Feeds

Penguin chief: Apple's ebook plan 'dramatically changed' market

Steve Jobs 'certainly a factor' in gouging retailers, court told

The Essential Guide to IT Transformation

The CEO of publishing house Penguin has admitted that Apple's arrival in the ebook market triggered a dramatic shift in how the digital tomes were sold.

David Shanks said, under questioning from the Department of Justice's lawyers in the ongoing Apple ebook price-fixing trial yesterday, that he understood all publishers signing a contract with the fruity firm would be getting a similar deal.

Accepting Cupertino's agency model of book pricing, Shanks testified, would force other retailers to do the same, according to reporters present at the hearing.

The agency model, where publishers set the price of ebooks and retailers take a cut, took over from the well-established wholesale pricing model, where books were sold at cost and retailers set the price for customers, after Apple came on the scene.

Shanks also claimed the “most favoured nation” (MFN) clause in the agency contracts, which stopped publishers from offering better deals to other retailers than they'd given Apple, was "certainly a factor" in trying to get other booksellers, like Amazon, onto the agency model.

"The fact that the parity clause was in the contract more or less made it a given we'd have to be at [sic] agency," he told the southern New York court.

However, when questioned by Apple's lawyers, Shanks said Penguin and the iPad giant didn't agree on every point of the final contract. Shanks claimed he didn't want the MFN clause in the final deal, and he tried to stop Apple putting price caps of $12.99 and $14.99 on books.

"I did not get the deal I wanted, but I wanted to be sold to Apple's customers," he told the judge.

Before the late Apple co-founder Steve Jobs took his multibillion-dollar biz into the ebook world, Amazon maintained its dominant position in the market by selling ebooks at low prices (frequently at or below cost) to encourage sales of Kindle ereaders. Shanks said Penguin believed Amazon was holding prices at artificially low levels with its strategy, and the publisher wanted to see what price customers would actually pay for ebooks.

Shanks heads up one of the “big five” publishers that have already settled with the US government in the price-fixing case, including Hachette, Macmillan, Simon & Schuster and HarperCollins.

The trial continues. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.