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Kindle Nation Daily’s Letter to the Department of Justice in the DOJ eBook Price-Fixing Lawsuit Against Apple and Five Publishers

(Editor’s Note: As we have mentioned beforethe U.S. Department of Justice (DOJ) has filed a major antitrust lawsuit against Apple and the five original “agency model” publishers charging them with a massive price-fixing conspiracy in violation of federal law. The DOJ Antitrust Division and the court wants to hear from members of the public during a 60-day comment period on the lawsuit which expires June 25, and what follows is my letter to the court. Please see this post for instructions on how to submit your comments. –Stephen Windwalker.)

June 18, 2012

Via Priority Mail

John Read, Chief
Litigation III Section
Antitrust Division
U.S. Department of Justice
450 5th Street, NW, Suite 4000 Washington, DC 20530

 

Dear Mr. Read,

I am writing to you both as an individual citizen, reader, author, and former independent bookstore owner, and also as the founder of  the Kindle Nation Daily website, one of the largest active communities of ebook readers and enthusiasts. Along with tens of thousands of other avid readers and thousands of other authors who are associated with the Kindle Nation Daily community, I am keenly interested in the Department of Justice’s (DOJ) civil antitrust action (United States v. Apple, Inc. et. al., Civil Action No. 12-CIV-2826) against Apple, Inc., and five of the largest U.S. book publishers (defendants). My purpose in writing this letter is to share and underline several points that I believe should be central points of emphasis for the DOJ and the courts as this case proceeds and legal remedies are considered.

My single most important point is one that I am sure the DOJ and the court understands well, but which appears to be a matter of confusion for many others: the major parties in this case are the six defendants (Apple and the five publisher defendants) and the DOJ, which is empowered here to act on behalf of consumers. While it ought to be obvious that this is so, and that the alleged collusion has robbed tens of millions of dollars from American consumers and denied them the opportunity to read millions of other books that they deemed they could not afford, many who have commented on this case have tried to shift the focus, from this irreparable harm to consumers, to the consequences of judicial action for other interested entities who are not parties to the case, including Amazon, Barnes & Noble, and countless other booksellers, authors, literary agents, and other intermediaries and players in the book business. As recently as today the headline in the New Yorker’s coverage of the case demonstrates this confusion: “Paper Trail: Did publishers and Apple collude against Amazon?” Of course it would be naive not to recognize the importance of the case to these players, but to seat them at the table as parties is to miss the point of the irreparable harm to consumers.

In an effort to place the primary focus where it belongs, I would like to offer the following points and perspectives:

1. By colluding to raise new-release ebook prices by 30 to 100 percent, the defendants have caused irreparable harm to millions of readers of all ages, including public school and college students and other children, families, and people of limited means who bought ebook readers or downloaded free Kindle apps based on the affordability of ebooks before the defendants imposed the agency model. Prior to the launch of the Kindle it was widely believed that reading was on the decline in the U.S., as noted by the late Steve Jobs when he declared early in 2008 that the Kindle was a flawed concept “because nobody reads any more.” Among the reasons for the decline of long-form reading were rising prices for new hardcovers and paperbacks, the closing of many public library branches and bookstores, and the diminishing selection of physical books offered to the American public through existing distribution channels. The launch of the Kindle in 2007 and the fact that Amazon made Kindle apps free for anyone with a smartphone, a computer, or a Kindle meant that any reader could have a well-stocked bookstore at their fingertips just about anywhere in the U.S. and beyond. The Kindle platform succeeded because of its catalog, convenience, competitive pricing, and Amazon’s customer base and unflinching commitment to the platform, and its success has helped to fuel a resurgence in reading that is bridging the digital divide across class and age lines. The Kindle store pricing that some of the defendants and other Amazon critics demonize as “predatory” has had a wonderfully positive effect on this resurgence in reading, and has social, economic, and cultural value far beyond anything that would be achieved, for instance, by propping up the defendant publishers or another player like Barnes & Noble.

