Bread and circuses.
]]>"[W]hoever is POTUS, around 10% of the US population are convinced that they're a baby-eating lizard-alien in a fleshsuit who is plotting to bring about the downfall of civilization, rather than a middle-aged male politician in a business suit."
That would have been an improvement from noon UCT-5 20 Jan 2001 through noon UCT-5 20 Jan 2009. Or, for that matter, the corresponding span twenty years earlier; in both timespans, the lizard-alien would have done less damage to civilization.
I set forth the above comment as a test for any automated sarcasm detection system, parallel to the perpetual liar who claims to be lying...
]]>There is only the bastard offspring of a three-century-long orgy among thirteen distinct publishing industries. And they really are distinct, from both the reader/market and author/supplier perspective... not to mention government relations, economic characteristics, etc.
That some of these industries now have members that are parts of the same conglomerates doesn't change things all that much. Remember, commercial fiction is a very, very small part of the publishing landscape; by both adjusted revenue and copy sales (not to mention profitability), there's a division at Pearson that could swallow up all of commercial fiction in English worldwide with a small burp at the end of the meal.
And that, by itself, explains an awful lot of the internal inconsistencies in the industry. As a specific example, in the Preceding Thread toward the end there was a comment about DRM-being-from-Hachette, countered with the assertion that it's irrelevant and Tor is such a great counterexample. I snickered at that: In the US market, the most-aggressive initial move to DRM was driven by the college textbook segment of Tor's corporate parent. Tor's position is pushback based on its own industry's characteristics, and at the cost of a lot of internal political capital.*
If you need any further proof that the industries remain distinct, just look at author compensation ranges across them... and ask a friendly academic how much of an advance he/she got for a widely-adopted textbook (that probably outsells all but the top five or six commercial-fiction bestsellers), what his/her royalty rate is, and how often he/she gets an accounting and gets paid! After carefully filing off the serial numbers, one of my clients for an introductory-level university textbook (not the market leader, but adopted at enough US colleges/universities to pretty well guarantee annual sales of 50,000 copies), got an advance of under $2kUS, 4% royalties on net for hardcovers (retailing at well over $150)/15% on net-net for e-books, and annual accounting six months after the end of the accounting period... and that was a comparatively generous offer, even though the author is also required to update the entire book every three years for three editions with no further advance (that is, it's a twelve-year project!). At least this publisher doesn't charge back for the ancillaries (student study guides, instructor guides, multimedia, PowerPoint slides, test banks, etc.). And there are no "page fees."
That is, the problem is that they can't predict that the absence of an advance-order button at Vendor X will lead to y fewer orders, with a substitution elasticity of z% presumed through substitution of vendor by customers seeking that particular product. Without predictability data that management feels comfortable manipulating in its spreadsheet models, management won't pay attention, instead focusing on
SQUIRREL!
other data that does seem to fit management's preconceived notion of what data that it can use to improve short-term financial results looks like.
Part of the problem here is that books are, indeed, nonfungible. This month's Stross is not adequately replaced by this month's Danielle Steel, even in identical packaging shelved right next to each other (alphabetical by author) as "Just Published!" Unfortunately, every single numerical tool available in the modern management toolbox (and especially the modern financial analyst's toolbox) assumes fungibility. And it gets even worse when one actually looks at so-called "just in time" management, which utterly fails to distinguish between completed-product-for-sale availability and component-part-for-further-assembly availability.
Of course, my view is a bit jaundiced by having commanded an aircraft maintenance squadron during the zenith of that management theory. There's a difference between "inadequate stock of raw materials" and "inadequate stock of carefully-machined system-critical parts that cannot be fabricated in the field" when certain dictators go over certain borders and one's unit gets deployed 5000km on three days' notice... Let's just say that my colleagues and I had Some Words with the supply beancounters who were trying to tell us what we really needed/wanted. And if you think a bit, you'll see that it's the same problem as is now occurring between the Big Brazilian River and The French Military-Industrial Conglomerate.
]]>124 The law on what constitutes "predatory pricing" was not "drafted" in any way. It is, instead, a common-law interpretation (even EU law) based upon extending the rulings in particular circumstances to broader propositions that allegedly apply to everyone... and all too often should have been limited to the particular facts involved in the initial suit (many of which weren't even in the record!).
In practice, in antitrust law the first step one must take is to define the relevant market... and that market definition is usually outcome-determinative. Related specifically to the circumstances that led to this thread, is the relevant market: * All books? * All trade books? * All trade fiction books? * All trade category fiction books? * All trade category fiction books released within the last three years and prospectively? * All commercially-published trade catetory fiction books released within the last three years and prospectively? Whether Amazon even comes close to meeting the numeric "predatory pricing" test varies a great deal depending on the market definition... and those are far from the only possibilities. There's a reason that the most-vicious parts of any antitrust fight — and the least-civil arguments in the hallways outside the judge's hearing — are over market definition.
