House Of The Fatted Penguin
Ed here: Thanks to Kris Rusch's fantastic blog I linked to this and read it. This is by Tom Dupree.When you're finished go to Kris's commentary on it. http://kriswrites.com/2013/08/14/the-business-rusch-the-biggest-news-of-the-summer/
Today’s big book news is Apple’s loss in the Department of Justice antitrust action alleging that it colluded with five major trade book publishers to fix prices of e-books. (The publishers themselves settled out of court; Random House, which did not adopt Apple’s “agency model” of pricing for another year, was not named.) We now await the financial penalty and the inevitable appeals. But for my money, that’s not the biggest book news of the month. Neither is Barnes & Noble’s planned abdication of its e-book reader Nook, and the related resignation of its CEO, as part of the slow, sad decline of a once mighty, even arrogant, behemoth that dictated how you get books to a mass market – if B&N didn’t like a cover, you frickinchanged it – and rented out its front-of-store promotional space like the commodity this print-payola became. These are titanic events which will affect most of you who like to read books for fun, and would lead the news in any other month. But not in July 2013. Not the month when Penguin Random House was born.
As of July 1, in the wink of an eye, there were no longer a Big Six of trade publishing, only a Big Five. Later this year, we may well hear of another proposed consolidation; my old compadres at News Corp‘s HarperCollins (who sniffed around Penguin as well, but too late) are rumored to be holding powwows with CBS’s Simon & Schuster. Hachette (used to be Warner) and Macmillan are the only other Bigs, and if a Harper/S&S merger took place, they’d probably have no choice but to get married themselves.
First, leverage. The power in the book business is shifting in favor of one mega-retailer, and this shift is happening at electronic speed, a pace to which traditional publishers are unaccustomed. That ogre is Amazon, so huge that it could afford to establish its Kindle as the dominant e-reading platform by pricing bestsellers at a loss. Take pricing power away from publishers and they get mad – and DoJ asserts that five of them got even. I’ve never understood why the Big Six didn’t just say OK, these e-books are great and all, but they’re cannibalizing our hardcover sales, so tell you what: no e-editions on new titles for the six months after laydown. After all, movie marketers “window” the crap out of their new releases: premieres in theaters, pay-per-view, home video, pay cable, streaming, etc., are all staggered to squeeze out every possible dime. But the e-market was jump-started instead by “loss-leader” pricing (which even bled over into a ludicrous price war on physical books between Amazon and Wal-Mart in late 2009, when for one brief shining moment you could buy Stephen King’s thousand-page marathon UNDER THE DOME in hardcover for $9.00), after years of half-hearted, impotent, premium-priced effort within the industry.
for the rest go here:http://tomdup.wordpress.com/2013/07/11/house-of-the-fatted-penguin/