2. Illegal collusive behavior must not be separated from the consequences of that behavior, either in the punishment of the behavior or in the remedies proposed. Many of the more thoughtful critics of the DOJ action have taken pains to state that they have no knowledge or legal expertise about the collusive behavior alleged by the DOJ, but such behavior and its objectives are and must remain at the center of this case: the DOJ alleges with an impressive recitation of evidence that the defendants participated in an unprecedented conspiracy to force retailers to raise their new-release ebook prices by 30 to 100 percent. If that’s what happened, the defendants must be punished and retailers must be allowed to restore competitive pricing. For the publisher defendants to claim no wrongdoing after they kept their corporate counsel out of the rooms in which the collusion allegedly occurred is, if the defendants acted as alleged by DOJ, an insult to the court and to all interested parties. When companies collude or conspire to raise prices to the detriment of consumers, they know full well that they are on thin ice. In this case, because of the defendants’ collusion, consumers paid tens of millions more than they would otherwise have had to pay for ebooks. In countless other cases they had to refrain from buying ebooks they hungered to read. Because of what the defendants did, they should not only have to stop doing it, but they should remain under close regulatory scrutiny (as spelled out in the proposed settlement) for years, and they should be required to pay tens of millions, and ultimately perhaps hundreds of millions, in actual and punitive restitution to consumers.

3. The U.S. publishing industry is fond of saying that “the DOJ doesn’t understand the book business.” However, the defendant publishers and their associated intermediaries and gatekeepers arrived in the 21st century very poorly prepared for the future either in their fundamental economic cost structure or in their commitment to invest in innovation. The industry’s major players do not deserve any fate other than that which a collusion-free marketplace holds for them. On the other hand, over the past decade, increasing numbers of authors, booksellers, publishers and others have combined innovation, the use of new technologies, and some risk-taking to circumvent what many feel has become a rather calcified literary-industrial complex and instead established new and profitable models for making more direct connections between authors and readers. In spite of the fact that readers are paying less for ebooks than they have paid in the past for print books, most of the authors of distinction who are taking a direct route to publishing are earning greater royalties than they would ever have received from traditional publishers. They have shortened the publishing timetables from years (or in some cases decades) to months or weeks. While traditional publishing players lament the costs, for themselves, of disintermediation, tens of thousands of others are clear winners in a world where intermediaries are no longer sheltered from the need to prove their worth. The defendants and their apologists have attempted to lock in the wastefulness and flawed economic decision-making of the industry and its intermediaries by passing their costs on to consumers in the form of the 30 to 100% price increases imposed by the agency model, but claims that DOJ should protect the intermediaries in the publishing world have neither a legal basis nor any value for the culture or the country. It would be more accurate for publishers to say that the DOJ “doesn’t understand our book business the way that we understand our book business.” That would be fair in a certain sense, but the truth is the publisher defendants’ focus on their own understanding of how the publishing business used to work has kept them from evolving and understanding how the publishing business works now, and how it may work for at least a few years in the future.

4. The U.S. book publishing and bookselling business has been undergoing enormous change and disruption for decades, but the book trades are not a public utility. It is not the role of government or the courts to prop up the industry or any of its players. It would be especially inappropriate for the government or the courts to manage the aforementioned change and disruption so as to punish innovators, provide life support for second- and third-movers or protect industry players whose demise may be imminent due to their lack of innovation or financial discipline. The number of independent booksellers has been in steady decline for decades and will almost definitely continue to decline for the next several years, regardless of the DOJ action. Over the 20-plus years since I owned an independent bookstore and was a member of the American Booksellers Association in the 1980s, there have been many bogeymen blamed for the demise of independent brick-and-mortar bookselling, including of course Barnes & Noble itself. Like Borders before it, Barnes & Noble may well go out of business in the next few years because of poor management of real estate costs and its late, second-mover entry into the two major growth markets for bookselling in the past 15 years, online bookselling and ebooks.  But the idea that the DOJ should be in the business of propping up Barnes & Noble by reframing the remedies in this case is as odious as it would be if we were to substitute the name of WalMart in the equation, particularly after Barnes & Noble has played as great — and some would say as “predatory” — a role as any other company in hastening the demise of independent retail brick-and-mortar bookstores over the past few decades. Nor should DOJ prop up independent booksellers, as much as we may lament their demise. Sadly, the focus on the various bogeymen blamed for these developments, and booksellers’ ideological opposition to the Amazons and others, has too often taken those booksellers’ focus away from the kinds of innovation and entrepreneurial thinking that have saved some bookstores and might, if in greater evidence, have saved far more. Nor is it true that even a single independent bookstore would be saved were the DOJ or the court to reframe its proposed remedies so as to save Barnes & Noble or to soften the impact for the defendant publishers.

