Moaning and Groaning: Publishers’ supporters get more hard line after being shot down by the DOJ

So I’m catching up on my reading of industry news and I noticed that, since the DOJ pretty much laughed off the anti-settlement brigade’s rhetoric, the tone in some circles has gotten even sharper, more filled with doomsaying than it was before, and it was already pretty severe. Personally, I found a lot to like about the DOJ’s response to comments, which is something I very rarely say about any government agency. I especially appreciate that they weren’t swayed by the 10 to 1 ratio against that the traditional publishing backers’ letter writing campaigns generated.

I still believe there was a fatal flaw in their logic. In encouraging people to parrot the anti-Amazon party line, it created a raft of letters that failed to address the principle matter of law in the case, worse yet, it may have vindicated it. Very few, if any, of the letters substantively refuted the claims of collusion, instead using unsubstantiated claims of Amazon’s predatory pricing as justification for the publishers’ actions. In this way, many of the comments, while attempting to defend the publishers, essentially admitted collusion took place. It’s like saying, “Yes, your honor, we did it, but we’ve got a really good excuse.”

It doesn’t surprise me in the least that this kind of approach carried no water with a group of prosecutors. If anything, the arrogance of it seems to have further emboldened and entrenched the DOJ in its beliefs. This could end up being extraordinarily bad news for Penguin, MacMillan and Apple if they actually force an annoyed DOJ into court.

But that’s an issue for a later date if the holdouts don’t come to their senses and settle before they end up spending absurd amounts of money defending a pricing scheme likely to be obsolete before the first witness is ever called.

I’ve got two articles I read this week that, I think, illustrates both the attitude of superiority and the over-the-top, end of days hyperbole that’s making the rounds now that the industry seems to be realizing Uncle Sam isn’t going to do their bidding, no matter how many campaign contributions they make to Chuck Schumer. It’s a sad commentary on the state of things these days when buying a congressman is an easier accomplishment than competing in the market.

I’ve taken five points from each of these two articles to discuss. The first is a particularly single-minded post by Dennis Johnson, co-founder of the publisher Melville House, a staunch traditionalist.

Before I begin, let me say that I find it odd that such a virulent supporter of publishers founded a company named after Herman Melville, a man who largely had a tenuous if not outright bad relationship with publishers. Most of his books had to be published in London initially because American publishers wouldn’t touch them, and even then, they were never able to generate significant sales despite the fact he wrote some of the greatest works in the English language.  Rather infamously, Melville was paid a grand total of less than $600 for his masterpiece Moby Dick. I’m sure if he were to rise from the grave today, Melville would have more than a few choice words for publishers, particularly considering his actually burnt the unsold copies of an epic poem he wrote after he couldn’t pay for them. Comforting to see some things never change, like publishers’ contempt for writers.

1. “At the start of agency, for example, Amazon controlled 90 percent of ebook sales. There’s nothing “highly speculative” about calling that a monopoly.”

Except for the fact that Amazon’s large share came about because they took a then-under utilized ebook market and drug it into the mainstream essentially by themselves. No major publishers paid much heed to it at the time, very few competitors showed any interest in jumping in before Amazon charted a course, and certainly none on their scale. Once Amazon started making real money, though, that 90% share dropped significantly, just as you’d expect a trendsetter would when a previously empty playing field started filling up. It wasn’t like Amazon entered a thriving ebook market and swiped that giant share of business from others. They essentially created the market when almost no one else had the interest, desire or the balls to do it. He’s right, though, partly. It’s not “highly speculative” to call Amazon a monopoly in that instance, it’s outright bullshit to do so.

2. “The Sherman Antitrust Act, and its descendent the Robinson-Patman Act, clearly define loss-leader under-pricing as a predatory tactic rather obviously intended to “drive out competition and obtain monopoly pricing power.”

So when does the DOJ actions start up against every retail business in this country? Loss Leader pricing is so commonplace we barely even notice it any more. Its use is far from being “rather obviously” about driving out competition, either, far more commonly used on a day to day basis virtually everywhere things are sold, as a means of bringing customers into your store.

On the other hand, what the publishers did with the agency scheme was retail price maintenance, which up until 2007, was illegal in essentially all its forms. A Supreme Court decision (which overturned damn near a century of precedent, by the way) granted a limited allowance for the behavior under the “rule of reason” which Apple and the publishers flaunted by colluding pretty much in public and gloating about how their plans were going to screw Amazon, inhibit the ebook market and raise prices on ebooks. The publishers are only in legal trouble today because of their egos, stupidity and total lack of discretion. That and, unlike Amazon, they actually broke the law.

3. “The DOJ cited arguments from David Gaughran, writing on behalf of 186 self-published authors who thanked Amazon for ‘creating, for the first time, real competition in publishing by charting a viable path for self-published books. But when was it, exactly, that publishers prevented authors from self-publishing?

