Sombra Alara wasn’t who I was, she was who I was supposed to be. The name meant either “ruler of all shadows” or “shadow ruler of all.” Take your pick; it was just a name. As Scorpio, I changed names and appearances as easily as I changed clothes. The only constant was the stylized butterfly I painted on my face before hiding it behind an illusion. After all, Sombra Alara, my cover identity for this assignment, wasn’t Scorpio.

I stepped out of the bathroom and into the entryway where the cool night breeze rustled my damp hair and tickled my nose with the smell of ozone and this rich masculine scent. Whoever else was in my hotel room with me had to be good. I hadn’t even heard him come in.

Instinctively, I reached for the silkwire bands that should’ve been around my fingers, but I had taken them off before my shower. Of course I wasn’t defenseless; I was Scorpio. I listened to the intruder’s steady breathing to pinpoint his location.

Hiding amongst the shadows, I slipped into the darkened bedroom and came up behind him. As I slid my hand under his black hair and reached around for his chin to snap his neck, he elbowed me in the gut. 

I lurched forward, right into his awaiting fist. Turning my head at the last second deflected most of his power. Still, it was a good hit. I’d say I could feel the bruise forming around my left eye and down that side of my face, but I had too much adrenaline pumping through my system for that.

So, that’s how you’re gonna be, huh? I grinned. This should be fun.

The intruder spun to face me. His breath caught, as did mine. Our eyes met, assessing the opposition. A black mask covered the lower half of his face. What the hell was another Scorpio doing here? Was he here to terminate me?

For a Scorpio sneaking about in other people’s rooms, he was not what I expected. Instead of the form-fitting black Scorpio suit, he wore black cargo pants and a button up white shirt with the top two buttons undone and the sleeves rolled up. Still, he had to be hot. I was, and I was wearing shorts and a camisole. His spiky black hair proofed out in an attractive way. And I was quite certain it rose another degree or two in there.

Scorpio or not, I wasn’t going down without a fight.

Without breaking eye contact, I punched. He blocked. Punched. I blocked, grabbed his forearm, and pulled him into a roundkick. Followed by the edge of my hand to the back of his neck. He wasn’t out yet, but neither did her break out of my hold.

I was about to smash my knee I into his face when he shifted his weight forward and tripped us. He might be strong for a human, but I was a Fox. That gave me just enough strength to overpower him. I rolled over, straddled him. As I pulled my fist back to punch again, he lowered his mask.

He’s not Scorpio? Then who the hell does he work for? How the hell did he find me?

No one even knew where I was, except Scorpio. But there was no getting around the subcutaneous microchip between my shoulder blades, compliments of the Scorpio school system. Not unless I wanted to jam its signal, causing them to be more suspicious of my behavior, or cut the chip out, which was a personal fuck you to the Scorpio Lord himself. When we were trained to disguise ourselves so well, not even our families or loved ones could identify us, Scorpio needed a way to keep track of us.

Yet somehow this masked non-Scorpio had found me. Which meant he was skilled enough to hack the Scorpio database. Or knew someone that was.

Fuck.

Related posts:

1. First Page: Instinct, a Paranormal Romance
2. First Page: The Feral Queen, genre Science Fiction
3. First Page: First page from YA paranormal Balancer

It’s hard to find good GLBT movies without some guidance as to what’s worth it and what’s dreck. As such, I often go with average ratings at sites like Netflix and IMDB. “2 Girls in Love” is a movie that has overall average ratings (which is still better than some of the 2 star ones other films have) so that’s why I picked it to try.

Randy Dean (Laurel Holloman) is a tomboy who works part time at her aunt’s gas station and day dreams through school – which she hates. One day bookish, popular Evie Roy (Nicole Ari Parker) stops there and the two girls meet. Soon they’re beginning to explore their growing feelings for each other but lots of issues – their sexuality, their difference in social standing at school and their families – still stand in their way. Will they persevere in spite of all that?

This is an early film for both lead actresses and it shows. It’s also an early, indie, low budget film for the director and it shows. Sometimes this works to the advantage of the film. The story is about two teenagers finding and exploring love and I’m sure we can all remember how awkward that was. The shyness and nervousness both girls show might be acting but I think it’s a combo of that plus themselves. However that’s what they’re supposed to show and they do in a believable manner. During other scenes though, they tend to either over or under act leading to frenetic moments and stiff, dragging ones.

Writer/Director Maria Maggenti has said that she based the character of Evie on herself and the relationships of the film on those of her first one. As such most of the movie works well in the progression of the love story. But towards the end, the relationship and the fall out from it are already covered so… then what? We’re given a frantic dash to the finish that’s something out of a “madcap” 60s film where the entire cast has to go spontaneously crazy and all race around before winding up together in an ending that just sort of peters out.

What I do like about Maggenti’s directing are some short cuts and make do’s that she used in order to save money. There aren’t a lot of secondary characters so the film focuses more on the relationship between the girls. She also does some interesting stationary shots such as when calm Evie has dinner at Randy’s house and the usual chaotic environment is shown by a focus on wide eyed Evie with the other characters – all talking at the same time – quickly passing back and forth before her and in and out of the shot. If you watch with the director’s commentary, Maggenti is open about all the things that worked and all the goofs and wished for do-overs of a first time film maker.

As for the secondary characters – some work better for me than others. There are three interchangeable friends Evie has whose main function is to work as the social cost and consequence she has to pay for her relationship with Randy. Randy’s lesbian aunt, the aunt’s lover and former lover – both of whom have very similar hair which the director said is something she’s noticed about her own relationships – charge through scenes but aren’t really given that much to do individually. Evie’s uptight mother has a marvelous hysteria scene after she discovers what Evie’s been up to and with whom.

And then there’s Randy’s GBF played by then drag queen Nelson Rodriquez who died shortly after from AIDS. I liked that he was flamboyant but not limited to talking about clothes and interior design. Instead he chides Randy about her math studies and has a funny turn in the above mentioned final chaos of the movie. My favorite, though, is gas station worker Regina who is played by Dale Dickey – Patty the day time hooker on “My Name is Earl.” God I love this actress.

Since it’s basically a YA story, I like that it ends more HFN than HEA. It’s got some sweet moments and a few funny ones. It works as not only as a GLBT film – about both coming out and being out – but also touches on YA themes – about young love and the pressures of social classes. For me the film is good but not great. I’d love to see what it would have been like with a little more money and some more experience under the director’s belt. C+

~Jayne

No related posts.

Here’s some food for thought. McKenzie Walton tweeted this the other day “One of my least favorite terms is ‘shit-eating grin’. Like, I don’t even know what that means. That’s GROSS.”

My god, she is so right.

In lieu of book news, here are some random links that might interest you:

Nick Denton: The Banner Ad Era is Closing | Digiday – ““We all know the conventional wisdom: the days of the banner advertisement are numbered,” Denton wrote in an email to Gawker staff. “In two years, our primary offering to marketers will be our discussion platform.” Gawker recently revamped its commenting system in a way that Denton hopes will improve the quality of conversation on the site. He also hopes to find ways for advertisers to participate, noting in an email that “in a couple of years I could see “discussion management” being more important than traditional online advertising.””  DigiDay  Personal Note:There was another article that talked about how Gawker’s new commenting system would work in that the originator of a thread could control the types of comments people saw, thus shaping the conversation. I find that quite disturbing.

Astor+Blue | Digital Publisher, Classic Publishing – “We are an innovative “Digital First” Publisher dedicated to producing the highest quality ebooks and custom print editions by leveraging the latest in Digital Technology and New Media. We curate a list of well-written books by authors of diverse voices, and devote ourselves to actively helping readers from around the globe discover – and rediscover – those voices. Through the “Digital First” platform, A+B does not merely publish books, we E-LAUNCH them through a highly specialized, long term, proactive marketing program. We strive to be a destination for where to find ebooks, and where ebooks will “find their readers” as well. In short: We maximize each title’s readership and keep it alive indefinitely. This is our mission.” This is not a romance digital publisher but a literary fiction one. I’m not certain it would be of interest to the readers here. Astor + Blue

BuzzFeed Animals – A whole category devoted to listings of cute animal pictures. BuzzFeed

As for deals, here is a good one for you:

• The Forever Instinct by Barbara Delinksy * $2.99 * A | BN | K | S
• First Things First by Barbara Delinksy * $2.99 * A | BN | K | S
• The Scent of Jasmine by Barbara Delinksy * $2.99 * A | BN | K | S
• Straight from the Heart by Barbara Delinksy * $2.99 * A | BN | K | S
• This Heart of Mine with Bonus Content by Susan Elizabeth Phillips * $1.99 * A | BN | K | S

Related posts:

1. Thursday Midday Links: Apple’s iBookstore Pricing Is $9.99 too
2. Thursday Midday Links: Bad IP Suits and Good Deals
3. Thursday Midday Links: I Worry About Apple’s Propensity for Censorship, Do You?

Personal Note: One of the things Say Books created was a serialized ebook using the PressBooks platform. The PressBooks platform is a wordpress based publishing site that creates ebooks out of blog posts. I asked SayBooks about their product:

We were pleasantly surprised at the response to the subscription model, and even though the chapters are now all up and we are about to release the ebook, we are still getting subscribers every couple of days. … All but a handful of the subscribers ‘donated’ $5 or more (people who donate more than $5 get the ebook at the end too), and a significant number were for more than $5; (one person donated $0.01c!:)). The actual ebook will sell for $4.99. It is still early days and too early to make any judgements.about a long term business model. However, I am convinced that using the potential of the web as a discovery and delivery method for the content, not just for the product, is the way book publishing needs to go. We will continue to publish novels in this way, with an ebook available at the end too.

unglue.it – “unglue (v. t.) 4. For an author or publisher, to accept a fixed amount of money from the public for its unlimited use of an ebook.” Personal Note:  A sort of patronage system. interesting.