5. The widely promulgated notion that the agency model has created a lush garden of innovation in the ebook business is patently untrue. The initial Barnes & Noble Nook was widely seen as a second-mover product that was very nearly dead on arrival when it was launched several months before the advent of the agency model. It began to gain traction only when the agency model guaranteed Barnes & Noble a 30% gross margin and freed it of any need to compete with Kindle Store pricing. By Barnes & Noble’s own public admission, the Nook might well have failed in free-market competition if it had not been for the agency model conspiracy. The primary Nook “innovation” advanced to date is the relatively minor enhancement of a front-lit glowing screen, and other elements of the Nook infrastructure such as the Pub-it authorship platform are barely distinguishable from previously existing elements of the Kindle infrastructure. Much and perhaps most ebook reading on the iPad and iPhone occurs in the Kindle environment, and Apple’s claim that the iPad and its search-unfriendly, thinly populated iBookstore are successful innovations is a fantasy: the primary success of the iBookstore has been that it made the agency model price-fixing scheme possible in the minds of the defendant publishers.

6. Many of the arguments against the DOJ’s action and proposed remedies are based on intense fear and loathing of Amazon, none of which is surprising in an industry which is both change-averse and especially well-connected to the chattering classes in the national news media. It is absolutely appropriate for the DOJ and other government agencies to continue to scrutinize Amazon’s behavior as a corporate taxpayer, as a direct or indirect corporate employer, as a gatherer of customers’ private information, or as a competitor in the national and global business marketplace. DOJ may well be justified in taking future action on one or more of these issues, but there is no basis for penalizing Amazon now because it is big, because it is an aggressive innovator whose success is based on disrupting existing business models, because it has shown a creative capacity to reduce consumer prices while still paying full wholesale prices itself, or because smart disintermediation allows it to pay an author a higher royalty for a $5 ebook sale than a traditional publisher would pay an author for a $25 hardcover sale. If at some point in the future Amazon uses its growing marketplace clout to squeeze authors or publishers, for instance, DOJ should not hesitate to haul the company into court, but such behavior cannot be presupposed, and indeed it would require such a radical change in Amazon’s business model that it would be immediately obvious to all.

7. Although Barnes & Noble attorney David Boies indulges windy, sweeping prose on behalf of “the national economy and culture, the future of copyrighted expression and bookselling in general,” he does not provide any evidence or argument that cultural and business trends that are already well underway would be reversed if the DOJ action were not taken. The bottom line in Boies’ argument is the bottom line for Barnes & Noble, a failing company that is choking to death on its own expensive real estate leases and its lack of innovation during the decade when its former primary position in the U.S. retail book business was overtaken by a much more innovative upstart competitor. In service of that bottom line, Boies wants DOJ to frame its actions so as to prop up and protect Barnes & Noble so that, for as long as it is able to hang on, it can wring as much profit as possible from its second-mover status in the ebook marketplace. But the bottom line for consumers should take precedence over Boies’ desire to keep Barnes & Noble on life support. Consumers who purchase and read ebooks have lost tens of millions of dollars because the defendants conspired to raise the prices of bestselling ebook new releases. The defendants’ behavior described in the court documents has been reckless, avaricious, and destructive — perhaps even to “the national economy and culture, the future of copyrighted expression and bookselling in general” — and the DOJ should not rule out the possibility of criminal prosecutions if facts warrant as this action proceeds. Finally, it is somewhat surprising that we must take pains to correct some of the utterly inaccurate notions with which attorney Boies has burdened the record in this case. Among the country lawyer’s tricks with which Boies has attempted to dazzle us are his claims that the American public opposes the DOJ action because Manhattan Senator Charles Schumer opposes it, or that authors oppose the action because Boies has offered up a quotation from Scott Turow, president of the notoriously litigious Author’s Guild, which has been on record in the past as opposed to public library book borrowing.

8. The proposal by some that fairness could be achieved via a decision to allow publishers to mandate uniform retail prices would be catastrophic for readers. Such a mandatory price-setting scheme would reward the colluders and would do more to maintain the outmoded status quo in the publishing world than other step that has been proposed. Worst of all, of course, it would allow the defendants to continue to steal tens of millions of dollars each year from the pockets of consumers.

9. Instead of innovating to become leaner, faster, and more profitable in the new world of publishing, the defendants decided to try to stop time by breaking the law. Faced with the fears that motivated the agency model conspiracy, publishers might have taken a different, more innovative path. They could even have followed such a path collectively without fear of violating anti-trust laws. When Amazon launched its new, disruptive ebook business model, beginning ever so slowly in November of 2007, publishers might have reimagined and restructured the book business with new, innovative, more efficient, and profitable roles for themselves. They might have created their own online retail outlets to offer their titles in Kindle-compatible ebook form. They might have worked with brick-and-mortar booksellers to bundle ebook and digital formats at handy little kiosks in every bookstore. They might have turned ebooks into the 21st century reincarnation of Literary Guild and the Book-of-the-Month Club, those 20th century behemoths that managed to sell millions of hardcover books for 99 cents each without creating any significant scare over the erosion of “the value of the book.” They might have tried to strip away the excess weight of unsustainable corporate costs and their reckless addiction to gamble huge advances for bestsellers, to rework their economics at new, competitive price points. They might have said, “We’re no longer going to pay for intermediaries that add no value.” They might even have pursued one of the collective strategies that they considered and rejected back in 2009, called Project Z or Bookish, to create a joint venture that would establish a new ecommerce platform to sell ebooks wholesale to retailers, or retail to the ebook-buying public.

