Big news in the eBook industry

You may have noticed that there is a lot going on in the eBook industry lately.

For one, back in April, the U.S. Department of Justice filed a suit against Apple and five of the top U.S. publishing houses for what they term “colluding to set eBook prices and sales models”. This was in response to an agreement formed between Apple and those 5 publishers to set eBook prices as per what is known as “the agency model”. This enabled the publishers to set their prices at the level they wanted to set, and dictate to the eBook distributors what the price ought to be. The U.S. department of justice think this is behavior that violates the antitrust laws. Apple and the “big five” maintain that their decision to sign such an agreement was to prevent from building and strengthening a monopolistic hold on the eBook sales market.

While I agree that a retailer shouldn’t have the autonomous decision to set eBook prices, I have to maintain my objection to the trend that publishers have taken in pricing eBooks over and above the cost of a physical book. Whether the matter is that physical book prices have been artificially low all these years, or that publishers are artificially inflating eBook prices now is neither here or there to me. What I need to see is that anomaly addressed in some manner. If that can be addressed satisfactorily within the scope of an agency model for eBook pricing, then I am all for it. The fact is that writing is hard work, and those who contribute to the end result of me being able to read a book on my eReader should be paid according to their efforts.

In other news, Microsoft has invested some $300 million dollars in Barnes and Noble’s Nook business in a bid to challenge Amazon’s hold on the eBook market. This is startling news for us who have been watching the eBook industry.

Some of you may know that Microsoft was the one to save Apple in the years when they were buckling under the pressure of the personal computer business. And it was with that investment in Apple by Microsoft that Steve Jobs was able to turn around and create the monolith that Apple is today.

With that in mind, think of what Microsoft’s investment could then do to the Nook ecosphere. With enough vision and direction, Nook could end up clobbering the Kindle in the eReader market.

I maintain that the Kindle ecosphere is robust and truly innovative and the Nook falls behind in being truly free from being tethered to a computer. The Kindle is truly wireless: no matter where it is in my house, I can browse the library from any computer of mobile device and send an eBook that strikes my fancy to my Kindle for later reading. I can’t do that with my Nook. And that makes the Nook a non-option for me and for many others. I think the first thing that Microsoft needs to tackle is setting the Nook free from its USB cable.

Whether their investment makes any kind of a dent in the eBook world remains to be seen – and we all eagerly wait to see what the numbers show at the end of the fight.

Whatever happens, with the D.O.J. going after Apple and 5 of the 6 big U.S. publishers, and Microsoft investing in Nook – the eBook industry is definitely in for a wild ride in the coming months. I predict we will see some exciting times.

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