As you may know, the American Department of Justice (DOJ) has been considering taking legal action against the big 6 of the publishing world for some time for what they consider to be illegal collusion to fix the retail price of ebooks, the so called Agency Model.

The way that paper books are sold to book sellers is based on a system in which publishers set a wholesale price, normally about half the cover price, and then the retailer can decide how much they actually sell the book for.  In the early days of ebooks, this system was also used for ebooks.   But this changed about the time the iPad came along, at which point at the urging of Steve Jobs of Apple, the main publishers and Apple adopted what has become known as the Agency Model

What is the Agency Model?

The Agency Model is one in which the publishers sell the ebook to a retailer and set the retail price of the ebook, and base this on about a 30% mark up for the retailer.  The point at contention is that the publishers insist that the retailer sells the ebook at the price they (the publishers) set.  This is the heart of the legal case against them, as this is price fixing between producers of a commodity, and as such is illegal as it is seen as removing any sort of competition between publishers.

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Rich Adin, in his always intriguing and diverse blog – An American editor – has posted an interesting article about the infamous Agency Pricing Agreement for selling ebooks.

This structure, which is currently the subject of legal inspection in the USA, Europe and the UK has caused a real stir over the last year, as it is seen as a form of price fixing, aimed chiefly at preventing Amazon from taking over the entire world of ebooks, and in passing, to give Apple a fighting chance to break into the market as a result of the launch of the iPad.

From the point of view of the consumer, it has had the effect of frequently pushing the price of ebooks up to levels higher than many paper books, which, not surprisingly has caused a lot of anger and resentment.

In this post, Rich gives a rather more nuanced view of this system, and it is because of this broader view of it all that I felt it might be of interest to you to read – assuming you have not already seen it on his blog, of course.

So, the word is with Rich now….  Read on.

eBooks: Is Agency Pricing Good or Bad?

Recently, there has been a lot of focus on the “conspiracy” between 5 major publishers and Apple regarding agency pricing and whether these 6 entities have violated antitrust law. The focus is not on whether agency pricing is good or bad, but whether the parties colluded. That question I’ll leave for the US Department of Justice.

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As you probably know, Apple and 5 major publishing houses are facing legal action in both the USA and the European Union for allegedly setting up a price fixing ring for ebooks – which is illegal in both areas, and if proven, the damages could even hurt Apple very badly.

What is happening is that the Department of Justice in the USA and the European Anti-Trust Commission have decided after months of vacillation to properly examine the so called “Agency Model” of ebook pricing, which basically is an agreement that Apple and the 5 biggest publishers in the world – Harper Collins, Hachette Livre, Simon & Schuster, Penguin and Macmillan – dreamed up between them that sets the retail price for all ebooks rather than leaving the retail price up to the seller.

In both the USA and Europe such agreements between competing companies is completely illegal, and seen as anti-competitive and criminal.

It is being claimed that this whole sorry mess originated with Steve Jobs as part of his strategy for selling the iPad, and was aimed specifically at Amazon, who to all intents and purposes control the world market in ebooks, and were thus seen as the company to beat into the ground in order to ensure that iBooks (as with iTunes) ultimately became the world leader for selling ebooks.

Apparently at a number of meetings with the leaders of the 5 publishing houses, he managed to convince them that their future was safer with Apple than with Amazon, as quotes from Steve Jobs to his biographer Walter Isaacson would indicate

“We told the publishers … you set the price, and we get our 30 per cent, and yes, the customer pays a little more, but that’s what you want anyway,” Jobs reportedly said.

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As you will probably know, the animated short “The Fantastic Flying Books of Mr. Morris Lessmore” won an Oscar as the best animated short film, but what you may not know is that there has been an iPad app for it since late last year.

This allegorical tale about the place of books in our world and culture which you can see below, is a superb small film, likable and understandable characters and a story line which very quickly becomes apparent.

It is described as follows:

Following a hurricane which destroys his town Morris Lessmore is whisked away to a colourful old house full of books which come alive and interact with him spreading happiness in the community. He remains their custodian for years until it is time for him to pass on and another guardian of the books take over from him.

There is a sort of self animated book that seems to be his guide in the world he finds himself in… It animates itself by flicking through its pages, a rather nice idea, which works visually very well.

So, here is the film itself, which to my surprise is freely available on Youtube.

Fun, isnt it?

Now for the App itself.

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Melbourne based company Studio Proper have come up with an intriguing collection of accessories for the iPad2 all based on their protective case system – The Wallee.

The basic component of this range of useful accessories is the Wallee iPad case, which is a solid, sleek looking bit of gear, and will assuredly protect your iPad from the knocks and bangs of daily life pretty well, but what makes this case special, is that it is the heart of a whole range of more or less useful other accessories, or as they put it in their press releases:

NEW for iPad 2: The Wallee supports Apple’s Smart Cover & is both thinner and lighter than Wallee 1.

The Wallee case for iPad 2 is a seamless, sleek + precision moulded protective case that is compatible with a growing range of modular accessories, each of which connect to the case with a simple turn and click.

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As all ereader users know, any sort of page flipping beyond the simple one page forward, one page backwards, is a real pain on an ereader and at the best, very clumsy.  In fact it is the major area in which paper books are still way ahead of ebooks from the user friendly point of view.

But this may be about to change.

A bunch of guys at the Korea Advanced Institute of Science and Technology (KAIST) have come up with a very complete new system to allow us to  move around in our ebooks with the same ease we can do this  with our paper books.  They have given it the far from romantic name of Smart E-book System – but I suppose to expect them to come up with a riveting name for their splendid invention is perhaps unreasonable, they are academics after all – A group not known for their zingey use of words.

Wiggle your fingers and it all happens:

Basically what this system will offer us is the possibility to navigate through an ebook in a variety of ways, merely by using various single and multiple finger swipes, much as we already do with all touch screen devices.  But these guys have taken it a step further, and made a number of the “swipes” start from the bezel around the screen… Not sure how they have achieve this with software rather than hardware, but achieve it they have, as you will see in the video they have made to show off this system to the world.

Currently it only exists in their labs, and the iPads they have used to test the system.  I gather they hope to sell it to Apple, or at least get it included in the Apple accepted Apps, so people can enjoy this useful system on their iPads.  But in fact I gather it could work on just about any platform, from Smart Phones through PCs to tables and iPads..

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