Is he kidding? Certainly, anyone with the money could publish a book, but getting that in book stores or retail outlets dominated by traditional publishing was an entirely different story. Publishers’ entire business model was one of dominating the channels of distribution. What good was publishing a book if you were essentially locked out of the principle sales channels?

Preventing writers from having any access to the market was their stock in trade, creating a ready supply of material they could pay as little as possible for, which is why writers get such a low portion of revenues today when they are principally responsible for the product. And, really, anyone who thinks there was anything close to a viable path to self publish pre-Amazon is either dangerously ignorant of reality or purposely being disingenuous.

4. “The process of public involvement was, apparently, meaningless. But there are better things to remember right now. For one, take this for what it is: The DOJ has found its own case sound. The good guys, meanwhile, have yet to have their day in court.”

So the DOJ was supposed to take a vote and ignore the law because a large number of traditional publishing’s disciples said so? The truest thing in the DOJ’s response was that the overwhelming majority of anti-settlement comments came from people and businesses profiting directly from the price fixing scheme. Like I said, I’m actually impressed they saw through it.

In truth, I think the public involvement stage was very useful. It illustrated the biases of those supporting the publishers who, despite their numbers, produced no compelling arguments for a lessening of terms. It also showed that the truly independent voices who, not coincidentally, are finding success without the need to break the law, were heard even though they could have been swamped by traditional publishing’s comment generating machine. If anything, unlike many other areas of life these days, this looks like the powerful corporations flaunting the law will be held to task while consumers, innovators and legitimate competitors in the market will win the day.

5. “The ludicrous charges, the fact of such paltry and pitiful support for them, the wide variety of opponents — the entire industry and then some — roused to speak out — all provide reason for hope.”

Yeah, reason to hope you guys hurry up and go bankrupt. Seriously? Ludicrous charges? Pitiful and paltry support? No and no. The charges look pretty damn sound to me. And evidently, those of us who choose to disagree don’t matter. Hell, we’re not even in the industry, apparently, despite selling books professionally. For money. To actual readers. See, it’s not that public input didn’t matter, it’s that public input he disagreed with didn’t matter, and it certainly shouldn’t have mattered enough to beat back their superior numbers and unsubstantiated inflamatory rhetoric. How dare the DOJ side with the law and actually aggreived parties who have paid tens of millions more for ebooks than would have been possible without collusion! They sent 800 carbon copy, Amazon-is-evil letters, didn’t the DOJ get the memo? Won’t somebody please think about the culture?

Shortly after reading that piece, I read this one by John Barber of the Globe and Mail. The hits just keep on coming in this one, including cameos by everbody’s favorite bitchy traditional writers, Ewan Morrison and Scott Turow, proving that even the Atlantic Ocean can’t keep arrogance and stupidity apart.

1. “Authors are losing income as sales shift to heavily discounted, royalty-poor and easily pirated ebooks. Journalists are suffering pay cuts and job losses as advertising revenue withers. Floods of amateurs willing to work for nothing are chasing freelance writers out of the trade. And all are scrambling to salvage their livelihoods as the revolutionary doctrine of “free culture” obliterates old definitions of copyright.”

Being as he made several points here, I’ll address each in order. First, ebooks are only royalty-poor because publishers want them that way. And, to be fair, print books are pretty damn royalty poor in most instances, too. Next, do you know who’s not seeing pay cuts and job losses as advertising flees newspapers? The CEOs, who are “suffering” with giant bonuses and golden parachutes for all those job losses they’ve instituted while simultaneously playing the fiddle on any kind of digital transition as their industry segment burns to the ground.

Third, as conglomerates bought up any and every publication they could find during the acquisition rush years ago, many publishers began getting tight with freelance budgets. Even at the height of profitability before the bottom fell out, prices paid to freelancers were stagnant or negative. Once the advertising revenue started to fall, they used it as a convenient excuse to put the screws to writers even more than usual. The flood of free content he refers to was largely spurred on by publishers looking for ways to spend as little as humanly possible on content, quality be damned. The issue isn’t that there’s work out there available for free, it’s that publishers refuse to pay even modest wages for quality writing despite the fact that content is the only reason they have the ability to attract any advertising at all.

And, finally, who’s perverted the concept of copyright more, the “free culture” people, as he calls them, who advocate sharing and the rights of consumers or the media companies, who lobby for laws like DMCA and SOPA, and push through things like the Mickey Mouse rule that now has copyright extended to life of the creator plus 70 years?

The extensions and increasingly stringent punishments for even minor infringement has created an atmosphere where it makes a lot of sense to argue that copyright needs to be looked at anew. The parts of copyright law that support derivative works and allow creators to build off of the progress of those before, fair use and the first sale doctrine, and the public domain and furtherance of culture have all been imperiled by the steady rights grabs of media companies who have been engaging in a systematic effort at maintaining copyright in perpetuity for decades now. If you’re going to cry about copyright being broken, don’t do so while advocating for those who actually broke it.

