Wednesday, June 02, 2010

Texas AG Probes Publishing Agency Model

Publishers Marketplace had an interesting tidbit on Monday:
...the anti-trust division of the Texas Attorney General's office has been engaged in its own preliminary questioning ... that appears to focus on pricing practices for ebooks and Apple's entrance into the market in particular.
I tripped my way over to Wikipedia to find an entry on price fixing, which said:
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand. The group of market makers involved in price fixing is sometimes referred to as a cartel.

Price fixing may be intended to push the price of a product as high as possible, leading to profits for all sellers, but it may also have the goal to fix, peg, discount, or stabilize prices. The defining characteristic of price fixing is any agreement regarding price, whether expressed or implied.

Price fixing requires a conspiracy between two or more sellers or buyers; the purpose is to coordinate pricing for mutual benefit of the traders.
I went back through the archives of Publishers Marketplace looking for the earliest mention of what has come to be called the "agency model." I found it on January 19:
The WSJ reported lasted night that HarperCollins is negotiating terms with Apple for making ebooks available on the company's forthcoming new device, along with unnamed other publishers ...

Apple, whose representatives are in New York for meetings this week, is acknowledged by participants as currently negotiating with nearly all (and most likely all) of the six largest trade publishers, though those negotiations were supposed to be confidential ...

Certain very important themes are identifiable, however. The key for most publishers is ... the opportunity to change the basic selling terms of ebooks with at least one major trading partner in a way that lets publishers take back control of pricing and reassert their vision of the value of an electronic version of a book.
So, let's see what we have here.

Multiple participants on the same side of the market ... Five of the six biggest publishers ... Check

Working to maintain market conditions so that a price is maintained at a given level ... Check

It may also have the goal to fix ... or stabilize prices ... Check

The defining characteristic of price fixing is any agreement regarding price ... Check

Have I mentioned that I live in Texas? I have? Good.

Here in Texas, we have a saying: If it walks like a duck, looks like a duck and quacks like a duck ... it's a duck.

Stay tuned ... And go here to subscribe to Publisher Marketplace.

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