Government Signs Deal With Barnes & Noble to Sell E-Books | Digital Book World – “Government Printing Office (GPO) has signed an agreement with Barnes & Noble to sell Federal eBooks. Titles are available in eBook format for Barnes & Noble’s Nook eReader. GPO works with Federal agencies to produce their publications, books, and reports in print and digital formats, including eBook formats. Approximately 30 eBook titles are available including popular titles like the Public Papers of the President-Barack Obama, Deep Water: The Gulf Oil Disaster And The Future Of Offshore Drilling (the BP Oil Spill Commission Report), the Financial Crisis Inquiry Report, and the newly released Basic Guide to Exporting from the Department of Commerce. GPO makes eBooks available in partnership with Google’s eBookstore, OverDrive, Ingram, Zinio, and other online vendors.” DBW

Amazon Beefs up Prime Offering | Digital Book World – “Amazon.com, Inc. today announced a licensing agreement with Paramount Pictures that brings hundreds of new hit movies to Prime Instant Video in the U.S. over the next three years. Prime Instant Video now offers customers more than 17,000 movies and TV episodes to enjoy …This deal will bring Prime Instant Video customers hundreds of new movies to enjoy on their Kindle Fire or any device connected to Amazon Instant Video, including titles such as Star Trek, Breakfast at Tiffany’s, Top Gun, The Italian Job and The Truman Show, and we will remain committed to adding even more great movies and TV shows to Prime Instant Video in the future.”” DBW

• All the Pretty Girls by J.T. Ellison * $1.99 * A | BN | K | S  (reviewed here.  I enjoyed the first one but stopped reading after about the third book)
• 14 by J.T. Ellison * $1.99 * A | BN | K | S
• Judas Kiss by J.T. Ellison * $2.99 * A | BN | K | S

Related posts:

1. Avon Romances Adds Video to Ebooks and Original Content from Bestselling Authors
2. Wednesday Midday Links: Amazon Ups the Ante
3. Wednesday Midday News: Update on the Agony/Ecstasy Anthology

Name of debut release: Coveted

Release date: 04/24/2012

Publisher: Ballantine Books

2 sentence summary: Natalya Stravinsky, a werewolf with an undeniable compulsion to collect holiday trinkets, must summon her inner strength to help defend her estranged pack against their rivals and prove herself worthy of her pack. Toss in a handsome wizard vying for her affection, the man she loved and lost five years ago, a therapy group for the anxious and enchanted, and the South Toms River pack leader ready to throw her to the wolves, and an adventure of redemption is waiting to happen.

Genre: Paranormal Romance

Characters: Natalya Stravinsky, Thorn Grantham, Nick Fenton

What makes this story different: Coveted is more of a romantic comedy. It’s about a woman determined to change her life and fight for what she’d once lost. Of course, a few laughs, a cast of colorful secondary characters, and some supernatural creature group therapy along the way never hurts either.

Is this a series?: Yes, this is the first book in the series with the next one coming out in the fall.

Why you wrote this book: The idea for this book came from an article in a medical journal. The article on the front page was about obsessive compulsive disorders and went in-depth on describing the symptoms and treatment for patients. A huge what-if jumped out to me and Natalya the werewolf was born—a holiday trinket hoarder with OCD.

I really wanted Natalya to feel relatable and be real. The pain of feeling alone without family—or a pack in her case—is something many people face today. Especially when the secrets you keep in your home is something that ostracizes you from others. I could easily relate to Nat’s situation and this really helped bring the story to life.

Why is this your first published book? How many did you write before? I’ve written two books before this particular book sold to Random House. Both of them were paranormal romances. I think out of the three heroines I’ve developed so far, Nat “feels” the most vivid and real in my mind.

What’s your writing process? I’m not an everyday writer. It took me a while to figure that out and now I’m comfortable with my process. For me, my words sit in a well waiting to be tapped in a well—and sometimes that well can run dry unless I give it time to refill. When I do write, I do it in sprints using Dr. Wicked’s Write or Die or I’ll just write directly in Scrivener. I’ll take a break for a day or even a week, but when it’s time to work, I will knock out 5-10K per day for a period of time when I’m in the zone.

Your next published book. The next book in the Coveted series is Kept, which will come out in Fall/Winter 2012. I can’t wait to reveal the new cover to everyone.

The last book you read that you loved. The last book that I read and still think about often was Ready Player One by Ernest Cline. It’s an 80s nerdfest of epic proportions. The book was very original and brought back a lot of great memories about the music and technology of that decade.

Now if I was thinking in terms of romance books, I’d have to say hands down that I fell in love with Jeaniene Frost’s Night Huntress series. I started the series through audiobooks, since I’m a very slow reader, but each time I came back to listen to the next book, I can’t help but sigh thinking about Bones. Frost is a master storyteller and I can’t wait to finish the one I’m listening to right now.

The last book you read for research. I read Debra Dixon’s Goal, Motivation, Conflict before I write new material. Each and every time. Her book helps me take a raw idea and focus it into something useful. I recommend that book to everyone and I even made a tool on my author website to create GMC grids.

The romance book character you most identify with. . This one is hard. There are many books where the heroine resonated with me, but I think the character I’ll never forget is Cherijo Grey Veil from the StarDoc series by S.L. Viehl. From the get go, Cherijo looks like any other woman. She’s not the strongest or even the tallest—but through her wit and her intelligence she gets out of the most dire and difficult situations. The saying, “Don’t judge a book by the cover” definitely applies in her regard. And that’s one of the things makes her very powerful. I can only hope that when I’m facing problems I can come them just like Cherijo has in those wonderful books.

You can check out more about Shawntelle Madison and her books at http://shawntellemadison.com

AmazonBNSonyKobo]

Related posts:

1. Debut Print Book: Don’t Let Me Go by J.H.Trumble
2. Debut Print Book: Under the Same Sky by Genevieve Graham
3. Debut Print Book: The Wedding Beat by Devan Sipher

****

JF: To celebrate this month’s release of the first book, MIDNIGHT RESCUE, Elle and I are thrilled to be here answering questions about the book’s journey to publication. It’s been almost exactly a year since I acquired three books in a new romantic suspense series by Elle Kennedy for Signet Eclipse (part of Penguin).

Editors say this all the time, but I devoured this submission in one sitting. The heroine’s strength, emotionally and physically, hooked me within ten pages (in revisions, we dropped the prologue to emphasize her strength even more). This was not a romantic suspense where an alpha male swoops in to rescue the heroine; this was a book where the hero and heroine rescue each other.

Although I was excited about the potential of this series and author, the practical side of my brain knew this could be an uphill fight to acquisition. We were seeing very little romantic suspense published at the time—the popularity of sweet, small town contemporaries was really on the rise. MIDNIGHT RESCUE was actually almost the complete opposite of what I thought I was looking to acquire. But I fell in love with the manuscript’s darkness – and also how the romance and banter and friendships balance it out beautifully.

EK: For me, I knew the series would be a tough sell, but my agent and I thought it was worth it to put MIDNIGHT RESCUE in front of some editors to see what the response would be.  We received a several passes on the submission, most editors admitting they loved the book, but it was too dark for their list.  Either that, or the market for romantic suspense wasn’t as “in demand” as paranormal or sweet contemporaries. 

 So I was absolutely thrilled when Jesse acquired the book because of that darkness, and took a chance on a RS manuscript.

JF: Elle’s agent set up a phone call between us. I was hoping to get a sense of how well we could work together on revisions (whether my suggestions resonated with her), how eager Elle was to promote herself, and how active she was online (I’d also investigated this before the call – prepare to be googled, authors. Have a presence online already).

EK: I loved that initial call with Jesse.  Her enthusiasm about the story got me even more enthusiastic about it.  And her thoughts about promotion were eye opening.  At that point, I had somewhat of an online presence, but I realized I needed to do a lot more in terms of putting myself out there.

JF: Elle and I had a great talk, I loved the submission, and everyone who second read in my department agreed. Then we ran numbers and I made an offer for three books in the series.

EK: Best day ever? My agent calling with the news that Signet Eclipse made an offer.  I’m pretty sure I let out a girlish shriek—and people who know me well know that I’m super subdued and rarely girlishly shriek.

I’ve been asked why I chose to go the traditional route rather than self publish digitally or go with a strictly digital publisher, which a lot of authors are doing these days.  It all boils down to that childhood dream of wanting to see my name on the cover of a book, hold that book in my hands, flip through the pages, see it on actual shelves in an actual bookstore.  Bookstores are my favourite places on earth.  I read a lot of ebooks, of course, but for me, I just love having that hard copy of a story in my hands.  So I was so thrilled when Jesse called saying she wanted to publish MIDNIGHT RESCUE.

JF: Now the real fun began: edits! I read the manuscript several times before shooting an editorial letter and line edited manuscript off to Elle. We had a phone call a few days later. Elle jumped right into revisions with enthusiasm. I remember getting emails throughout the month like, “What if I add a dog?” (Authors: there’s ALWAYS room for a dog.)

I sent Elle four pages of notes, as well as a marked up manuscript file, for the first round of broad revisions. This is pretty average length of notes for me, plus or minus a few pages. As I mentioned above, we reworked the structure of the book a little bit, incorporating the prologue more into the story and streamlining character POVs. I also discussed with Elle how the hero and heroine weren’t as active in the climactic suspense plot as I’d hoped they would be. Both characters are strong and capable, but originally they were kept out of planning the rescue mission that is the focus of the book. During a brainstorming session on the phone, Elle came up with a twist that really pulls everything together at the end.

Elle and I had a lot of conversations about how to really be sure that Abby is completely empowered and active throughout the story, even as she learns that she needs to trust her teammates and the hero. This carries over to her sex scenes with the hero, where Elle really amped up Abby taking control of her sexuality, which I love and is an important part of her character’s growth. We also talked through different scenarios for ending the book that allowed Abby to not sacrifice any of her values (or skill set) in order to be with the hero romantically.

EK: I have a love/hate relationship with revisions.  It’s so incredibly difficult cutting or changing parts of a book that you worked on for so long and which has become a part of you.  But I’m lucky to have some wonderful editors who are able to look at that book objectively and tell me what it’ll take to make it even better.  Jesse is no exception.  Every single one of her suggestions made perfect sense to me, so making certain changes was no hardship.

Oh, and fun fact: I added my dog into the book.  Bear, the German shepherd mutt who belongs to one of my mercenaries, is actually my super awesome mutt.

JF: We also started brainstorming series names and cover concepts around this time. We look at what’s popular right now, and think about how to make the book stand out on shelves. This is Abby’s story, so we decided to take a little departure from traditional romantic suspense covers by depicting her alone on the cover. The difficulty was not making her seem like an urban fantasy heroine. As you can see, the designer did an amazing job.

EK:  I love, love, love this cover! When it showed up in my inbox, I was actually speechless (again, not characteristic—sadly, I am a babbler).  I couldn’t believe how fierce the heroine looked, and the colors were absolutely stunning.  After seeing the cover for MIDNIGHT RESCUE, I had no idea how the art department could possibly top it for Book 2.

JF: The art department actually is working on the cover for book #2, MIDNIGHT ALIAS, now. Sometimes photos of potential male cover models appear in my inbox. Designing covers is fun.

EK: Once the book had a cover, it felt even more “real” to me.  And around this time, Jesse had read the revisions and approved them, so the book was moving along on its journey to publication.

JF: We had done two rounds of revisions before turning it over to managing editorial for copyediting. When you’ve read something five or six times and it still resonates with you emotionally, you know it’s a gem!

EK: For me, once the book has been copy-edited, I start to freak out.  Because at this point, I can’t really make any more changes—and what if I suddenly decide that something needs to change?!  Standing by and letting the book get immortalized in print/digital form is like waving goodbye to your kids when they go to college.  You’ve got to let them stand on their own now, no matter how scary that is.

JF: Elle turned in revisions for book #2 in the series (out next Feb) and the outline for book #3 this month. And this whole cycle begins again!

We’re giving away 5 copies of MIDNIGHT RESCUE: A Killer Instincts Novel to randomly selected comments below. Leave a question or comment for Elle or myself—do you have a question about the editorial process we didn’t cover? We’ll try to reply and maybe you’ll win a book!

Visit Elle’s website for more information on MIDNIGHT RESCUE.

