Ex-WSJ writer: Apple's 30% revenue sharing e-book company mannequin is just not a conspiracy
As Apple prepares to go to trial to battle the US Division of Justice’s claims that the Cupertino firm conspired to repair e-book costs with publishers, former writer of the Wall Road Journal L. Gordon Crovitz has an fascinating oped in at present’s paper which he says that Apple’s 30% revenue sharing “company mannequin” with e book publishers doesn’t quantity to the worth fixing conspiracy that the DOJ accuses the corporate of. It’s Crovitz’s rivalry (as I assume Apple may also argue the identical in courtroom) that the federal government’s assertion that the company mannequin is “inherently flawed” is fake. The company mannequin means publishers, somewhat than resellers, set the costs of ebooks.
Matter of reality, Crovitz says that Apple’s company mannequin just isn’t solely good for Apple, however good for shoppers and publishers as nicely, insisting that as an alternative of conspiring to repair costs, they conspired to repair a damaged e book system during which Amazon managed virtually every little thing:
Publishers conspired to restore an anticompetitive enterprise mannequin. They thought it made no sense for Amazon’s Kindle to have a ninety% market share and a single loss-chief worth of $9.ninety five for shoppers. They have been proper. Over the previous couple of years, because of the company mannequin, the Kindle’s market share has fallen to 60% because of competitors from iPads and Barnes & Noble Nooks, and there’s extra variation in shopper costs, sometimes starting from $5.ninety five to $14.ninety five.
Of famous is when Crovitz relates how he met with Apple’s Eddy Cue to debate the phrases of income sharing for revealed works. Anticipating a greater deal than the 30% take Apple generates from apps Crovitz was a bit stunned when Cue informed him, “‘I do not assume you perceive. We will not deal with newspapers or magazines any in a different way than we deal with FarmVille.” As Crovitz states: “It was a sobering reminder that conventional media manufacturers haven’t any most popular place within the new digital world.”
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