A 2010 video has surfaced with Apple co-founder Steve Jobs predicting that e-books would eventually wind up around the same price on competing e-book stores. The video surfaces as the Justice Department pursues its e-book price fixing lawsuit against Apple and two other publishers.
From electronista:
The Justice Department contends that Apple and other publishers conspired to keep e-book prices higher than the lowest possible price. Some publishers previously named in the suit — including Simon & Schuster, Hachette, and HarperCollins — have already settled with the government. Apple, MacMillan, and Penguin deny the charges and allege that it was, in fact, Apple’s chief e-book rival Amazon that was fixing prices and engaging in anticompetitive practices.
The video was shot on January 27,2010 at the launch of the original iPad. It shows Walt Mossberg asking Jobs why someone would pay $14.99 for an iBook when they could get the same e-book from Amazon for $9.99. Jobs replies that “[E-book] prices will be the same … the publishers are actually going to withhold their books from Amazon.”
It’s hard to tell if Jobs was indicating insider knowledge, or whether he was making an educated guess. During that time, publisher Macmillan was in a dispute with Amazon over pricing of their e-books. Macmillan wanting to raise the price of its books from $10 to $15, while Amazon wanted to keep the standard pricing. Three days after the iPad introduction, Amazon pulled Macmillan’s books from the Kindle store, but that decision was soon reversed in the face of competition from the iPad.
The Justice Department contends that a recently released email from Jobs shows that Apple intervened to convince a major publisher that Apple’s pricing model was the way to go. The email, in part, read:
As I see it, [Conspiring Publisher] has the following choices:
1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.
2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.
3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started, there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.
Maybe I’m missing something, but I don’t see any other alternatives. Do you?
The agency pricing model preferred by Jobs was not an Apple invention, but instead has been a mainstay model in the publishing world for some time.
Meanwhile, Seventeen more states have joined the antitrust lawsuit against Apple and several book publishing houses over the pricing of ebooks.
