • Which synergy will exist between the eBook economy, the above-mentioned non-market sharing and the paper book economy?

Regarding the first question, as stated above, the publishing majors and the distribution platforms all agree: let’s eradicate the non-market sharing of books, using DRMs, contracts and (in France) laws. An example? A small US publisher contacted me to publish a translation of my Cause commune book, initially published with Fayard, a subsidiary of the Lagardère group. Then, noting that Cause commune had been distributed on the Internet under a Creative Commons license and that I would expect the same for the translation, he expressed his regrets, because the distribution platforms prohibit in their contracts any form of distribution at a price inferior to the one agreed for the eBook. That’s exactly what the Lagardère group and a few other publishers recently obtained in the Law on the unique price for digital books prepared with the subservient assistance of the French Ministry of Culture. Don’t panic if you intend to publish books in France, it is still possible to hope that judges will not consider the autorization of sharing a form of exploitation prohibited under the law, even though two amendments in the parliamentary chambers that proposed to precise it in the text were rejected. It is even more difficult to fight against the contracts imposed by the distribution platforms. For all these reasons, citizen readers must stick to a simple principle: never buy a digital book to which DRM are applied nor an eBook reader whose associated distribution platform does not respecte reader rights and a fair remuneration of authors.

The second questions is of another nature. Stressing the importance of non-market sharing for culture does not mean that one should ignore the economy and fail to develop public policy so it functions well. For non-market sharing, eBooks sales and paper book sales1 to be in synergy, one needs the price of eBooks to be significantly lower that the price of paper books. And of course this is feasible, considering the strong reduction in production and distribution costs. However, when you reach this point, the dividing lines become different. Those authors whom publishers have convinced that digital books will “work like paper books” (in reality they mean: “you will get the same percentage per sale than for paper books”) are terrorized of the lower price, while they could refuse all contracts that do not give them an equivalent income to that of a paper book sale thanks to a higher royalty percentage. Am I mad to say this, when we are sometimes ready to pay to be published, and have, in France, let a law be adopted that replaced the 50% of net income that was the rule in contracts that do not plan for digital exploitation by a zero guarantee of minimum income for authors. What a beautiful law, adopted in the name of authors and bookstores and that is equitably harmful to both.

That’s not all, the second question all leads us to look in a more differentiated manner at the two sides of the possible US competition case, and to better understand the position of the antitrust authority. The position of the publishing majors is simple, they want to be able to keep selling their bestsellers at an arbitrary high price. Apple, who here does not detain the dominant position, has offered them, in exchange for a “modest” 30% commission, to keep this freedom of price setting, together with means to impose it also to other distribution platforms. The DOJ remarked that, through this operation, the price of eBooks is becoming significantly higher. I am not sure that the DJ is mostly preoccupied by reader rights and author income, its reference player being here the consumer. But it fingers an element of truth: Amazon is not an angel, but the publishing majors and Apple are worse.

This post is also available in: French

  1. For texts for which paper books retain – in my opinion durably – an added value. []

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