Related posts:

1. Hoo Rah: A Giveway for the Troops
2. Book Pimp Post #3
3. Book Pimp Post #4

I’ve talked to several readers about the price fixing lawsuit and people have a lot of questions.  I thought I could provide a few answers here to help clarify matters.  If you have a question, drop a line in the comments.

1.  What are the lawsuits and who do they involve?

There are three lawsuits in the United States alleging that five of the big six publishers (Hachette, HarperCollins, Macmillan, Simon&Schuster and Penguin) colluded with Apple to raise ebook prices.  Those three lawsuits are as follows:

• Department of Justice (a federal lawsuit)
• 31 States’ Attorney Generals
• Private class action suit

There are also investigations taking place in Canada, Australia, and the EU.

2.  What are the suits about?

All three of the U.S. lawsuits are essentially the same.  The suits allege (or accuse) that Hachette, HarperCollins, Macmillan, Simon&Schuster and Penguin conspired or colluded with Apple to raise the ebook prices from the price level that ebooks were at leading up to January 2010 which was primarily $9.99 for Bestsellers and under.

What we know from the documentary evidence (or evidence that is supported by emails, notes, memos or telephone records) is that executives of the five publishers communicated with each other about two things:

• windowing ebooks (windowing means holding back the sale of an ebook for a period of time after the paper book is released)
• moving to a retail price maintenance model (or “Agency” as it is commonly known) that guaranteed the price would be the same at Apple as it would be anywhere else and that Apple would get a 30% commission from all digital books sold through Apple’s store.

3.  You’ve made a big deal about “per se”.  What does that mean?

Shorter answer: It is much harder for a defendant to win a per se case and much easier for the plaintiffs.  Accusations that Amazon made them do it won’t be permitted in a per se case.

Long answer: Per se is a legal standard.  Accusations of antitrust violations are measured against one of two standards: either “per se” or “rule of reason”.

Per Se:  A per se violation is “conclusively presumed illegal.” Under this standard, business justifications or social benefits are not considered and the Defendant Publishers would not be allowed to offer proof to justify their actions such as arguing that Amazon was going to destroy publishing. Under a “per se” standard, Amazon and their actions are completely unimportant.  The Supreme Court in United States v. Socony- Vacuum Oil Co., 310 U.S. 150, 221, 222 (1940). said the following:

The elimination of so-called competitive evils is no legal justification for such buying programs. The elimination of such conditions was sought primarily for its effect on the price structures. Fairer competitive prices, it is claimed, resulted when distress gasoline was removed from the market. But such defense is typical of the protestations usually made in price-fixing cases. Ruinous competition, financial disaster, evils of price-cutting, and the like appear throughout our history as ostensible justifications for price-fixing. If the so-called competitive abuses were to be appraised here, the reasonableness of prices would necessarily become an issue in every price-fixing case. In that event, the Sherman Act would soon be emasculated; its philosophy would be supplanted by one which is wholly alien to a system of free competition; it would not be the charter of freedom which its framers intended.

The reasonableness of prices has no constancy due to the dynamic quality of the business facts underlying price structures. Those who fixed reasonable prices today would perpetuate unreasonable prices tomorrow, since those prices would not be subject to continuous administrative supervision and readjustment in light of changed conditions. Those who controlled the prices would control or effectively dominate the market. And those who were in that strategic position would have it in their power to destroy or drastically impair the competitive system. But the thrust of the rule is deeper, and reaches more than monopoly power. Any combination which tampers with price structures is engaged in an unlawful activity. Even though the members of the price-fixing group were in no position to control the market, to the extent that they raised, lowered, or stabilized prices, they would be directly interfering with the free play of market forces. The Act places all such schemes beyond the pale, and protects that vital part of our economy against any degree of interference. Congress has not left with us the determination of whether or not particular price-fixing schemes are wise or unwise, healthy or destructive. It has not permitted the age-old cry of ruinous competition and competitive evils to be a defense to price-fixing conspiracies. It has no more allowed genuine or fancied competitive abuses as a legal justification for such schemes than it has the good intentions of the members of the combination

Rule of Reason:  Under the rule of reason, the accusing parties (the states, DOJ, class action plaintiffs) would have to prove that the price movements made by the Defendant Publishers were not reasonable and the Defendant Publishers and Apple could offer proof that would justify their actions.  In  Clorox Co. v. Sterling Winthrop, Inc. (2nd Cir. 1997), the 2nd Circuit defined the rule of reason standard in this fashion:

First, the “`[p]laintiff bears the initial burden of showing that the challenged action has had an actual adverse effect on competition as a whole in the relevant market….’” Id. (quoting Capital Imaging, 996 F.2d at 543). Then, “[i]f the plaintiff succeeds, the burden shifts to the defendant to establish the `pro-competitive “redeeming virtues”‘ of the action. Should the defendant carry this burden, the plaintiff must then show that the same pro-competitive effect could be achieved through an alternative means that is less restrictive of competition.” Id. (internal citations omitted) (quoting Capital Imaging, 996 F.2d at 543; Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1413 (9th Cir.1991)). Ultimately, the goal is to determine whether restrictions in an agreement among competitors potentially harm consumers. See SCFC ILC, Inc. v. Visa USA, Inc., 36 F.3d 958, 965 (10th Cir. 1994). The focus of the inquiry on consumers “cannot be overemphasized and is especially essential when a successful competitor,” as here, “alleges antitrust injury at the hands of a rival.” Id.

(Note there is also an inherently suspect standard that can be applied as well but I’m going to skip that for purposes of brevity and coherence)

4.  Why can’t the publishers set their own prices like other manufacturers of goods like shoes or perfume or computers?

Publishers can set their own prices. In this circumstance, however, the publishers didn’t just set and maintain certain prices.  They got together and made sure all their publisher friends were going to do it as well because they knew (according to the allegations) that they couldn’t afford to engage in Retail Price Maintenance if only one of them was going to do it.

It used to be that Retail Price Maintenance (RPM) which is a manufacturer setting the price at which a good could be sold was not permissible except under certain circumstances such as when the seller was an agent or pass through of the owner.  The best example of this is a real estate broker and a home owner.  The home owner sets the price and the real estate agent helps to broker the deal but the real estate agent acts as the agent of the home owner.  The agent can’t change the price of the house without the permission of the owner.

Under those scenarios, an owner or manufacturer of a good could set the price of a good.  In 2007, the U.S. Supreme Court loosened the rules on RPM and basically said that if there is a good business justification, then a manufacturer or producer of a good could set their own price.  In the decision of Judge Cote to deny the Defendant Publishers and Apple’s move to get rid of the lawsuit, she references that RPM can be used.  In the settlement proposal for the DOJ, RPM is allowed under certain circumstances.

Those circumstances include allowing retailers to pass on their commission (whatever is negotiated between the publisher and the retailer like Amazon) to the consumers in the form of a discount.

5.  Isn’t Amazon a monopoly? Why is that okay?

Not all monopolies are illegal. (See the Primer) It isn’t even illegal to acquire a monopoly.  There were ebooks before Amazon, but it wasn’t until Amazon introduced the Kindle and its one click buy feature from the device itself that ebooks began taking off.  Amazon released the Kindle First Generation on November 19, 2007.  From 2008 to 2010, ebook sales grew from .6 % to 6.4% of the overall book market. (Source: AAP) Amazon had 80-90% of the ebook market at the beginning of 2010. Nook entered the market on November 22, 2009, Apple with iBooks announced on January 2010, and Kobo in July 2010.  Currently the ebook market for trade fiction sales varies from publisher to publisher but is around mid 20% to 30%.

6.  Didn’t Amazon acquire its monopoly through predatory pricing?

In 2010, when the publishers and Apple allegedly colluded to fix price, Amazon controlled 80-90% of 6.4% of the overall book market according to the statistics of the American Association of Publishers.  While Amazon did sell some of its ebooks at a loss leader price of $9.99, the Kindle was one of two dedicated devices marketed to the US readers and widely available in the US. (Sony’s reader actually predated Amazon).  In other words, no one was competing against Amazon from 2007 to 2010 except for Sony.

There were other ebook retailers, but none that sold a dedicated reading device and none that allowed on device purchasing and delivery of ebooks over a cellular connection.  Amazon would have evidence that it provided a product and service in the ebook market that was technologically advanced at the time.

Nonetheless, let’s talk about predatory pricing for a minute. Predatory pricing (a Section 2 violation of the Sherman Act)  is considered anticompetitive and a violation of antitrust.  However, it is very difficult to prove.  Predatory pricing requires proof that the seller deliberately undercut its competitors to drive those competitors out of business.

In Brooke Group v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993), the Supreme court established the following test:

Accordingly, whether the claim alleges predatory pricing under § 2 of the Sherman Act or primary-line price discrimination under the Robinson-Patman Act, two prerequisites to recovery remain the same. First, a plaintiff seeking to establish competitive injury resulting from a rival’s low prices must prove that the prices complained of are below an appropriate measure of its rival’s costs.

The second prerequisite … is a demonstration that the competitor had a reasonable prospect, or, under § 2 of the Sherman Act, a dangerous probability, of recouping its investment in below-cost prices. …  Recoupment is the ultimate object of an unlawful predatory pricing scheme; it is the means by which a predator profits from predation. Without it, predatory pricing produces lower aggregate prices in the market, and consumer welfare is enhanced. Although unsuccessful predatory pricing may encourage some inefficient substitution toward the product being sold at less than its cost, unsuccessful predation is in general a boon to consumers.

The court goes on to say:

That below-cost pricing may impose painful losses on its target is of no moment to the antitrust laws if competition is not injured: It is axiomatic that the antitrust laws were passed for “the protection of competition, not competitors.”

and

If circumstances indicate that below-cost pricing could likely produce its intended effect on the target, there is still the further question whether it would likely injure competition in the relevant market. The plaintiff must demonstrate that there is a likelihood that the predatory scheme alleged would cause a rise in prices above a competitive level that would be sufficient to compensate for the amounts expended on the predation, including the time value of the money invested in it. As we have observed on a prior occasion, “[i]n order to recoup their losses, [predators] must obtain enough market power to set higher than competitive prices, and then must sustain those prices long enough to earn in excess profits what they earlier gave up in below-cost prices.”

Evidence of below-cost pricing is not alone sufficient to permit an inference of probable recoupment and injury to competition. Determining whether recoupment of predatory losses is likely requires an estimate of the cost of the alleged predation and a close analysis of both the scheme alleged by the plaintiff and the structure and conditions of the relevant market.

It should be noted that when Amazon began its $9.99 pricing scheme, there were only a few competitors in the marketplace: Sony, Fictionwise, Diesel.

6.  Is there any action that can be taken against Barnes & Noble for their alleged actions against Random House?

In the amended complaint of the States’ Attorneys General, there were allegations that Barnes & Noble engaged in two different acts to create and enforce the collusion:

• BN assisted Macmillan in its move to Agency Pricing by moving Macmillan’s products to the top of its merchandising pods and to the front of the Nook recommendation section.
• BN punished Random House for not colluding by not including RH books in any of its advertising.