10. Although neither Amazon nor Barnes & Noble are full parties in this case, the DOJ and the court should impose one burden on both companies (and on defendant Apple Inc. and perhaps other ebook retailers) as part of the remedies associated with the actual and punitive restitution that defendants should be forced to pay to consumers. Specifically, the ebook retailers should be required to provide to all of their customers a detailed record of all ebooks that they ordered during the full period of the agency model from April 1, 2010 until the present date or beyond, in order for customers to qualify for the restitution payments due them.

I am grateful to the DOJ and to the court and all parties for your consideration of these matters, and I hope that all concerned will take these views into account in this case.

Sincerely,

Stephen Windwalker

Founder and CEO, Kindle Nation Daily

 

Is It Apple Forcing Down Apple’s Hardware Prices, or Amazon?

Apple’s Lower Prices Are All Part of the Plan,” ran the headline for an interesting piece yesterday by Nick Wingfield of the New York Times.

Really?

Wingfield believes that Apple, “once known as the tech industry’s high-price leader,” is carrying out a major strategy change to the point where it is now competing with, and often beating, its rivals on hardware prices.

I’ll have to admit that despite some interesting anecdotal pricing comparisons made by Wingfield, I’m not feeling him. Yes, Apple has certainly shown some signs that it is pulling back some on its hardware prices, and those prices could soon collapse by 30% or more due to forces entirely outside Apple’s control. We’ll get to that, but it is unlikely that such a collapse would reflect Apple’s strategy.

To conclude that Apple has a real commitment to competitive pricing in its corporate DNA, we’d have to see a lot more evidence of significantly  lower prices on mainstream hardware items like the iPad, the iPod Touch, and the various workhorse Macs (as opposed to boutique products like the MacBook Air or carrier-subsidized products like the iPhone.)

It could happen. But to suggest that Apple management will be in the driver’s seat applying the gas on such a strategic transformation is to ignore a number of powerful forces that leave Apple few options.

For starters, let’s look at the tablet market, which it is entirely fair
to say was created through the innovative brilliance of Apple and its
late leader Steve Jobs. The brilliant success of the iPad — both in its elegance and in its acquisition rate by the public — made fierce competition inevitable. So while iPad sales continue to grow dramatically quarter over quarter, iPad’s overall tablet market share fell from 95.5% a year ago to 66.6% in the third quarter of 2011, FierceWireless reported Friday. Nothing truly stunning there; it’s a pattern one could expect to see in any new market as it begins to mature.

A little more of a jaw-dropper is that the market share for the various Android tablets on the market — including devices from HTC, LG, Motorola, Samsung, Acer and Dell — grew from 2.3% to 26.9% in the same period.

Now, in the fourth quarter of 2011, the Android market share is likely to grow even more dramatically with the launch of the Kindle Fire tablet, priced at $199 and capable, Amazon clearly believes, of doing everything an iPad can do except for the things that only a few people really care about.

If the Kindle Fire hits the hardware sweet spot once people have it in their hands, it could quickly become the single most coveted holiday gift for smart grownups this year at that $199 price, and that price and popularity would constitute a very powerful if traditional pressure on the $499-to-$829 iPad price structure.

But there is another set of pressures forming just now that could totally pull the rug out from under iPad prices. As we reported last week in our post Interested in Trading Up for a New Kindle Touch or Kindle Fire Tablet? Pull Your Clunker In to Amazon’s Super Lot, Amazon is now investing website real estate and an aggressive marketing campaign to create its own secondary marketplace for virtually all tablets and ebook readers. If Amazon can succeed at enticing thousands of the customers whom it shares with Apple to trade in their iPads and iPod Touches for the 30% to 40% offers now on the Amazon website, those trade-in units could stake Amazon or its “Warehouse Deals” subsidiary to an off-price inventory that might, in time, create an entirely new form of downward pricing pressure on Apple.

