The E-Book Empire Strikes

Apple held most of the music industry virtually at knifepoint for years, and that wasn't necessarily a bad thing, especially if you were a consumer who wanted a legal way to get popular music at a fairly reasonable price: a buck a song, 10 an album, no exceptions. It was only about a year ago that iTunes let go of its dollar-store policy and allowed for a little leeway in its pricing. True, that leeway amounted to only a few cents per song, but the point is, for a very long time, it was the distribution channel dictating prices, not the publisher.

Amazon's recent actions were in the same spirit, but the results were very different. The etailer had a brief spat with Macmillan, one of the largest book publishers providing titles to the Kindle e-book reader. Amazon wanted to keep the price of e-books below 10 bucks, but Macmillan thought some of its stuff was worth more like US$13 to $15. So Amazon pulled all Macmillan books, which put a noticeable dent in its available selection.

It was pretty clear from the get-go that this was only going to be a temporary move -- Amazon even acknowledged in a note to users that it would have to eventually capitulate, and at that point, it would be readers who'd get to decide whether the price was right. The freeze-out lasted a whole day.

So how come a book publisher got its way so quickly, when the Big Four music labels had to fight tooth and nail for years just to charge 30 cents more for a song? Well, experience counts for something. Producers of every sort of medium that can be digitized -- books, movies, TV -- they all look at the music industry as an early example of what not to do.

Also, Amazon can't pound book publishers into submission with the threat of piracy. Back in the day, iTunes could basically tell record labels: "Look, anyone with a CD drive on their computer can rip and share your stuff, so come with me if you want to live."

Making e-books isn't as easy. You can't really jam the latest Stephen King novel into a computer and have an e-book ready to distribute in five minutes, and scanners that can turn book pages automatically aren't really standard laptop equipment. You'd need some very dedicated book pirates out there with some insane typing skills. Instead, e-books are issued by the publisher and can be tied up nicely with DRM. I'm not saying it's impossible, just that it's hard to imagine the book industry having a Napster moment.

And Apple's not just impacting the situation with its legacy in music -- its new hardware is also probably a factor. Just last week, it did its iPad show and tell, which included an all-new iBook Store. Now that Amazon is looking at what could be a serious Kindle competitor, book publishers likely have a new degree of leverage.