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Friday, August 2, 2013

Prices for e-books

I like American fiction from 75-100 years ago. The combination of taking so many long-haul flights and owning an Amazon Kindle has given me the opportunity to catch up on a lot of deferred reading. In recent months I've gotten through one e-book each by Sinclair Lewis, F. Scott Fitzgerald, Theodore Dreiser, Upton Sinclair, and John dos Passos. My reading list remains long, so I continue to shop.

Perhaps you too have noticed that there is a sharp discontinuity in prices for e-books from this period. Some are free. Others cost the typical $9.99. Ever wondered why? Here is your answer. It's another consequence of the decision by the U.S. Congress to lengthen the duration of copyright -- sometimes pejoratively called the Mickey Mouse Protection Act that kept the oldest Disney animated films out of the public domain. Basically, e-books written prior to 1925-1930 are free because their copyrights have expired. E-books written after that time still cost money.

I don't object. Not only is intellectual property my profession, it's important to the American economy. Although much American manufacturing has gone overseas forever, the American intellectual property industry -- software, books, patents, Hollywood films, and so on -- remains very lucrative and employs tens of millions of Americans according to the U.S. Dept. of Commerce. For this reason I believe people who pirate movies or music in their selfishness are undermining one of the most important sectors of our economy. Let's bring them to court.

Meanwhile, it's fair to ask why most copyrighted e-books cost $9.99 or more. If you have a Kindle, the simple answer is that Amazon deliberately priced the Kindle tablet itself at zero margin in order to sell you e-books -- from which all their profit is derived. That's good business sense. If you had paid twice as much for a Kindle, you'd have a valid complaint that $9.99 for an e-book is a ripoff. But no one complains when they buy a Kindle on the cheap.

Apple rightfully saw the Kindle as a threat to iTunes and iPads. But when Apple entered the e-book market, they adopted dubious tactics. In 2012 the Dept. of Justice filed suit against Apple and publishers for fixing prices for e-books. The other defendants settled; blinded by hubris, Apple chose to go to trial and lost. If you still believe that Apple is Heaven's gift to 21st-century humanity, there's another counterexample to ponder.