7.  Will the prices come down? Or what will happen next?

Simon & Schuster, Hachette, and HarperCollins have agreed to settle with the DOJ.  The terms of the settlement would allow retailers to gain control over pricing and include those publishers ebooks in loyalty programs, discount clubs, and straight up discounting.  Amazon has signaled that it will begin discounting once the settlement is approved.  The settlement could be approved as early as August.  The parties have 30 days to comply with the agreement once the settlement is approved.  The earliest prices will likely be reduced is September or October of 2012.

Simon & Schuster has reportedly settled with the States’ Attorneys’ General.  The terms of this settlement is unknown at this time but will be made public.  Based on past reports, it is likely to include cessation of the current control by S&S over pricing along with some kind of rebate to consumers who purchased S&S books from 2010 until the date of the settlement.  Hachette and HarperCollins were reportedly in settlement talks with the states.

If Simon & Schuster, Hachette, and HarperCollins would settle with DOJ and the States’ Attorneys’ General and those settlements would result in some payment to consumers, then it is likely the Class Action suits would be dismissed.

You can read more about what might happen next here.

8.  Will “Agency” pricing still exist?

The DOJ settlement terms allowed for a 2 year cessation of agency agreements except one kind.   The  settlement agreement allows a retailer, like Amazon, to discount books but limits the discount in one year for one publisher to not exceed the retailers aggregate commission.  Assume Amazon signs an agreement with Hachette and Amazon agrees to accept a 30% commission on every book sold.  For one year, the total amount of discounts cannot exceed the total commission Amazon received for that year.  Some of the books could be half off, buy one get one free, or not be discounted at all.  But the total discount cannot exceed total commission.  Assume Amazon sold 100 books for Hachette that were retail priced at $9.99.  The total commission for Amazon would be $299.70.  Thus, the overall discounts Amazon gave to us readers could not exceed $299.70.

I hope this helps to clarify some issues. Please feel free to drop a question in the comments.

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“Katrina, you worthless piece of fucking white-trash bitch.”

The door opened with an echoing bang. The man walking in was as ominous as the black clothes he wore. Tall, dark and extremely handsome, he brought with him an air of fear laced with danger. Anger and rage preceded his words spoken with a sharp piercing accent on his displeasure. Throwing the tabloid he gripped in his hand at the woman standing at the counter cutting vegetables, her wide, violet eyes betrayed her fear. Slender and statuesque, she raised her body to her full height. Long, dark, silky hair flowed over her shoulders, covering her breasts. Keeping her poise, she did not speak to the man’s insults.

Her right hand gripped the large kitchen knife as her left hand picked up her cell phone. Hitting “1” on her speed dial, she sent the call as she backed away from the man.

“So, I read in the rag paper that you have accepted a modeling assignment in Paris, after hearing it from a ‘friend’ that couldn’t wait to rub it in.” The very tone of his voice made her jerk with fear.

“Tomas…” She was still on the move to get as far away from him as she could. “…it just happened this afternoon. I was preparing a fine meal for us to celebrate.” Waving the knife towards the chopped food.

Her first instinct to come home, pack and escape was now looking like the better choice.

Her back hit the wall as he reduced the space between them. With one swift move he backhanded her. The knife and the cell phone flew from her hands as she slid down the wall to the soft white carpet.

The explosion in her head put flashes of light in front of her eyes. The cell phone was within in her reach, the knife was not. Snaking her hand out she tucked the cell phone next to her, careful not to hang up.

Tomas picked up the knife and slammed it on the counter. “I hope I have made my point. Now call that vamp agent of yours and tell her the deal is off. Now.” His command was like another slap across her face.

Lifting herself up slowly, the sting of his abuse still radiating on her skin. “But it’s my job, it’s what I do.” Standing wobbly against the wall trying to clear her head of the pain. “It’s a rich paying job.” Her hand with the phone hung at the side she turned towards the wall.

His sinister laugh told her it was the wrong thing to say. “You have a job. Pleasing me. And you don’t need money. I meet your needs.”

His advancement towards her again made her move away from the wall. “Okay, I’ll call Stella.” She turned towards the bedroom, walking unsteadily.

In the room her bags were packed and ready to go. With the caller still on the phone, she picked up her bag and purse. She had to escape. To get away from this madness.

Wheeling her suitcase behind her, she shook her head again to clear it and went out to face Tomas.

Still behind the counter, his eyes flashed with a more intense fury as he watched her come out of the bedroom with her luggage.
“I see you are not taking me seriously. Do I need to make my point clearer?”

Karina stopped, raised her head and squared her shoulders. “No, you made yourself perfectly clear. I am leaving. You and this toxic relationship. Good bye Tomas.”

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We’re “them.” We’re “they.” We are the Men in Black.

I thought I’d throw another bromance onto the review heap. Not that Agent J and Dr. Laurel Weaver’s flirting isn’t enjoyable but the real strength of this film is how well Tommy Lee Jones and Will Smith play off each other as their characters attempt to save the Earth.

Agent Kay (Tommy Lee Jones) has been helping to save the planet and monitor the aliens who live here for close to 35 years. When his partner reluctantly decides it’s time to retire, Kay and his boss Zed (Rip Torn) begin to test and audition replacements. James Edwards (Will Smith), an NYPD officer, caught Kay’s eye when he unknowingly ran down a cephalapoid while trying to make an arrest. Impressed with Edwards’ stamina and smarts, Kay lures him to the (hilarious) testing where Edwards proves he has what it takes as he thinks outside the box and make correct split second decisions. When he accepts, Edwards becomes J, the newest agent of the MIB.

And just in time as something has the alien population running scared and fleeing the planet. Turning to a major source of their intel, the tabloids, Kay and J interview a woman (Siobhan Fallon) who claims an alien stoled her husband Edgar’s (Vincent D’Onofrio) skin. Kay quickly realizes that a Bug has landed and is running loose in NYC. Heading to the morgue, they discover the M.E. Dr. Laurel Weaver (Linda Fiorentino) has two alien bodies there but the mystery of what the Bug in the Edgar suit wants only deepens. It takes a trip to interrogate Frank the pug to reveal what Kay and J have to find before the Bug does because if they can’t stop him, the Arquillians are going to kill us all.

I love MIB. MIB II not so much and I’m bracing myself for the third installment due out this Spring in the hope that it will rise to the level of this one. But the original movie is hard to top. From the opening credits of a dragonfly flitting through the Universe before ending up as splat on a windshield it’s a pretty much a wild, nonstop ride. There is a bit of boring exposition as Kay fills J in on the history of the MIB and knowledge of aliens on this planet but most of the rest of the running time isn’t wasted. Considering how much the plot was changed as it went along, the final result ends up fairly cohesive. It’s also a beautiful film to look at – the outside NYC scenes show off the beauty of the city while the inside sets are all 1960s space age curves.

The relationship of Kay and J carries the film. Smith and Jones have fabulous chemistry. They totally play off each other with Jones’ straight faced delivery complimenting Smith’s wisecracking facade. But J and Kay aren’t just Super Men with major firepower shown saving the world in a rain of special effects. They’re human. They get busted up, J cares about the effect of Kay’s memory messer-upper on the people who get flashed and he wants the cover stories which replace those peoples’ memories to be nice and – in the case of Edgar’s wife – empowering. Kay regrets the loss of his most recent partner and still loves the woman he had to leave behind all those years ago when he became an agent. You can see the weight of all his memories on his face. Yet, despite the need for them to toil in obscurity, there are the occasional nice moments such as when J helps deliver a bouncing, newborn baby….squid.

Rip Torn as Zed conveys gravitas in the face of the imminent destruction of the planet yet can still slide in a few zingers about the years of government training of the other candidates and how the MIB aren’t hosting an intergalactic kegger. Linda Fiorentino is lovely to look at and her character catches onto the situation quickly. I was delighted when she manages to not only save herself but also provides the final blast needed to rid the world of the Bug. One of my favorite tertiary characters is Beatrice the beaten down wife of Edgar. Fallon manages to make me laugh out loud without saying a word just from the expressions on her face.

But it’s Vincent D’Onofrio’s performance as the Bug which rulz. I can’t imagine how much work he had to put into pulling off the look and mannerisms of having a giant cockroach stuffed into his skin. The loping gait, the awkward way he poses his arms as he sits in the Zap-Em truck, the smash and grab techniques at the jewelry store and sidewalk post-card seller’s stand – even the way he talks…he makes me believe he’s something otherworldly. It’s also hilarious to watch how frustrated and pissed the Bug gets the longer he’s stuck in New York. Even Edgar’s cows don’t give him any respect.

The special effects still hold up fairly well with lots of exploding blue goo and Bug slime everywhere. I still think “the little guy in the big guy’s head” looks a little cheesy but the final sequences with the Bug are good. The “ingrate” worms who loaf around all day at the MIB headquarters are funny and the pug in a “I ♥ NY” T-shirt is cute. One of my favorite funny scenes is the way J discovers exactly what happens when he pushes the red button in the Ford P.O.S. as he and Kay are headed to Queens through the tunnel to the music of Elvis Presley.

The movie is supposed to be fun and breezy light entertainment and succeeds as such. Director Sonnenfeld keeps the story focused and the pace fast as it zips to a conclusion. The commentary tract is also interesting to listen to as he and Jones discuss what went into making the movie and seemingly have a good time remembering the whole process. Are we just an intergalactic Aggie in an alien game of marbles? Who knows? But no one better give me a flashie thing as I’d probably forget to put on my Ray Bans and would end up zapping myself to mental oblivion.

~Jayne

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News

7-inch iPad on track for October 2012 release, $200 to $250 price | iMore – “Apple will be going forward with the 7-inch iPad, currently targeting an October 2012 release alongside the new iPhone, and — here’s the killer — at a $200 to $250 price point. According to our sources, the reason for such aggressive pricing is to do to the tablet market what Apple did to the MP3 market in 2004 with the expansion of the iPod product line — leave absolutely no space for competitors. … We haven’t gotten a firm read on the exact screen dimensions, so we’re using 7-inches generically here. Our sources have indicated, however, that the 7-inch iPad will be identical to the current 9.7-inch iPad, just scaled down. That seems to include a 2048×1536 resolution display, just like the new iPad. If accurate, that would put the pixel density at around 326 ppi, the same as the iPhone 4S (and higher than the 264 ppi new iPad) retina display.”iMore

Amazon aims to launch front-lit Kindle in July: source | Reuters – “Amazon.com Inc will launch new versions of its Kindle e-reader and tablet, including a monochrome e-reader with front lighting, a source who has seen the prototype told Reuters. … The world’s largest Internet retailer is aiming to have the new e-reader in stores in July, said the source, who has direct knowledge of the matter but asked not to be named because Amazon has not yet made the decision public.”Reuters

Only Indie is the world’s first dynamically priced eBook store - The Red Ferret Journal – “One innovative company which seems likely to profit from this explosion in use is Only Indie, a new independent online eBook store which offers a range of digital titles in various genres with one great twist. Every book sold on the site starts off at $0.00 in price. But…and here’s the clever part…after 15 downloads, the price starts rising by 1 penny per purchase until it reaches the set retail price.” RedFerret

This Just In: Skechers agrees to pay $40 Million in refunds – The Sisterhood of the Shrinking Jeans LLC : The Sisterhood of the Shrinking Jeans LLC – “Besides Shape-ups, Skechers also made deceptive claims about its Resistance Runner, Toners, and Tone-ups shoes, the FTC alleged. Consumers who bought these “toning” shoes will be eligible for refunds either directly from the FTC or through a court-approved class action lawsuit, and can submit a claim here. The settlement with the FTC is part of a broader agreement, also being announced today resolving a multi-state investigation, which was led by the Tennessee and Ohio Attorneys General Offices and included attorneys general from 42 other states and the District of Columbia….Skechers’ unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”Shrinking Jeans

Congratulations, You Have the Creepiest Engagement Story Ever – Dating Fails – Missed Connections, Dating Sites, & Breakups – You have to see it to believe it. Failblog

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Name of debut release: The Haunting of Maddy Clare

Release date: 03/06/2012

Publisher: NAL

2 sentence summary: In 1920′s England, a girl working for a temp agency is assigned to be assistant to a ghost hunter. When they investigate the ghost of a dead servant named Maddy Clare, they get more than they bargained for.