What’s really going on here? Obviously, an important part of Amazon’s motivation is to give its customers as much incentive as possible to buy its latest-model Kindle Touch and Kindle Fire units, and regardless of what you paid originally for an iPad it’s a compelling proposition to be able to trade it in now for a brand new Kindle Fire and actually have money left over.

But there could be another mission for Amazon, one that could well influence the economics, the retail pricing, and perhaps even the share price for a competitor such as Apple over the next few years. It’s easy at this point to think that Amazon’s new two-way hardware market will be dwarfed in scale by Apple’s front-door production and retail power.

But Amazon knows better than anybody the effects that its Amazon
Marketplace secondary market for new and used books had on competing
booksellers and publishers over the past decade. Some in the publishing
industry believe that Amazon’s customer-friendly innovations actually
destroyed billions of dollars in corporate wealth
, even if it also
fueled tens of thousands of small and often home-based businesses.

“Some companies,” Amazon CEO Jeff Bezos is fond of saying, “do everything they can to raise prices for their customers. Other companies do everything they can to lower prices for their customers.”

It is clear that Amazon has always been the latter kind of company, and equally clear that Bezos feels that Apple has been the former kind of company both generally and in its activities with the Big Six publishers to create the “agency model” to fix ebook prices at higher levels than Amazon wanted to charge.

If Apple now seems to be in a state of transition from the former kind of company to the latter kind of company, it remains to be seen whether the transition is “all part of Apple’s plan” or, at least in some significant part, the result of an impressive array of economic pressures that Amazon’s innovations are bringing to bear on Apple.

Note: it happens every 90 days or so, and this afternoon Amazon will report its quarterly earnings after the close of the markets, with the usual conference call scheduled at 5 pm Eastern. Apple reported its earnings last week and apparently disappointed investors. Amazon may well do the same in the short term, but the company’s commitment to low margins could well be leading it to a promised land in which it could gain as much as 50% of the U.S. trade book market by 2013.

In the Battle over eBook Apps on the iPad, Apple Says “My Way or the Highway;” Kindle Replies “Whatever, Dude”

By Steve Windwalker
Earlier this week — as we sat around waiting for Amazon to come clean and announce a Kindle tablet — we conducted a little experiment here at Kindle Nation.
In the midst of considerable internet fanfare, Apple forced a change in the Kindle App for the iPad, the iPhone, and the iPod Touch. Basically, the result is that there’s no longer a link to the Kindle Store within the Kindle App.
Our experiment? We thought we would see what would happen if we didn’t have anything to say about it. More of those kinds of news items appear these days on our BookGorilla.com sister blog anyway, so we didn’t feel we’d be letting you down by staying mum.
Why? Well, this is the kind of “issue” that gets a lot of attention from tech bloggers and partisans who believe the world will soon end in a conflagration ensuing from global thermonuclear war between Apple and Amazon. We were curious to see if the change really mattered much to anyone among the thousands of serious readers who visit Kindle Nation each day.
The results are in. We didn’t receive a single email, blog comment, tweet, or Facebook comment or message about the change. We know that a small but significant percentage of our readers read Kindle books on their iPads and other iOs devices, so it’s actually pretty remarkable that there wasn’t a peep or a tweet. 
But now that the dust has settled, or now that the dust continues to just sit there, we’ll briefly review what has happened here. 
  • In January 2008, shortly after the launch of the Kindle, Apple’s Steve Jobs commented that the Kindle was “a failed concept from the top” because “nobody reads any more.”
  • In January of 2010, at the event announcing the launch of the iPad, Jobs said that “Amazon has done a good job with Kindle” but that Apple was “going to stand on their shoulders” and the the successful ebook concept even further with iBooks. Several ebook platforms including Kindle, Nook, and Kobo created free Kindle Apps, all with better selection and better features than the iBooks platform, and it quickly became obvious both that Kindle would be the leading iOs ereading platform and also that Apple was either ill-prepared or unmotivated, or both, to make much of the iBooks platform.
  • Early this year, Apple said it was going to change the rules for other reading apps on its iOs devices so that users would no longer be able to click on an in-app link to be taken directly, for instance, to the Kindle Store. (Well, that’s not exactly what Apple said. What Apple actually said was that it would grab 30 percent of gross proceeds from all sales generated by in-app ebook sales on platforms such as the Kindle, Nook, and Kobo. 30 percent, of course, constitutes 100 percent of Amazon’s standard share of Kindle ebook sales.)
So it is no surprise that neither Amazon nor the other players would go along with this kind of greedy power play. If there was a surprise, it was 
  • first, that Apple actually followed through and brought this to a head; and
  • second, that anyone thought it would really be an effective use of Apple’s power.
Instead, it seems like Apple is doing all it can to make itself irrelevant to the serious readers who do most of the buying when it comes to ebooks. And Amazon, obviously recognizing that Apple’s power play changed very little, has played its hand in a very calm, understated way. The company sent the following message Wednesday to Kindle customers who have registered an iOs device for Kindle App use:

