Why Publishers Only Have Themselves to Blame for Justice Dept. Mess

Guest Blog: Apple and Amazon have simply taken advantage of a situation in which publishers have completely dropped the ball

All the hullabaloo about whether the Justice Dept. was justified in suing Apple and five publishers skirts the real issue. The problem here is that both Apple and Amazon are exerting a stranglehold over publishers’ ability to distribute their digital products.

It would be if they could only profitably sell their books at two bookstore chains. And perhaps there are indeed similarities to the hold Barnes & Noble and Borders had over the book business for years — that didn’t turn out too well in the end, either.

It’s hard to blame Apple and Amazon for the state of affairs. They’ve simply taken advantage of a situation in which publishers have completely dropped the ball.

The latest salvo comes in today’s Wall Street Journal, which quotes antitrust experts as saying the Justice Dept. had little choice but to sue Apple and the publishers, given the publishers ganged up to fend off Amazon in violation of U.S. law. The New York Times’ David Carr, by contrast, argued a few weeks ago that suing the publishers while letting Amazon off the hook was “the modern equivalent of taking on Standard Oil but breaking up Ed’s Gas ’N’ Groceries on Route 19 instead.”

Both viewpoints are interesting but beside the point, at least as far as the survival of the publishing industry is concerned.

Rather than “colluding” with Apple to raise e-book prices, the publishers could have been figuring out how to do their own collaborative ventures. That, after all, is what TV networks did when they launched Hulu. More recently, it’s what Condé Nast, Hearst, Meredith, News Corp. and Time Inc. did in launching Next Issue Media earlier this month — providing an array of magazines for one monthly fee, à la Netflix.

Neither of those deals are paragons of success, either. Those same TV networks are having second thoughts about the monster they created in Hulu. Next Issue won’t be going too far until it creates a more compelling value proposition on a platform other than Android. But come on. At least they’re trying, not rolling over completely on Apple and Amazon.

Keep in mind that HTML5 — already used by the Financial Times to kiss off Apple’s demands — allows anyone to essentially bypass Apple’s app store and set up their own virtual storefront. If Apple or Amazon find ways to block you, well, you have your own basis for a federal lawsuit, as locally-owned TV stations had in must-carry disputes with cable companies.

It’s not hard to imagine Penguin, Harper Collins, Simon & Schuster, Macmillan and Hachette –some owned by the very media moguls who dreamed up the TV and news deals — coming up with some kind of all-you-can-eat deal for their books. Use your imagination: digital books of the month, all the mystery books you can devour, everything Stephen King wrote — you name it.

Of course, you’d have to do it in such a way that you don’t get accused by the feds of colluding all over again. But surely if bloated TV and media companies can get away with it, publishers can find a way.