Genre: Gothic, romance, mystery, historical, paranormal

Characters: Sarah Piper is a shy, lonely temp who is swept up in her very first ghost hunting case. Alistair Gellis is a young, rich, eccentric World War I vet who is obsessed with ghosts. Matthew Ryder is Alistair’s assistant – dark, damaged, and haunted by his war experiences.

What makes this story different: It’s a mix of genres. It’s a gothic ghost story, set in the 1920′s, with a romance and a mystery in it as well. The ghost story is the chilling, old-fashioned kind and it’s blended equally with the other elements.

Is this a series?:

Why you wrote this book: I love ghost stories, but most pure ghost stories don’t have a romance plot. I love old-school gothics and wanted to read one that was creepy and scary and romantic at the same time. I couldn’t find exactly what I wanted to read, so I wrote it myself!

Why is this your first published book? How many did you write before? I wrote two full manuscripts and half of a third before this one. The first two were rejected everywhere. I was halfway through my third manuscript and really struggling with it when the idea for this book came to me and wouldn’t let go.

As for why it was published, I think that the top reason was that after two and a half manuscripts, I found a voice that really worked for me. Once I settled into my voice, the writing flowed more easily and got noticed by first an agent, then an editor.

What’s your writing process? I have a day job so currently my writing process is “any way I can, at any time I can scrounge.” I usually start a manuscript longhand in a spiral notebook, because it’s easiest to carry everywhere and never runs low on batteries. Commuter trains, lunch breaks, whatever it takes. Once I have a good handle on what the book will be, I sit down at a computer and type.

When I’m on deadline, it consumes all of my evenings and weekends. I haven’t watched television in well over a year!

Your next published book. An Inquiry into Love and Death, NAL, March 2013

The last book you read that you loved. Just one? Oh gosh. Dark Road to Darjeeling, by Deanna Raybourn. Can’t Buy Me Love, by Molly O’Keefe. And yes, I just cheated.

The last book you read for research. Aside from dry World War I texts? The Pursuit of Love, by Nancy Mitford. Anything about or by the Mitfords is not only great research for the early twentieth-century era, but incredibly entertaining as well.

The romance book character you most identify with. Any Mary Stewart heroine ever. If I had to pick a favorite, possibly Nicola Ferris in the Moon-Spinners or Vanessa March in Airs Above the Ground.

You can check out more about Simone St. James and her books at http://www.simonestjames.com

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There are two major updates in the DOJ lawsuit.  An additional 17 states have sued the publishers and Apple.  Judge Denise Cote denied  Apple, Penguin, and Macmillan’s motion to dismiss.  You may want to read the Primer here if you haven’t already before going forward.

States Attorneys General Amended Complaint

1)  An additional 17 states have joined the existing states that have filed suit against the major publishers and Apple bringing the total number up to 31. Those states include: Texas, Comiecticut, Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Missouri, Nebraska, New Mexico, New York, North Dakota, Ohio, South Dakota, Termessee, Utah, Vermont, West Virginia, and Wisconsin, the District of Columbia, and the Commonwealths of Massachusetts, Pennsylvania, Puerto Rico, and Virginia.

Highlights from the amended lawsuit include a more detailed description of all the alleged concerted action and more damning quotations.  Prepare for your mind to be blown. Mine was.

•  Collectively the Big 6 account for approximately 60% of all revenue generated from print titles sold in the U.S. and 85% of all revenue generated from the sale of NYT Bestsellers.  In 2009, the publishers’ market share broke down as follows:  Random House (17.5%), Penguin (11.3%), Hachette (10%), HarperCollins (9.8%), Simon & Schuster (9.1%), and  Macmillan (5.4%)
• In 2009, Amazon held up to 80% of the digital book marketshare. (Judge Cote’s decision said 90%).
• Amazon’s price point of $9.99 “stoked intense competition among e-book retailers as its rivals priced at or near Amazon’s price point to remain competitive.  As a result, prior to January 2010, consumers could generally purchase NYT Bestselling e-books for $9.99″ (This is an important point because Cote points out in her decision that the price for digital books is identical from retailer to retailer post agency pricing)
• An executive of the parent corporation of one publisher met with other Big 6 executives “to discuss a joint venture” that would compete with Amazon and hopefully raise prices. (I wonder if this was/is Bookish).
• Windowing is referred to as “the first collective attempt to raise prices.”
• “Months before announcing that they would experiment with Windowing certain titles, certain Publishers shared information among one another about which titles they would Window and their anticipated delay period for e-book publication.”
• Carolyn Reidy shared information “confidentially” to another publisher of S&S’s plan to window Stephen King’s Under the Dome.  The executive shared this with his boss via email.  ”At the conclusion of the e-mail, the executive urges his boss to ‘double delete’ this e-mail from his files.”
• Carolyn Reidy emails Les Moonves, CEO of S&S’s parent corporation CBS, regarding windowing and the need to “‘gather more troops’ and ammunition first.”
• “[T]he Conspiring Publishers considering Windowing referenced themselves in one email as “the Club!”
• “On December 10, 2009, Simon & Schuster CEO Carolyn Reidy discussed systematic Windowing of e-books with Macmillan executive Stephen Rubin, a friend and former colleague of Reidy’s.  In an e-mail to Macmillan CEO John Sargent recounting part of their conversation, Mr. Rubin wrote, “In the nicest possible way, she’d [Carolyn Reidy] love for you to join them. She feels if one more publisher comes aboard, everyone else will follow suit.”
• John Sargent asked Eddy Cue from Apple to take a reduced cut on hardcover first releases because under the new Agency model, revenue would decrease from $14 per book to $9.00.  (This is important because Judge Cote uses this as an example of how anti competitive the actions were – that they would intentionally take a much lower figure in order to slow ebook adoption and raise prices).
• An executive to another executive in a parent corp. shared via email that Eddy Cue had indicated that Random House was out “and that ne [sic] need the five majors in but maybe four.”
• On Saturday, January 22, Penguin CEO David Shanks contacted Apple’s negotiator Eddie Cue.  As Mr. Cue reported to Steve Jobs, Shanks ‘wanted an assurance that he is 1 of 4 before signing.”
• One executive (it must be Hachette by process of elimination) called John Sargent to confirm whether Macmillan was in. Sargent affirmed but the executive told Sargent that the executive’s company would not likely agree.
• Sargent and Reidy had a conversation wherein Sargent told Reidy he was signing the Apple agreement and would pursue the agency model.
• Eddy Cue asked Steve Jobs for help reeling in one recalcitrant publisher (whom I am assuming is Hachette).  Jobs writes to an executive at the parent company of the publisher “As I see it, [Conspiring Publisher] has the following choices:  1) Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 to $14.99″  Within three days, the recalcitrant publisher threw in.
• The publisher contracts with Apple were virtually identical, particularly as it relates to the maximum price floor, definitions for bestselling titles, commission rate, and the most favored nations clause.
• Penguin could not switch to Agency Model until June 2010 so it withheld from Amazon all newly released ebooks until Agency Model implemented. (AH HA! Seriously I remember this panicked time a few years ago).
• “The higher retail prices benefitted Apple because it would earn higher revenues from its commissions on each sale. Insulated from e-book price competition with other Outlets, Apple could earn gross margins up to several times higher than in the Wholesale-Retail Model.  The Publishers achieved their long-running collective goal: higher retail prices for e-books.”
• After Macmillan had its buy buttons removed from Amazon following its demand to go Agency, publishers began to email “John Sargent needs our help!” and “Macmillan ‘has been brave, but they are small. We need to move the lines. And I am thrilled to know how A[mazon] will react against 3 0r 4 of the big guys.”  The same executive emailed Sargent saying “I can ensure you that are not going to find your company alone in the battle.”
• The CEO of Barnes & Noble emailed Sargent to let him know that B&N had Macmillan’s back.  ”Barnes & Noble would ‘go to the mat’ for Macmillan. In an attempt to assist Macmillan during the negotiation process, B&N moved its titles to the top of its merchandizing pods & search results on the Nook.”  (these things are so dirty)
• Amazon learned that five of the six publishers agreed to the Agency model and that these five accounted for about half of Amazon’s ebook business and thus Amazon caved to Macmillan.  (In Judge Cote’s decision we find out that Amazon was presented with this information on the same day (Jan 20) by four different publishers)
• When Random House refused to move to Agency, David Shanks of Penguin went to Barnes & Noble “I would hope that [Barnes & Noble] would be equally brutal to Publishers who have thrown in with your competition [Amazon] with obvious disdain for your welfare.”  B&N continued to promote RH titles and so Shanks went back to B&N.  ”Following this contact, B&N’s management decided not to feature Random House in any future advertising.”
• Random House eventually caves.  I actually feel sorry for Random House for some reason.

Mind blown?

Judge Cote’s Denial of Apple, Penguin and Macmillan’s Motions to Dismiss

2)  Judge Cote issued a ruling denying Apple, Penguin and Macmillan’s motions to dismiss in the civil class action.  The civil class action has been stayed against Hachette, Simon & Schuster, and HarperCollins, pending the outcome of the state attorney general lawsuits.  A motion to dismiss is measured against a standard that does not favor dismissal. Every pled fact is assumed true and every inference is read in favor of the complainant (or plaintiff).  The short version is that Judge Cote found that the class action petition made a plausible claim for per se antitrust violations based on horizontal price fixing agreements.  That is doom, in my opinion, for the publishers and Apple.  In fact, reading Judge Cote’s decision, my first thought was that she might reject the settlement because it doesn’t go far enough to protect consumers and punish the conspiring parties.

