April 26th, 2012

The Publishing Industry Lives in a Time Warp

I have found proof!

http://money.cnn.com/2012/04/25/technology/amazon-ebook-prices/

""The competitors aren't able to subsidize sales -- they need to make a profit," said Rob Sullivan, a founder of consulting firm Navint Partners. "How can they compete with Amazon taking a loss? If this were steel from a foreign country being sold for less than it's worth, we'd call it predatory pricing and slap a tariff on it.""

I've posted over and over and over again (even I am sick of hearing me on the subject) that Amazon's $9.99 and under pricing rule was (a) not 100% applied even before Agency Pricing (I know, because I paid more than $9.99 for some JAK novels on kindle before Agency Pricing) and (b) not necessarily selling at a loss. Agency pricing raised kindle books above $9.99 on books than were under $9.99 before Agency, when the equivalent pbook was in paperback and discounted below $9.99 (altho to be fair, the publishers have mostly corrected this piece of ridiculousness).

Anyway. That's not even the point I'm trying to make here. We stopped "slapping" tariffs on imports from overseas that were priced at a level domestic competition could not compete with during the _Reagan_ administration. Whatever your politics are on protectionism vs. free trade (and I'm sympathetic to _both_ sides -- either can be stupid and either can be made to work, they have complex tradeoffs in terms of employment, the impact on corporate efficiency and governance, cost to consumers, risks of inducing corruption, etc.), the _reality on the ground_ has been that we _do not_ slap tariffs on cheap imports. Period. End.

(On a side note, the current mechanism for dealing with international trade disputes about things like this consistently sides with The Cheap over The Protection -- just like domestic resolution -- so there's really no reason for people in publishing to exit the time warp. Reality sucks from their perspective.)

Also, predatory pricing is _not_ and I don't think ever has been based purely on the impact on competition. And I've posted about that before, too, with definitions from the FTC, IIRC.

Time Warp! These guys apparently believe the rules are still the rules of the 1970s. No wonder they can't cope with ebooks.