Much ado about Apple

Is the US Department of Justice making a fuss over nothing?

The perilous future of publishers was highlighted yet again by yesterday’s news that the US Department of Justice is suing Apple, Macmillan and Penguin for conspiring to fix the price of e-books.

The fuss centres on the move these companies have made on the agency model of selling, (where the publishers set the price of the e-book and the retailers take a 30 per cent cut); retailers, unsurprisingly, favour a model where they buy the e-book from the publisher at wholesale price and sell it for however much they want.

Such a model, it’s said, increases healthy competition between retailers which in turn leads to variety and greater customer choice. And according to papers filed in New York’s Southern District Court on Wednesday morning, the collusion of these publishing giants with the world’s most valuable firm (the lawsuit was launched the day after Apple’s worth surpassed $600bn), is a deeply unfair attempt to crush the freedom – and therefore prosperity – of e-book retailers who, after all, need to carve out a living for themselves too.

But this moral and legal outrage needs to be tempered a little. Two things to bear in mind: first, where is this diversity and healthy retail competition that the agency model – which is not illegal, incidentally – supposedly threatens? In every direction you turn, Amazon lurks, offering consumers e-books and books at prices that most other retailers – including high street giants such as Waterstone’s – cannot compete with. Indeed, an adoption of the agency model for e-books is essentially a digital return to the net book agreement, which publishers relinquished in 1997. Waterstone’s, supermarkets and Amazon must have been rubbing their hands with glee when that happened, as the three of them they went on to dominate the market, squashing smaller outlets in the process. What variety!

Second, though the agency model is legal, price fixing obviously is not. No doubt there will be a fair amount of legal hair-splitting over what exactly the publishing CEOs have been up to, but at the moment the circumstantial evidence is pretty thin on the ground.

The PDF document released by the DOJ reports that in late 2008, the Penguin Group and Macmillan CEOs, along with a few other heavyweights, had dinner together and ‘business matters’ were discussed. You’re kidding, right? They were at it again in January 2009, this time discussing the future of e-books and Amazon’s role in that future.

With their future looking increasingly treacherous, it’s no wonder publishing bosses have a lot to talk about at the moment. The agency model might be their only chance to survive in the cut throat world of e-book and book sales

Mark Nayler is a senior researcher at Spear's magazine.

Raising e-book prices: justified? Getty images.

Mark Nayler is a senior researcher at Spear's magazine.

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New Digital Editor: Serena Kutchinsky

The New Statesman appoints Serena Kutchinsky as Digital Editor.

Serena Kutchinsky is to join the New Statesman as digital editor in September. She will lead the expansion of the New Statesman across a variety of digital platforms.

Serena has over a decade of experience working in digital media and is currently the digital editor of Newsweek Europe. Since she joined the title, traffic to the website has increased by almost 250 per cent. Previously, Serena was the digital editor of Prospect magazine and also the assistant digital editor of the Sunday Times - part of the team which launched the Sunday Times website and tablet editions.

Jason Cowley, New Statesman editor, said: “Serena joins us at a great time for the New Statesman, and, building on the excellent work of recent years, she has just the skills and experience we need to help lead the next stage of our expansion as a print-digital hybrid.”

Serena Kutchinsky said: “I am delighted to be joining the New Statesman team and to have the opportunity to drive forward its digital strategy. The website is already established as the home of free-thinking journalism online in the UK and I look forward to leading our expansion and growing the global readership of this historic title.

In June, the New Statesman website recorded record traffic figures when more than four million unique users read more than 27 million pages. The circulation of the weekly magazine is growing steadily and now stands at 33,400, the highest it has been since the early 1980s.