US DoJ settles with a few publishers. Why do I care?

At the desk, 8:26 a.m.

As you may or may not have been aware of, The US Department of Justice filed suit against Apple Inc and two major publishers Macmillon and Penguin. There's been a lot of chatter on the Internet about this action. Everyone has something to say about how good the suit is for eBooks, the overkill nature of the suit, and as well as an abject denial from the John Sargent the CEO at Macmillon. (I tried to pick the articles that made the most sense. If you read only one link, I think John Sargent's post is worth a glance.) Mike Sanzen did a bang up job in this post explaining who was sued and why, who wasn't sued and what they agreed to, and everyone in between.

What's the bottom line? The Department of Justice sued some people for colluding on pricing which is against the law.

What does it mean? Um... nothing. I mean, a few lawyers will make a lot of money and a few chests brandished with flare. Some companies will have to change the way they do things. And in the end, it will mean... nothing.

It's hard to understand but the current model of publishing hasn't been around that long. Since the time when monks copied the bible from one parchment to another, most of publishing was done by small, family owned businesses where the cycled from reader ---> publisher ---> agent ---> author and back to reader.

Currently, in big recognizably named publishers, the money cycles: reader---> publisher ---> stock holder ---> agent ---> author. Stock holders have very different values than publishers or agents or authors, and certainly different values than readers.

Readers, authors, and agents value the story. Publishers also value the story but also care about making money. It's a two pronged beast that many publishers struggle with.

Stock holders value making money.

If you doubt that shock holders and their stock managers have different values, take the example of Goldman Sachs. They sat on the board of Village Voice Media for 4 years and never knew the company made $22 million dollars of the sale of children for sex on Backpage.com. Goldman Sachs couldn't care less until the press got wind of it. (Here's a pretty good round up of the debacle.) All they wanted to know was that they were making money.

So I repeat Stock holders have very different values than publishers, agents, authors, and readers.

The DoJ suit means exactly this: the publishing model that's existed for the last thirty or so years must change. In it's last gasps of trying to force a business that isn't stock holder friendly into the model, a few publishers got together and decided they could make some extra money.

Why eBooks? There's zero cost to them. All of the writing, editing, creating, designing, re-editing, redesigning, is done for print books anyway. EBooks are basically free money to be passed from publisher to share holder. The higher the stock prices, the happier the share holder and the more money the C-class employees make.

Did they collude? Of course they did.

What does it mean for us? Nothing.

For small publishers like Cook Street Publishing, we continue to support the time honored model of where the reader comes first. They pass money to the company who gives it to the author who supports the reader. This is why small publishers are flourishing in the US and the big publishers are selling books by people named Snooki.

We can expect the big publishers to do all kinds of shenanigans as they fight tooth and nail to keep their failing business model afloat.

In the meantime, I'm going going to keep writing stories for readers. I'm going to keep engaging in the publishing company I co-own. (Our goal this year is to get the legal crap done to shift from a partnership to a co-op.) I'm going to support every self publisher and small publishing company I know. It's my belief that readers will drift to the companies that care about them. Look at Amazon. What's the Amazon model? Give people what they want and give them great customer service. If they can create an empire out of that value, why should we be able to create awesome books?

I believe in the sacred bond between reader-publisher-author. Do you?

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