Here are some highlights from Judge Cote’s decision

•  ”By the Fall of 2009, the Publisher Defendants had come to see the growth of eBooks, combined with retailers’ discount pricing strategies, as a significant threat to their business model and to the publishing industry as a whole.  Traditionally, hardcover book sales have been publishers’ most profitable product.  Hardcovers typically provide publishers with the highest margins per unit of sale.”
• The Publisher Defendants feared that low-cost eBooks sales would cannibalize sales of physical books, especially hardcovers, eat into publishers’ profit margins, and harm brick- and-mortar retailers.  They also feared that in the future, Amazon might use its market power to reduce publishers’ share of the profit margins for eBooks.  Most fundamentally, the Publisher Defendants worried that Amazon’s low price point would condition consumers to believe that a book was only “worth” $9.99, and that this consumer expectation would exert powerful downward pressure on prices for eBooks and physical books alike. In the face of these pricing pressures, the Publisher Defendants feared that their business model would prove unsustainable over the long term.”
• Windowing decisions were announced by 4 of the big 6 within days of each other.  Dec 4 – Hachette; Dec 7 –  S&S; Dec 10 – HC; and Dec 16 – Macmillan.
• “In January 2010, Apple signed nearly identical contracts (the “Agency Agreements”) with each of the Publisher Defendants. Each of these Agency Agreements allegedly included four major elements.  First, each Agency Agreement specified that beginning with the launch of Apple’s iPad and iBookstore on April 3, 2010, the publisher would sell its eBooks in the iBookstore under the agency model.  For each sale in the iBookstore, Apple was to receive a commission of thirty percent of the sales price. Second, the contracts included MFN clauses.  These clauses stipulated that the final sales price for eBooks sold through other distribution channels could not be lower than the prices for those titles in the iBookstore.  Third, each Agency Agreement set the prices for eBooks according to a formula tied to the list price of physical books.  Under this formula, the eBook prices would range from $12.99 to $14.99 for most newly- released general fiction and nonfiction titles.  Lastly, each Agency Agreement explicitly required the Publisher Defendants to use the agency model when selling eBooks through other vendors of any meaningful size beginning on April 1, 2010.”
• The complaint alleges that the Publisher Defendants’ average per unit revenue for eBook sales decreased by 31 percent following the adoption of the agency model.
• After adoption of the agency model, the price of new bestselling eBooks increased by forty percent on average, even though there had been no corresponding increase in costs.
• “The CAC plausibly alleges that Apple and the Publisher Defendants took part in a conspiracy in restraint of trade, that an object of this conspiracy was to raise prices for eBooks, and that this restraint was unreasonable per se.  The Complaint describes specific conversations from which it is fair to infer that the Publisher Defendants had agreed among themselves to adopt a joint strategy to force an increase in the price of eBooks.  These include Hachette’s representation to Amazon on December 3, 2009 that the “industry’s” problem with eBook pricing would be solved if Amazon raised its prices by two or three dollars, and the separate meetings on a single day, January 20, 2010, in which four Publisher Defendants each presented Amazon with the identical demand that it adopt the agency model.  There are ample allegations that Apple became an integral member of this conspiracy and well understood that the upshot of its participation would be the elimination of price competition at the retail level, forcing consumers to, in Jobs’s words, “pay[] a little more” for eBooks. (my emphasis)
• “Although the Complaint does not claim that Apple had an interest in higher retail prices, per se, it does plausibly allege that Apple had an interest in limiting retail competition.  The Agency Agreements were a means to accomplish both these goals through a single tool.  The switch to the agency model meant that the Publisher Defendants could control retail prices, whereas the MFN clauses protected Apple and its 30 percent commission from price competition by other retailers.”
• The hub in a hub and spoke conspiracy need not be a dominant player.  (This was one of my concerns about the hub/spoke conspiracy.)  Judge Cote said ” Second, the above-quoted dicta in Dentsply does not establish that a hub must be a dominant purchaser or supplier; it merely states that this is “generally” the case. This observation should not be surprising: a hub’s existing market power provides an obvious incentive to horizontal competitors to sign agreements in restraint of trade. In this case, however, existing dynamics in the publishing industry provided powerful incentives for the publishers to sign such agreements.”
• Cote also wrote (and I think this is important) ” These arguments do not address the fundamental claim in the CAC. It alleges that the defendants conspired to eliminate retail price competition and to raise the price of eBooks above the $9.99 price set by Amazon. This states a claim for violation of the law. That the eBook prices may now fall within a range, albeit one typically well-above $9.99, does not render the Complaint’s description of the conspiratorial agreement implausible. Similarly, as explained in the Complaint, the publishers perceived that their financial interests and business model, taken as a whole, were better protected by raising the prices of eBooks even if it meant reducing their profit margins in that line of their business. In the words of Macmillan’s CEO, the publishers believed the agency model would allow them to “have a stable and rational market,” and that the tradeoff was in their long-term business interests. “
• Cote ultimately found that the price restraint allegations were horizontal (between firms) and not merely vertical (within the firm) & conscious parallelism and thus measured under a per se standard but that even under a rule of reason would be illegal.

Judge Cote pointed to elements that she felt were supportive of an agreement (the essential ingredient for a horizontal cartel)

• Specific conversations from which it is fair to infer that the Publisher Defendants had agreed among themselves to adopt a joint strategy to force an increase in the price of eBooks.
• Signing agency agreement with Apple and demanding the same from Amazon would not have been in the publishers’ self interests unless there was a conspiracy of action.
• The rapid and simultaneous switch to the agency model — a model heretofore unknown in the publishing industry — by multiple competitors with every major eBook retailer was similar to the frowned upon action in Twombly.  Twombly, 550 U.S. at 556 n.4.

Other notes of interest

Penguin argued that it was entitled to arbitration based on the user agreements between the customer and retailers like Amazon.  This is based on the premise that Amazon is merely an agent of Penguin and thus any agreement a customer  has with Amazon passes to Penguin.  According to the docket, Penguin appears to be abandoning this claim.  Penguin was ordered to advise the court by April 30, 2012, whether it intended to proceed with its arbitration argument.  No filing by Penguin exists in the record which likely means that Penguin has waived the right to arbitrate.

 ORDER: ORDERED that, unless Penguin advises the Court by April 30, 2012 that it wishes its March 2 motion to stay proceedings and compel arbitration to be addressed, the motion will be deemed withdrawn. IT IS FURTHER ORDERED that in the event Penguin files a renewed motion to arbitrate, any party opposing the motion may present any arguments that are appropriate, including that Penguin has waived its right to arbitrate. (Signed by Judge Denise L. Cote on 4/25/2012) Filed In Associated Cases: 1:11-md-02293-DLC et al.(djc) (Entered: 04/26/2012)

The emphasis on windowing is new to me and I don’t know why I missed it. It’s genius of the DOJ/States Attorneys General to argue this because it sets a pattern of concerted behavior regarding price controls. In this study by Yu Hu and Michael D Smith, the scholars collected quotes by major publishers regarding windowing:

Table 1: Delaying Ebooks

Event	Quote
September 2009: HarperCollins delays the ebook release of Sarah Palin’s memoirs by 5 months after the hardcover release date.	“The publishing plan is focused on maximizing velocity of the hardcover before Christmas.”Brian Murray, CEO HarperCollins
November 2009: Viacom/Schribner delays the ebook release of Stephen King’s new novel by 6 weeks after the hardcover release date.	“We think that this publishing sequence gives us the opportunity to maximize hardcover sales”Adam Rothberg, Spokesperson Schribner
Early 2010: Hachette Book Group delays the ebook release of nearly all of its titles by 3-4 months after the hardcover release date.	“I can’t sit back and watch years of building authors sold off at bargain- basement prices.”David Young, CEO Hachette
Early 2010: Simon & Schuster delays ebook release for 35 major titles by 4 months after the hardcover release date.	“The right place for the e-book is after the hardcover but before the paperback,”Carolyn Reidy, CEO Simon & Schuster

My guess is that the publishers felt like discussing windowing and plans to window books wasn’t illegal collusive behavior because there was no price discussed but the objective remained the same – how to raise digital book prices.

What’s Next?

Discovery is next as well as the approval or rejection of the settlement.I wouldn’t be surprised if the DOJ or the States Attorneys General ask for a temporary injunction to halt any agency agreements based on the language in Judge Cote’s decision.  The publishers would be hard pressed to argue that they couldn’t make a change quickly given how they were able to move from Wholesale to Agency.

A denial of a motion to dismiss merely means that a case can proceed forward but the explicit finding by Judge Cote that the evidence supports a per se violation makes it difficult for the defendants.  They are going to have to convince Judge Cote and then a jury (if they get by Cote) that there was no agreement.  Business justifications are not allowed in a per se claim.  Cote points to these facts as supportive of agreement:

the early efforts to induce Amazon to raise its prices for eBooks, first through Hachette’s request on behalf of the “industry” in December 2009, and when that proved unsuccessful, through windowing eBooks, are principally relevant as evidence of the willingness of Publisher Defendants to work together to effect market change, and specifically, to raise the prices of eBooks through collusion. That evidence of earlier jointly undertaken activity render more plausible the claim that the Publisher Defendants were indeed colluding when they acted to end the wholesale model for distribution of eBooks and thereby to raise the prices of these books.

I think that the defendants (Apple, Penguin and Macmillan) have two options here. Settle now or take their slim chances to jury where I am convinced they will lose and hope that the 2nd Circuit slaps down Judge Cote’s per se finding on appeal.

Documents in PDF form.

• Amended States Complaint
• Judge Cote’s Decision

Related posts:

1. Antitrust Primer for the Publishing Price Fixing Lawsuit
2. New Report Says Author Presence Online Is Important
3. Publishers Get Wise, Undercut Amazon prices

Personal Note: Self publishing mentality creeps into other creative venues. Louis CK did it with stand up comedy. Now musicians via kickstarter. It’s all about the platform now.

In E-Reader Age of Writer’s Cramp, a Book a Year Is Slacking – NYTimes.com – “For years, it was a schedule as predictable as a calendar: novelists who specialized in mysteries, thrillers and romance would write one book a year, output that was considered not only sufficient, but productive. But the e-book age has accelerated the metabolism of book publishing. Authors are now pulling the literary equivalent of a double shift, churning out short stories, novellas or even an extra full-length book each year. “ NYTimes

Personal Note: Because it is all about platform and platforms are built on constant (but good) content.

A Non-Book Smuggler Survey: The Results | The Book Smugglers – “Highlights
• Predominantly female audience (95%)
• Young (31 years old), international, educated, and with disposable income
• Overwhelmingly read ebooks (81%); purchase at least 4 books per month
• Ideal price for ebooks is $4.00-$6.99
• Do not care (and will not pay a higher price) for enhanced ebooks/enhanced content
• Highly likely to purchase limited edition/collectible hardcover editions”The Booksmugglers

Personal Note: A must read data compilation by Thea from the BookSmugglers (a graduate student who wrote her thesis on ebook prices). She compiled responses from over 919 respondents.