130 YMMV, but my sad experience has been that the cost of policing international same-work accounting chicanery exceeds the purported "benefit" of getting multiple foreign rights payments for the same language. But then, I'm an agressive SOB when advising authors and agents on contract negotiations and usually succeed in helping drive the author's payments up for world rights... and never advise allowing the initial publisher to have non-native-language rights.
134 I'd suggest that there's a simpler, easier-to-police solution than relying upon number of copies sold: "Fails to generate at least £200 in royalties pursuant to § 3(a) of this Agreement in each of two consecutive royalty reporting periods beginning not less than eighteen months after the date of first publication of any edition." (In this instance, § 3(a) is the part of the contract that establishes the print-edition royalty rates.) That simultaneously eliminates the "fire sale" problem and ensures that subrights aren't used to keep the edition in print without a specific cost to the publisher. Of course, a bout of hyperinflation could sabotage this, too... but under those circumstances we'll have much more pressing things to worry about.
Finally, one clarification. When I said "territorial rights are dead; they just don't know it yet" I was referring to the legal relationship, not to publisher/distributor attempts to restrict markets outside of what is legally permissible or enforceable. DVD region restrictions are probably already unlawful under various WIPO provisions, because a consumer or other end-user is allowed to cross borders with legally purchased goods and continue to use them (it's variously called "first sale" or "exhaustion"). Getting the behemoths out there to acknowledge that — particularly since some governments piggyback censorship onto regional restrictions* — is a different issue entirely. Sometimes the real world ignores legal enforceability...
Now, if you've been listening to the nonsense spouted by Mises et al., I can understand the source of your misapprehension... because the Austrian school denies that infrastructure (and, for that matter, intellectual property) is either capital or a capital investment, and therefore is not a proper subject for consideration of "monopoly." That, however, is for another time.
73–75, 93 Territorial rights are dead; they just don't know it yet. And it really doesn't matter if the contracts claim territorial rights divisions that are unenforceable as a matter of law (in the EU, see JCB Servs.; in the US, see Kirtsaeng). They're also a bad idea from a freedom-of-expression point of view... and from the authors-are-rightly-suspicious-of-publisher-accounting point of view.
I strongly suspect that territorial rights will no longer appear in new contracts at all within a decade from now, and that there will be an interesting free-for-all as some publishers in some places just ignore territorial restrictions; others try to get authors in home jurisdictions to agree to limited amendments; and still others tie agreements to publish anything in the future to amending all past contracts (and probably throwing electronic rights in there, too). Think that can't happen? Just ask anyone who tried to publish anything through any New York Times Company periodical about a decade ago...
]]>That said, in this instance I'm afraid that Our Gracious Host has, in his post 8 above, actually made "Sam"'s point. The "synergistic effects of the DRM on the Kindle platform" are a classic type of tying that is probably — but not certainly — unlawful under US antitrust law (and a close call under European and UK antitrust law). The best-litigated example is the 1960s-70s Xerox demand that one must use only Xerox-branded-and-supplied paper, toner, parts, repair people, etc. in Xerox-branded xerography machines, which was eventually shot down. Xerox's "solution" was to stop selling photocopiers: Instead, one was required to lease them, and the terms of the lease constituted a contractual agreement that (for a few years, anyway) took the system beyond the tentative limits of antitrust law. But Xerox's economic/monopoly rent was too high, inviting in the Japanese... meaning that by the mid-1980s, the photocopier one was using at the office was more likely to be a Minolta (or rebranded Minolta) than a Xerox.
In this instance, Amazon is acting very much like Xerox c. 1973: Its "lease terms" (if one actually reads the bloody TOS for the Kindle) restrict use of non-Amazon materials on the Kindle, although practically it's trivially easy to do so. Indeed, those "lease terms" give Amazon the right to pull material off one's Kindle with no notice; although this right has thus far been limited to removing copyright-infringing editions (as bad as that was, given that it meant the readers had paid for nothing), the specter of removing the 9th Edition of the Newspeak Dictionary in favor of the new 11th Edition should be enough to give one pause. We'll leave aside for the moment that Amazon has convinced an awful lot of idiots that its value-diminishing DRM is value-enhancing... just like certain aspects of xerography-machine paper handling in the machines of the late 1960s.
The above is an explanation. It is not an excuse: At a fundamental, theoretical level, I think antitrust law should prohibit both the development of monopoly power in distribution chains and its exercise. At best, however, the law actually only forbids certain varieties of exercise of monopoly power and maybe whispers "don't be mean when you're getting big, unless it's a merger and then we'll pay attention" under most circumstances. The irony that all of this relates to a government-granted monopoly called "copyright" is too much before more caffeine, though.
]]>AUTHOR: No, President Bond. I expect you to explode.
]]>All of which leads to precaffeinated musings on bodypaint fetishists at GCHQ...
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