Dear Amazon.com Customer,

We’d like to update you on a change to the Kindle application that affects the way that you access the Kindle Store. In order to comply with recent policy changes by Apple, we’ve removed the “Kindle Store” link from within the app that opened Safari and took you to the Kindle Store.

You can still shop on iPad, iPhone, or iPod touch–just open the Safari web browser and go to Amazon.com. (For quick access, we recommend creating a bookmark in your web browser.) Your Kindle books will be delivered to your Kindle application and automatically downloaded when you open the app. Thanks for being a Kindle customer.

Exactly. But perhaps out of an overabundance of politeness, Amazon didn’t take things one step further. Sure, you can “bookmark” the Kindle Store on your iOs device’s browser. But you can also add the Kindle Store to your iOs Home screen, right alongside your Kindle App, just as you see them in the second row of the screenshot at the right. Here’s how:

  • Just open your iPad’s Safari browser and click on or enter this link – http://amzn.to/Kindle-on-iOs  
  • When the Kindle Store page opens on your iPad browser, just click on the little icon just to the left of the browser’s URL entry field, and select “Add to Home Screen” from the pulldown menu that pops up, as in the screenshot at right.
  • Then just find the new Kindle Store icon on your iPad’s Home display, tap it twice so you can move it, and use your fingertip to move it next to your Kindle App. (Note: While you’re at it, you may also want to move the iBooks icon to the same general area, for days when you want to buy expensive books at the prices Steve Jobs feels you should pay for them.)
Over at the Atlantic Wire, blogger Rebecca Greenfield’s view of the Apple power play seems well-considered, if a little more glum than ours: “It looks like everyone involved loses something in the e-reader app store battle,” she writes. She says it is “far more inconvenient for iPad users to get reads on their devices,” but I have to admit that I am not feeling her pain. What’s so hard about tapping the Kindle Store icon and buying a book. You’ll seal the deal and arrive back in your Kindle App a few seconds before the new book downloads. Shazam.

But Wired Epicenter’s Tim Carmody concludes that “Apple’s new rules haven’t knee-capped Amazon in the slightest. Far from it. In fact, Apple’s given them a gift….”

Whatever the case, it is certainly hard to imagine that Apple could make any kind of plausible case that their power play was undertaken for the benefit of iPad or other iOs users. And the more of these silly missteps we see from Apple, the more likely it is that ultimately they will begin to drive even some of their own loyal fans off in the direction of some other tablet from some other company, perhaps a company that already has a stake in the ebook business.

BookGorilla.com eBook Headlines, June 9, 2011: YA Books & Censorship, Sunshine Pricing, Connelly, Kobo, Calculator, Nook, Kindle, Apple, Piracy, Textbooks, Tablets, and More

Wondering what’s going on in the world of eBooks today? You’ve come to the right place….

Our headliners:

Other stories of interest:

Taking a Huge Bite Out of Apple’s Music Ecosystem: Amazon Brings Magical Kindle-Style Customer-Centric Convenience and Connectivity to Music with the Amazon Cloud Drive and Cloud Player

This is huge.

Depending on your point of view, you might think this has nothing to do with the Kindle. Or, if you’re like me, you may well think it has everything to do with the Kindle.

But this morning Amazon introduced a new suite of services that employ the Amazon Cloud to offer customers the same magical and revolutionary “buy anywhere, play anywhere” functionality that we Kindle readers enjoy — but in this case it is for music, audio files, and other forms of content.

Here’s a delightfully simply video that Amazon is using to explain the new service:

It is astonishingly easy to use, and let’s be very clear here: it allows Amazon a huge leapfrog ahead of Apple in offering dazzling convenience where iTunes has totally failed its music customers. As I wrote on this blog last August while reviewing the then new Kindle 3:

With respect to reading, my Kindle is the mother ship. This has been true with every Kindle I have owned, but the Kindle 3 reading experience is so terrific that I would seldom choose to read on another device. Nevertheless, there are plenty of people using the “No Kindle Required” approach with freely downloadable Kindle apps for other devices and there are even times when for one reason or another I am without my Kindle when I want to read a few pages of a Kindle book. For all of us, Amazon makes this a shockingly easy, friction-free experience. It doesn’t take a bit of work. How great a feature is this capacity to move seamlessly from one Kindle-compatible device to another?