If You Think The Cost Of ‘Piracy’ Is High, What About The Cost Of Enforcement? | Techdirt – “Take, for example, the predecessor to SOPA/PIPA: the ProIP Act, which passed in 2008. A report by the Congressional Budget Office showed that the cost of this bill, which is almost entirely focused on increased enforcement was $435 million. Yes, you read that right. Taxpayers have been on the hook for nearly half a billion dollars for the increased enforcement initiatives — like the spectacular flop known as Operation In Our Sites. Is this really a wise use of taxpayer resources? “ Techdirt

Newly discovered Mayan calendar goes way past 2012 – USATODAY.com – Newly discovered wall writings found in Guatemala show the famed Maya culture’s obsession with cycles of time. But they also show calendars that go well beyond 2012, the year when the vanished civilization, according to popular culture, expected the end of the world. “So much for the supposed end of the world,” says archaeologist William Saturno of Boston University, lead author of a study in the journal Science, which reported the discovery on Thursday. USA Today

Deals

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Related posts:

1. Monday Midday Links: Unscientic conclusions put forth as real science (what else is new)
2. Monday Midday Links Roundup: ebooks signal death of midlist?
3. Tuesday Midday Publishing Links: Enhanced EBooks?

This is a long article. Grab a cup of coffee and settle in.   I wrote this article and sent it to the RWR but it wasn’t suited for publication so I thought I would share it with you.   The right to sever a copyright grant after 35 years came to my attention when Evan Schnittman mentioned it briefly at the end of one of his articles.   I went off to research the issue because I found it fascinating.   This is what I learned.

A new author enters a publishing contract with very little negotiating power. She is presented with a contract with stock terms and an offer of an advance in exchange for an assignment of her intellectual property rights to the publisher. Often she is in the position of either taking the contract with little changes or not publishing. The Supreme Court noted that “authors are congenitally irresponsible, [and] that frequently they are so sorely pressed for funds that they are willing to sell their work for a mere pittance.” Fisher Music Co. v. Witmark, 318 U.S. 643, 656 (1943).

Congress, who is responsible for setting the parameters of the copyright law in the United States, recognizes the economic imbalance between authors and publishers and has tried to include provisions to correct the imbalance. One of those provisions under the current copyright law is the right of termination of a previously granted copyright.

Historical Background

Initially, the 1909 Copyright Law allowed for renewal terms. The 1909 Copyright Law was based, in part, on the Statute of Anne, the very first law that provided protection for the creative works of authors. The Statute of Anne granted authors 14 years of protection and the 1909 Copyright Law doubled it. The creator of a work registered for a copyright and was granted protection for 28 years. At the end of 28 years, the creator could renew the copyright for another 28 years. The need for renewal allowed the creator to renegotiate the original grant of copyright, usually for better terms. As the end of the two year renewal terms loomed near, Congress began debating extension of the copyright.

Congress passed the Copyright Act of 1976 and added 19 years to the copyrights which were created under the 1909 Act giving those works 75 years of protection. New works were granted protection for the life of the author plus fifty years (which was the international standard at the time). In the Copyright Renewal Act of 1992, Congress did away with renewals added an additional 47 years of protection. This essentially made copyright protection for all works published under the 1909 Act to have a copyright term of 75 years.

Sonny Bono Copyright Term Extension Act (known as CTEA) added an additional 20 years of protection to all copyrighted works. Works produced on and after January 1, 1978 were granted life of the author plus seventy years. Works created prior to January 1, 1978, and either in the first or second term of renewal, were granted an additional 20 years of protection.

The longer term both helps and hurts authors. It helps authors in that they and their heirs are entitled to more revenue from their creative works, but it hurts because there is no time in which an author can renegotiate her rights if that is not a provision in the original grant language.

Essentially the renewal period in the 1909 Act allowed for a natural reversion of rights. Renewal was complicated for an author. Many missed the renewal deadline, failed to follow the procedure accurately, and signed away their expectancy in the first time instead of waiting. Congress, when it eliminated renewals and extended the period of protection, included a reversion of rights through a termination procedure.

Section 203:

In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination…

Upon the effective date of termination, all rights under this title that were covered by the terminated grants revert to the author, authors, and other persons owning termination interests…

17 U.S.C.A.  § 203 (a) (2009).

The purpose of Section 203 is to provide authors a natural reversion of rights so that they get a second bite at the bargaining apple. It allows any author, or a person assigned by the author, to terminate the original grant during a five year period beginning 35 years after the publication was made or 40 years after the grant of rights, whichever comes first.

The key difference between Section 203 and section 304 is who has the right to terminate the grant of copyright. Section 203 applies only to contracts signed by authors and only the author and the author’s assignee via a will or other document would have the right to exercise the termination provision.

Ostensibly, Section 203 limits the duration of a grant or a maximum period of time in which a grant can be effective. After that maximum period of time has expired, the author recaptures her rights and has the ability to put them on the marketplace once again. Contractually, an author and her publisher can grant a shorter period of time. For example, a standard author contract has an “out of print” provision which requires a publisher to keep the work in print for a period of time. If the publisher allows the work to go out of print for a period of six months or more, the author may request by written notice that the work be placed back into print. If the publisher fails to do so within a proscribed period of time, then the grant is terminated and the rights revert back to the author.

Each contract must be examined for reversion of rights language and how reversion of rights is to be effectuated. “In print” is defined by the contract and standard terms may include language such as “in print if it is in stock or available for sale in any edition of the Publisher or any of its licensees”. The timing or occurrence of reversion of rights can differ for print v. digital rights, or territorial rights. Digital rights will often revert if, during a period of time, royalties do not exceed a specified floor.

If the publisher is keeping the work in print, however, rights would never revert back and, therefore, an author is entitled to reclaim those rights through the exercise of Section 203 termination.

What Can You Terminate Under Section 203?

In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination

An author can terminate almost any transfer of her copyright if the grant was executed on or after January 1, 1978. The grant must fulfill the following qualifications:

a) Not be a work for hire
b) Executed by the author and no one else
c) Not a grant made via a will

Problems arise if the original grant was open ended. The Rano v. Sipa, 987 F.2d 580 (9th Cir. 1992) case suggests that an open ended contractual grant cannot be terminated except for that 5 year period defined in Section 203. Walthal v. Rusk, 172 F.3d 481 (7th Cir. 1999), determined that a contract for an indefinite period of time can be terminated by the request of either party to the contract. Thus in some states, unless the original grant is for longer than 35 years, the contract will not be terminable until the conditions of Section 203 are satisfied.

Further, derivative works that were made pursuant to the grant cannot be terminated.

Who Can Terminate?

Basically, the author and the author’s heirs are the only ones entitled to terminate a grant made after January 1, 1978. In the case of an anthology, or joint work, a majority of the authors must execute the notice for termination.

This becomes more complicated if the author has died, in the case of either a solo or joint work. For example, for the heirs to terminate a grant, they must hold more than 50 percent interest in the work. If the author has a spouse, the spouse is entitled to the entire interest, but if the author has children, the spouse is entitled to only 50 percent and the remaining 50 percent is split between children and grandchildren (obviously this is an issue ripe for a book!). In Larry Spier, Inc. v. Bourne Co., 953 F.2d 774, 777 (2d. Cir. 1992), the author included his mistress as a beneficiary in his will, but the court found that the mistress was not entitled to a termination right because the statute applied only to spouses and children.

When Can You Terminate?

Termination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant; or, if the grant covers the right of publication of the work, the period begins at the end of thirty-five years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever term ends earlier.

17 U.S.C.A.  § 203(a)(3) (2009).

An author is entitled to terminate the grant 35 years after the execution or 40 years after the first date of publication, whichever comes first. In order for termination to occur and rights to revert, notice must be timely given. According to Section 203, notice must be within 10 years, but no less than two years before the effective date of termination provided in the notice.

Equation:

Date of Execution of Grant + 40 = X
Date of Publication + 35 = Y

Compare X and Y.   Which is the earliest date?
Earliest date – 10 = first date you can send in your termination notice

Earliest date   - 2 = last date you can send in your termination notice

Example 1:

Book rights are sold to a publisher in 1980 and the book  is published in 1982

1980 = date of execution of the grant
1982 = date of publication

1980 + 40 = 2020
1982+35 = 2017

2017 v. 2020 = 2017 being the earlier date
2017 -10 = 2007 is the first date upon which to terminate a grant
2017-2 = 2015 is the last date upon which to terminate a grant.

How Do I Terminate?

The termination shall be effected by serving an advance notice in writing, signed by the number and proportion of owners of termination interests … or by their duly authorized agents, upon the grantee or the grantee’s successor in title.

17 U.S.C.A.  § 203(a)(3) (2009).

The Code of Federal Regulation  §210.10(b)(2) lays out in detail the contents of the termination notice. It does not provide a form. A termination notice should include the following for each work (other provisions apply if it is the heirs who are terminating the grant):

• Name and address of the author or authors heirs
• Date of the execution of the grant (often this will be the date of the signed contract) and the date of the first publication of the work.
• Title of the work and the author. If it is a joint work such as anthology, the notice should list all the authors who are requesting the termination.
• Original copyright number, if possible.
• A statement describing the original grant.
• The effective date of the termination.
• Signature of the author or authors or duly authorized agent.

Each termination notice must be recorded with the Copyright Office with the correct information and during the correct time frame. Failure to properly record a termination may result in the termination being invalid. In other words, this is not something you should try at home, but rather contact an entertainment lawyer or your agent to effectuate the termination. Once those rights are reverted back, the content creator has another opportunity to sell their valuable works.

Only Terminate Once

While Congress wanted to protect authors, it is determined that the authors are only entitled to one chance at renegotiating their contracts. In Penguin Group (USA) v. Steinbeck, 537 F.3d 193, 204 (2nd Cir. 2008), the court noted that the termination provision could only be used once by authors and their heirs:

It should be noted that under our view, authors or their statutory heirs holding termination rights are still left with an opportunity to threaten (or to make good on a threat) to exercise termination rights and extract more favorable terms from early grants of an author’s copyright. But nothing in the statute suggests that an author or an author’s statutory heirs are entitled to more than one opportunity, between them, to use termination rights to enhance their bargaining power or to exercise them. See 17 U.S.C.  § 304(d) (permitting exercise of termination right only “where the author or owner of the termination right has not previously exercised such termination right”).

Conclusion

It is increasingly important to obtain one’s rights in this changing publishing period. The second chance to negotiate one’s work can result in a higher royalty rate, new advances, and other economic opportunities.

Disclaimer: A short article can never address all the legalities of termination and the following is only intended to provide an overview. Those that have questions about a specific grant should seek legal counsel as soon as possible. The works that are subject to a pre January 1, 1978, grant must follow the termination clause provision in Section 304. Those works that were subject to a grant post January 1, 1978, must follow the termination clause in Section 203. This article addresses only Section 203 provisions.

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From Flickr account ĐāżŦ {mostly absent)

Copyrights, particularly lengthy ones, benefit the corporations that license and/or those copyrights.  The Copyright Extension Act of 1998 isn’t called the Mickey Mouse protection act because it is designed to protect individual creators.  It is designated as such because it benefits one of the largest owners of intellectual property, Disney.  As of 1998, the term of copyright extends from 50 years for an individual and 75 years for a corporation to life of an author plus 70 years and 120 years for a corporation or 95 years after publication, whichever occurs earlier.