2. “(According to best-selling UK author Ewan Morrison) The result will be the destruction of vital institutions that have supported “the highest achievements in culture in the past 60 years.” In short, he predicts, “There will be no more professional writers in the future.”

I’m sure when Morrison uses the term “professional writers”, he’s referring to people like himself. We can only hope for a future with as few of those kinds of “professionals” as possible. It’s not his writing talents I have issue with, I’ve never actually read any of his work, it’s that he has some ridiculously backwards, elitist ideas along with a generous helping of contempt for anyone who circumvents the traditional getekeepers.

Morrison has said some pretty crazy stuff, for instance, this piece in the Guardian where he argues against social media but makes some larger points about traditional and self publishing. Be sure to read the comments because he has numerous additional points there, including a rather entertaining discussion with Joe Konrath. My favorite part is when he excoriates Konrath for daring to encourage others to eschew traditional and embark in self publishing by saying, “It is unfair and cruel to propagate a model for others which can only ever work for the few.” After I stopped laughing and wiped the tears from my eyes, the full audaciousness of that comment really sunk in. After all, Konrath has a long, long way to go to rate with traditional publishers in propagating models that only work for the few. The sad part is that it seems Morrison doesn’t even get the rich, creamy irony.

These statements are what I’m talking about when I say the rhetoric has gotten more severe. The highest institutions of culture will crumble and working writers will totally vanish. Talk about self-important! Publishers largely gave up their mantle of cultural protectors, if they ever had one in the first place, when they became little more than profit engines for larger conglomerates. It’s pretty obvious, too, yet Morrison seems to believe that writers should willingly accept lousy royalties so these publishers can keep exploiting them to the benefit of their parent company’s bottom line. Being self published and actually keeping a fair share of what your work earns is selfish, according to Morrison. Of course, he just might see it that way because more and more writers earning outside of traditional may jeopardize his next advance. Besides, if publishers weren’t portrayed as purveyors of culture, then there’d be no moral argument for their survival, and that would make for even more specious rants, if that’s possible.

3. “(Author Scott Turow) has drawn heavy criticism from digital partisans for defending the diminishing rights of “legacy publishers” currently under U.S. Justice Department investigation for allegedly fixing ebook prices.”

Diminishing rights? I wasn’t aware publishers had the right to colluded and fix prices. Didn’t know they had the right to rip off authors through shady corporate finanglings like Harlequin just got sued for. Wasn’t aware they had the right to snatch digital rights from contracts signed 30 years before anyone had ever heard of an ebook. Most of all, I didn’t know they had the right to operate largely free of genuine competition.

If publishers are diminishing, it’s likely for two reasons; writers have other choices now and are sick of being treated like chattel and paid slightly worse; and they’re clinging to a business model that is servicing a shrinking percentage of their customer base. But that’s the common denominator in the anti-Amazon camp, the stark refusal to admit publisher’s culpability for their own problems because it’s so much easier to make excuses for your own failings when you can pretend to be a victim.

4. “Nor is self-publishing profitable for the majority of authors, according to a recent British survey. It found that half of the writers – many no doubt lured by well-publicized tales of spectacular success achieved by a handful of fellow novices – made less than $500 a year for their efforts.”

No one was ever lured into traditional publishing by the tales of success of other writers, right? I’m sure that’s never happened. And let me just reiterate an earlier point: Herman Melville made less than $600 in total on Moby Dick. Using dollar figures in this way, especially with no context in comparison with traditionally published writers, makes for compelling soundbites while providing very little actual insight. Besides, there are a whole lot of self published writers. That survey means half of them made more than $500 a year. I’d be willing to bet that percentage isn’t far removed from traditional but I’m sure we’ll never hear about it.

5. “The livelihoods of serious writers will continue to depend directly on the health of traditional publishers, “the venture capitalists of the intellectual world,” according to Turow.”

So only writers with traditional contracts are serious? The rest of us are just dicking around out here then, huh? Writers like Turow and Morrison may have their livelihoods depend on the health of traditional publishers, but there seems to be a large and growing infrastructure that’s circumventing their control. That means the health of said publishers isn’t really a major concern in that segment. In fact, it may be just the opposite.

With fewer market obstructions from the traditional end, and less product from that side, it could well increase opportunities for success amongst those who aren’t dependant on them. But that doesn’t matter because those people won’t be serious, of course. Everyone knows you can’t be a serious writer unless you give up most of the proceeds, all creative control and any conceivable rights to your work until your great, great grandchildren are old and gray. It’s just crazy talk to say otherwise.

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