Judge Signs Order: the New Ebook Publishing Landscape

shutterstock_120329107Judge Denise Cote has altered the landscape of ebook retail in the U.S. for the next five years.
Judge Cote signed an order last week spelling out Apple’s punishment for ebook price-fixing. For five years, Apple will not be allowed to enter into any “most favored-nation” clauses with any publisher. For two years and longer, Apple will also not be allowed to sign any agency pricing agreements with the five largest U.S. publishers. The company will also have to succumb to two years of monitoring to guarantee that it doesn’t repeat its errors.
The good news for Apple is that the Judge stopped short of regulating what Apple does within apps, which means that it can still charge 30% commission for in-app purchases and that it doesn’t need to allow Amazon and others to link to rival stores within apps.
Overall, this is what everyone expected to see – everyone except publishers like Hachette and HarperCollins, which, when they settled with the U.S. Department of Justice last year, thought they’d be able to negotiate whatever kinds of contracts they wanted two years after signing.
Those signed settlements turned out to be just pieces of paper. In the shootout between the DOJ and Apple, the publishers were caught in the crossfire.

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The rest of the day’s top news:

DOJ Approves (DBW)
Despite not getting everything it wanted, the Department of Justice came out with a letter of support for Judge Cote’s decision.
Spotify for Ebooks vs. Netflix for Ebooks (DBW)
Read this informative primer on the difference between these two subscription services and why Netflix is actually a better business model for both publishers and investors.
Barnes & Noble Postpones Expansion (Pub Lunch)
Barnes & Noble was to expand into 10 countries by the end of 2013. It’s delaying that plan another four months and could, as a result, not be entitled to some of the money Microsoft promised it for that purpose in its capitalization agreement from last year.
A Case for HarperCollins and News Corp (Seeking Alpha)
According to one analyst, the new News Corp, which is comprised of Dow Jones, HarperCollins and other written-word-media businesses, is worth a lot more than Wall Street is currently giving it credit for. Also, according to the analyst, ebooks are far more profitable for the company than hardcover books – given agency pricing, which of course no longer applies in a little place we like to call reality.
Will Publishers Try Amazon Matchbook? (PW)
So far, the answer seems to be a qualified “no” or something like “not yet.” It’s unclear if they don’t want to try bundling at all or with Amazon.
DRM-Stripping Lego Robot (Boing Boing)
A post by notorious anti-digital rights management advocate Cory Doctorow claims that this robot — which photographs Kindle pages and then turns those photos into text files, giving the users a DRM-free text file of an ebook – is somehow legal.
New Kids App Incentivizes Reading With Video Games (The Digital Reader)
Pocketbook’s KidRead app will allow parents to control tablet behavior to the point where they can set up a system where kids can earn gaming time by spending time reading. Call it the Hunger Games for Angry Birds program.
Android Reading App Reaches Milestone (The Digital Reader)
The popular Aldiko reading app for Android (No. 2 behind Kindle) has hit 15 million downloads.
Children’s Book From Unexpected Source (USA Today)
Love him or hate him, you probably don’t expect to see his name on the cover of a children’s book: Rush Limbaugh. Yet, reportedly, frequent the right bookstores and you just might.


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