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Video: Jobs predicted or knew of publisher boycott

updated 11:38 pm EDT, Wed May 16, 2012

Video shows Jobs predicting publisher revolt

A 2010 video has surfaced of Apple co-founder Steve Jobs prognosticating that e-books would eventually wind up around the same price on most competing e-book stores. The video comes as the Justice Department pursues its e-book lawsuit against Apple and two other publishers for alleged price-collusion. Depending on one's interpretation of the video, Jobs' statement could imply foreknowledge of publisher plans or just industry canniness, and could even figure in the Justice Department's case.

The Justice Department contends that Apple and other publishers conspired to keep e-book prices higher than the lowest possible price. Some publishers previously named in the suit -- including Simon & Schuster, Hachette, and HarperCollins -- have already settled with the government. Apple, MacMillan, and Penguin deny the charges and allege that it was, in fact, Apple's chief e-book rival Amazon that was fixing prices and engaging in anticompetitive practices.

The video was shot on January 27, 2010, at the launch of the original iPad. In it, The Wall Street Journal's Walt Mossberg asks Jobs why a customer would pay $14.99 for an iBook when they could get the same e-book from Amazon for $9.99. Jobs replies that "[E-book] prices will be the same ... the publishers are actually going to withhold their books from Amazon."

It is unclear whether Jobs' statement indicates some degree of insider knowledge as to the publishers' leanings, or whether he was simply making an educated guess as to the likely outcome of the publishers' ongoing struggles with Amazon. Around that time, the publisher Macmillan was engaged in a pricing dispute with Amazon. Macmillan wanted to raise prices for its books from $10 to $15, while Amazon wished to keep selling the books at its standard price. Three days after the Jobs video was shot, Amazon pulled Macmillan's books from the Kindle store, though the online retailer soon acquiesced in the face of impending competition from Apple's iPad.

The video could be used by authorities as a means of supporting their case. The Justice Department contends that a recently-revealed email from Jobs supports the allegation that Apple intervened to convince a major publisher that Apple's intended pricing model was the way for publishers to go. Jobs' email was sent several days before Amazon pulled Macmillan's books from the Kindle Store. The agency pricing model preferred by Jobs was not an Apple invention, but instead has been a mainstay model in the publishing world for some time.

by MacNN Staff



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