Well, for comparison’s sake, can we discuss iTunes for a moment? Members of my immediate household own 1 iPad and 3 iPod Touch units. Each of them is connected to the same Apple iTunes account. We’ve paid the iTunes Store for hundreds of songs, perhaps thousands. We’ve spent hours saving other digital files from CDs we had purchased over the past couple of decades, strictly for our own personal use, and there are no pirated songs or files on any of our various devices and hard drives.

So why is it that my son and I can’t access each other’s iTunes songs, all paid for with the same account? And why, whenever we’re getting ready for a road trip where we might have an opportunity to listen to some music, does the preparation always seem to include a rather nudgy and painstaking process of getting the right stuff to synch up on the right devices without overwhelming storage space with free sample episodes of Friday Night Lights that I apparently made the mistake of downloading to my iTunes account in some earlier decade? And why does Apple insist on prompting me to download a new iTunes software update about every third time I log onto iTunes? And why, if I say yes, does the process slow down my 2009 iMac to a near crawl for the next 20 minutes?

Can’t this stuff be done in the background? Has Apple not heard of the cloud? My point here, of course, is not to complain about Apple so much as it is to say that, for the Kindle platform and the various Kindle apps, Amazon has nailed this stuff. And it is important, whether it comes up ten times a week or once a year.

Okay, I should lighten up. It’s not like I can expect Steve Jobs to drop everything and roll out new features just because Steve Windwalker filed a post last August about some annoying AppleFail. After all, Steve Jobs isn’t Jeff Bezos.

Okay, that’s a little over the top, and you probably know me well enough to know that I could, if pressed, go on and on here. But I won’t.

I’ll just say that it took me less than three minutes to follow the steps and set all this up this morning. I didn’t spend $20 to upgrade my Cloud Drive from 5GB to 20GB. Instead, I took advantage of a special promotion and got the 20GB upgrade when I purchased the Stones’ album Let it Bleed for $5.

And in another 30 seconds I was listening, from what used to be my iTunes library, to Bernadette Peters’ cover of the old Elvis hit Don’t.

Don’t.

Which is what you can say to your computer the next time it tells you that you need to update your iTunes software again this week.

Here are a few of the basic links:

And here’s Amazon’s press release from this morning on these new developments, and as you read it, please join me in speculating about how long it will be before Amazon releases a Kindle-branded Android tablet with access, through the cloud, to ebooks, music, audiobooks, movies and television programming, apps, games, and more:

Introducing Amazon Cloud Drive, Amazon Cloud Player for Web, and Amazon Cloud Player for Android

Buy anywhere, play anywhere and keep all your music in one place

Start with 5 GB of free Cloud Drive storageupgrade to 20 GB free with purchase of any MP3 album

SEATTLE, Mar 29, 2011 (BUSINESS WIRE) —

Amazon.com, Inc. (NASDAQ:AMZN) today announced the launch of Amazon Cloud Drive (www.amazon.com/clouddrive), Amazon Cloud Player for Web (www.amazon.com/cloudplayer) and Amazon Cloud Player for Android (www.amazon.com/cloudplayerandroid). Together, these services enable customers to securely store music in the cloudand play it on any Android phone, Android tablet, Mac or PC, wherever they are. Customers can easily upload their music library to Amazon Cloud Drive and can save any new Amazon MP3 purchases directly to their Amazon Cloud Drive for free.

“We’re excited to take this leap forward in the digital experience,” said Bill Carr, vice president of Movies and Music at Amazon. “The launch of Cloud Drive, Cloud Player for Web and Cloud Player for Android eliminates the need for constant software updates as well as the use of thumb drives and cables to move and manage music.”

“Our customers have told us they don’t want to download music to their work computers or phones because they find it hard to move music around to different devices,” Carr said. “Now, whether at work, home, or on the go, customers can buy music from Amazon MP3, store it in the cloud and play it anywhere.”

Store Music for Free

Customers automatically start with 5 GB of Cloud Drive storage to upload their digital music library, and those who purchase an Amazon MP3 album will be upgraded to 20 GB of Cloud Drive space. New Amazon MP3 purchases saved directly to Cloud Drive are stored for free and do not count against a customer’s storage quota.

