Friday, 13 April 2012 09:14

Hey Hollywood, you might want to take a look at this…

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17In the last few days we have seen a couple of things that just might break the old business model of the MPAA and RIAA. The indicators are things like the decision that code is not physical property was pushed down by the 2d appeals court only a matter of days ago along with an increase in lobby presence by some media content providers (not the content owners) while the final piece of the puzzle is actually the US DOJ suite against Apple and a handful of book publishers for price fixing.

In the suit the DOJ (Department of Justice) alleges that Apple and a group of publishers worked to artificially raise prices of e-books. If you have read Apple’s terms and conditions for publishers then it is not hard to see why they are involved (despite what some think). If you use Apple’s iBooks application to push your wares then you cannot sell that product for a lower price on another service. Apple also reserves the right to set the price level for books and requires a 30% cut of the revenue per book. Although many state that Apple allowed the publishers to set their own prices there were limits that publishers could not go below when selling in the iTunes store.

The issue, as many see it, (meaning the publishers) is that the sale of digital books cuts heavily in to the sale of physical books. To combat this, the publishers want to maintain control of the sales price and keep them equal to or more than buying a physical copy (does this sound familiar?). According to the Anti-Trust suit Apple colluded with publishers to fix the prices artificially high while making sure they could get the best prices for users of iBooks app.

Now despite the fact that an iPad allows you to use the Kindle and Nook apps from Amazon and Barnes & Nobel it is still anti-competitive for Apple to secure the right to always have the lowest price on their app. Apple might find themselves on the losing end of this after all considering the way the LCD panel price fixing suit turned out (we also find it funny that Apple claims they were trying to break Amazon’s “monopoly”).

Now, we are not going to delve into the DOJ complaint much further than we have, but this one issue will have repercussions in the continuing battle with the MPAA and RIAA in that is shows how the existing business model of the content owners maintaining control of the pricing is anti-consumer. If this suit is successful it does set precedent and might be used to prove how RIAA and the MPAA are cartels and in violation of existing anti-trust laws. Of course while we are at it we might as well wish to win the lottery as we figure that is more likely to happen…

Still we do hope that the DOJ wins this one and at least the control that book publishers have will be broken and those prices can come down even if we cannot break the grip of the motion picture or recording industry,

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Read 2485 times Last modified on Friday, 13 April 2012 09:24

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