Adding Music to Cloud Drive

Amazon’s easy uploading process makes it simple for customers to save their music library to their Cloud Drive. Files can be stored in AAC or MP3 formats and will be uploaded to Cloud Drive in the original bit rate. Customers can hand-pick particular songs, artists, albums or playlists to upload or simply upload their entire music library.

Cloud Player for Web

Customers who have a computer with a Web browser can listen to their music. Cloud Player for Web currently supports Internet Explorer, Firefox, Safari for Mac, and Chrome. Cloud Player for Web lets customers easily manage their music with download and streaming options. Customers don’t need to worry about regularly updating software on their computer to enjoy music, and Amazon MP3 customers can continue to use iTunes and Windows Media Player to add their music to their iPods and MP3 players.

Cloud Player for Android

Cloud Player for Android is now bundled into the new version of the Amazon MP3 App; it includes the full Amazon MP3 Store and the mobile version of Cloud Player. Customers can use the app to play music stored on their Cloud Drive and music stored locally on their device. Features include the ability to search and browse by artist, album or song, create playlists and download music from Cloud Drive.

Secure Storage

Customers never need to worry about losing their music collection to a hard drive crash again. Files are securely stored on Amazon Simple Storage Service (Amazon S3) and each file is uploaded to Cloud Drive in its original bit rate. Customers can buy music anywhere and know that their MP3s are safely stored in Cloud Drive and accessible from any device.

Store More than Music

Cloud Drive allows customers to upload and store all kinds of digital files; music, photos, videos and documents can be stored securely and are available via web browser on any computer. In addition to the 5 GB of free storage, customers can purchase storage plans starting at $20 a year for 20 GB.

Cloud Drive Cloud Player for Web Cloud Player for Android
Cost -5 GB: Free-20 GB: Free for one year with purchase of MP3 album 

-Additional storage plans starting at $20 a year

-Free -Free
Storage -Digital Music-Videos 

-Photos

-Documents

-N/A -N/A
Format -Music: Any type of file-Video: Any type of file 

-Pictures: Any type of file

-Documents: Any type of file

-Music: MP3, AAC -Music: MP3, AAC
CompatibleDevices -Macs 

-PCs

-Android Phones-Android Tablets 

-Macs

-PCs

-Android Phones-Android Tablets
Audio Quality -N/A -Original bit rate of your music file -Original bit rate of your music file
Basic Features -Upload, download, move, copy, delete, rename. -Upload, download, playback, playlist management -Upload, download, playback, playlist management

Kindling the Googlezon Future

1.5 million books in your pocket

Most people on the outside of Google, Apple, and Amazon see them as competitors, and of course they are. But their status as partners — constantly connecting the dots of hardware, content, and network to maximize usefulness as well as revenue — is far more important, and it is at that nexus that future revolutions in reading and knowledge and publishing will be ignited, or kindled.

On the Kindle 2.0 – Just to summarize….

Two days before Amazon’s big Kindle press conference on Monday in New York, and here is a quick summary to put things in perspective:

* If you have already placed an order for the Kindle, you will be at the head of the line for the updated version that will ship in February. If you select 1-day delivery ($3.99 with Amazon Prime), you will probably receive your Kindle between February 12 and February 25, but a slight further delay is possible for most recent orders because Amazon will probably be shipping over a quarter of a million Kindles this month. (During the past 24 hours Amazon has updated my projected receipt date to February 25, from a window that began on March 4).

* It looks increasingly like the “switch” from the backordered “Kindle 1” to the ready-to-ship “Kindle 2” will be seamless, with no price change, no change in ASIN, and possibly even no designation of model “1” or “2.” I had earlier reported my expectation of a 10 per cent price increase, but I will be happy to concede error on that one as Amazon figured out that it could make the entire “switch” more seamless if it did not have to get permission for an additional charge on the hundreds of thousands of Kindle backorders in the pipeline.

* While the primary focus for gadget heads may be form factor enhancements highlighted in the “leaked” pictures of the updated Kindle that have been showing up since October, those of us who actually own the Kindle will be more interested in software enhancements, such as content management folders, which will be rolled out Monday and transmitted wirelessly to all Kindles in the field over the course of this month in the form of a firmware version update.

* The most important Kindle “announcement” of February 2009 will probably turn out to have been a staffer’s tip that Amazon is “working on” apps that will allow users of devices such as the iPhone, the iPod Touch, and the Blackberry to buy books and other content instantly from the Kindle store.

* Before the end of 2009, the most important known Kindle metric will be the number of Kindle Store app downloads from Apple’s Apps Store. Say that three times fast.

Let’s plan to be in touch on Monday if you have a minute….