The reason that this is problematic is that when authors sell or license their works to a publisher, it is ordinarily for the term of copyright.  When a new author or an author with little following enters into negotiation with a publisher, she rarely holds a position of power.  This has changed given the new options available to authors such as digital first or self publishing but the fact remains that an individual’s ability to negotiate differing terms from the boilerplate is challenging.

Even the Supreme Court acknowledged this in Fisher Music Co. v. Witmark, 318 U.S. 643, 656 (1943).  The Court said  “authors are congenitally irresponsible, [and] that frequently they are so sorely pressed for funds that they are willing to sell their work for a mere pittance.” Id.

As a result, authors are allowed to reclaim their copyright after 35 years.  I wrote an extensive article about this in 2009 (which I am reposting today).  A longer term of copyright protection helps because value from the  author’s creative works can pass to his or her heirs.  The longer copyright hurts authors because it does not allow for a period of renegotiation.  We have seen the backlist of authors become valuable but not exploitable by authors.

Marsha Canham noted on her blog that  the backlist titles are bound by old contracts wherein the royalty rates were 6-8% of “net”.

What does the author get out of that, you ask?  Well…remember that these are backlist books, so the author probably has an old contract that, in some cases, gives the same royalty rate for ebooks (which were just a glimmer on the horizon ten years ago, and twenty years ago not even a glimmer) as for print books, which would be between 6-8%  of the *net* price.

..

But I digress again. NOT counting any net mumbo jumbo, we now have $52,300 for those books. Out of that, the author *should* get 25% which would work out to $13,075. But using Publisher Math, they only get $6537. And if the contract is older, and we’re working off the 8% royalties…that number zooms  down to $4184, which, using Publisher Math, can become finostigated down to around $2K.  Even if it’s left at the 8%, the publisher still gets the lion’s share of $48,116. And if it’s left at 25%, they keep $39,225.

$39,225 for the publisher, $13,075 for the author, and that’s using rose colored glasses for the 25% royalty rate on 10,000 downloads of a $7.99 ebook without any finostigating. Take off the glasses, use the 8% and the numbers change to $48,116 for the publisher and $4184. for the author.

The current standard royalty rate for digital books are 20-25% of net.

A shorter term of copyright, such as 14 years with several renewal periods of 14 years a piece would allow an author to renegotiate a contract every 14 years, taking advantage of the changing landscape in publishing.   It may be to the author’s benefit to sell every renewal period up front or she could preserve her renewal periods and take a lower offer initially.  However, a shorter copyright period with subsequent renewal periods would endow the author with additional bullets in her negotiating weapon.

The time period for reclaiming one’s copyright has passed for some books published in 1978. 2013, for example, will be the last year for some authors to exercise their termination rights.  The termination right is a valuable option for authors, but one that requires affirmative action.  A shorter copyright term would automatically limit the length of the grant of copyright and allow for renegotiation which would better reflect the rapidly changing market.

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Chapter 1: Death of a Legend

A full moon illuminates a cloudless black night sky. A sixty foot long wooden hulled airship floats lazily in front of the moon; its ninety foot cigar shaped helium filled gasbag holds the double decked airship secure against the aether. Below, the city of Baltimore sleeps in the late night hours. The March winds blow steadily and the airship’s propellers twirl lazily keeping the ship at its station.

‘All hands, attention’ says Captain Turner. The portly thirty year old man strokes his thin close cropped beard before thrusting out his chest and both chins.

The airmen stand around in their sky blue uniforms staring expectantly at the Captain and the taller, muscular man beside him. A cool wind blows across the smooth wooden deck.

‘I know we have not been together long, but, I have been given an important task tonight and I am sure you men will acquit yourself admirably. I should hate to have anyone figure poorly in my report’ he says in a thin voice.

‘Ah, beggin’ the Captain’s pardon, but, what are we doing floating above an empty rail station?’
‘I’m glad you asked, Midshipman. There is a train due to arrive shortly carrying an important cargo. The USS Cerberus has been ordered to provide escort and see the train safely from Baltimore to Washington, DC.’

‘A train at this hour? Should we run out the guns or be on the lookout for English airships; seems too far inland for those boys’

‘Ah, good questions. Commander Whyte will handle the details of the mission and your preparations. I will be leaving him in charge, but, I have every confidence in all of you’ says Captain Turner before walking across the deck and entering the upper deck and his elegantly furnished Captain’s Cabin.

The muscular man straightens the white cuffs of his dark blue uniform jacket and picks imaginary lint from the gold braid of his sleeves before turning to the airmen.

‘Now, let’s stop polishing the brass and get to your stations. Midshipman Hampton, have your crews man the port and starboard gatling guns. Jefferson, I need you in the Crow’s Nest, shout out when you see the train arrive. I am not sure what manner of threat the USS Cerberus is suppose to guard against, but, I want all of us prepared for any threat. Hopefully, this will prove to be quiet night’s sailing and we’ll be able back at the airfield by morning’ says the Commander.

‘Commander Whyte, sir. Any chance we will be back at the airfield in time to attend the ten year celebration?’

‘Let’s hope so, Midshipman. I do believe my daughter’s beau has finally worked up the nerve to ask for her hand in marriage. It will do my heart good to know she will be well provided for’

‘Ah, Midshipman Jones, sir? He is a good match for Miss Pearl, if I may be so bold. I only mean that he is a fine young officer with a good future in the Aeronautical Corps ahead of him, sir’ says Midshipman Hampton. The young man looks down at the holy stone polished deck and absently rubs the back of his neck beneath his black hair.

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Genre: Historical black comedy

Grade: B

I’ve been meaning to watch and review this one for ages but got the boost I needed when I saw it’s being shown today on TCM. Used to be it was impossible to find this one on DVD but recently both a region 1 and region 2 version have been released. The full movie can also be watched at IMDB and on youtube. With the recent use of Victorian England as a popular historical romance era, “The Wrong Box” can slide in right between your reading schedule.

Seventy-some years earlier, the parents and guardians of twenty young, upperclass English boys entered them in a tontine. The idea is that for each boy, the sum of 1,000 pounds is entered into a “pot” – to be appropriately managed financially – and that the last surviving member gets the whole ball of wax. With the death of the third to the last man, two elderly brothers, Masterman (John Mills) and Joseph (Ralph Richardson) Finsbury, are now the only living ones left. They’ve been estranged for years but both are eagerly taken care of by their respective heirs with the hope that their man will outlive the other and thus get the (current value) 111,000 pounds.

Masterman appears to be fading at last and a telegraph is sent to Joseph summoning him to London. Accompanied by his two greedy nephews Morris (Peter Cook) and John (Dudley Moore), Joseph takes the train but a horrible crash, a badly mangled body and Joseph’s propensity to wander around and get caught up spewing facts to complete strangers leaves the nephews certain that he’s dead. Now what do they do? If they can conceal Joseph’s death until after Masterman kicks off and then stage their uncle’s “death,” they can claim all that lovely money. But Masterman isn’t ready to hand in his notice quite yet plus Joseph has managed to make it to London leading to fast and furious hijinks as everyone tries to conceal everything just long enough to win the prize.

The – slightly bizarre – opening credits give a hint of the pace to follow. This isn’t a frantic screwball comedy but rather a slower, more stately black comedy that takes a little while to begin building up the pace to the humor. The plot has to be explained, the main characters introduced and the stage set before the macabre fun can kick in. There are misunderstandings, misidentified people, misidentified bodies, a hearse chase through London (these final chase scenes seem to have been so popular with 1960s directors), a final confrontation/explanation at a cemetery and of course the switched – wrong – boxes. And a piano.

Before the main action begins, there’s an amusing sequence which shows the deaths of some of the boys/men – now stop being shocked, this is a black comedy – and believe me, some of them could easily have competed in Monty Python’s “Upperclass Twit of the Year Award.” Even Queen Victoria acts a touch twitish while attempting to knight one of them. At various times throughout the film, amusing cue cards, like those from silent movies, will appear on screen. And be sure to read the order of the cast at the end.

The film is packed with some of the best talent in Britain. Richardson plays a man obsessed with trivia who successively bores anyone unfortunate to encounter him while Mills is his cranky, cantankerous brother who attempts to kill Joseph at least 7 different ways during the short scene of them together. I didn’t mention in the plot but Michael Caine is Masterman’s grandson Michael, who has been selling off all their possessions for years in order to keep a roof over their heads, while Nanette Newman plays Julia, the supposed niece of Joseph. Those two sweet, charming ninnies fall quickly in love-at-almost-first-sight complete with a hilarious scene of them set off into spasms of swooning slo-mo emotion by the mere sight of her ankle and his bare elbow. They were Victorians, remember? Their joy is complete when they discover that their children won’t be idiots, due to the fact that they’re not really related, and that they share being orphans, his parents were killed in a balloon ascension while her missionary parents were eaten by their Bible class.

Peter Cook and Dudley Moore are fabulous together as the two nephews who’ve slaved away at keeping Uncle Joseph well all these years and who, By God!, aren’t going to lose that money now. Cook’s caddish Morris is the true brains of the two while Moore’s randy John never met a chambermaid, or housekeeper, he didn’t like.

But the two actors I found I absolutely adored here are Wilfred Lawson as Peacock, the venerable and doddering butler of the Masterman Finsbury household and Peter Sellers as Dr. Pratt. For the entire film, you’re convinced that Peacock is only a few vertical degrees from falling over or just about to kick the bucket himself yet he doggedly persists in answering the door, announcing visitors, fetching the tea, packing crates of valuables to hock at Sotheby’s and whatever else the Finsburys need of him. It’s literally old family loyalty in action to the end. Both of Sellers’ scenes are played with Cook and you can almost see Cook fighting not to laugh at how funny Dr. Pratt’s lines are. Pay close attention as Sellers mumbles a touch to give Pratt the absent mindedness needed and watch for how he uses a thermometer and a kitten. Be assured though that none of the tens of moggies crowding his decrepit quarters are harmed in the making of this film.

I was amazed that in spite of all the switches, near misses, misunderstandings and skullduggery, the plot is easy to follow and I never once got lost trying to remember who’s stuffed into what. The Victorian settings and decor are suitably overcrowded and dark and there’s a nod to one of the manias of the era in the form of Morris’ egg collection. And of course the whole movie is a love letter to the Victorian fascination with death. The dialogue is subtle and the zingers are understated so listen carefully to catch them all. This is a quiet little gem that sneaks up on you and I’m glad I finally pulled it out from my “recorded off TCM” stack, dusted it off and gave it a spin.

~Jayne

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Dear DOJ: Agents Speak Out | Publishers Lunch – “The 13-member board of the Association of Authors Representatives has sent a letter to the Department of Justice opposing the proposed agency ebook pricing settlement with Hachette Book Group, HarperCollins, and Simon & Schuster. In a separate email, the AAR called on members “to express their views on the settlement to the DOJ and we hope you will also urge your clients to do the same. Your note might address whether you feel the settlement will foster competition and well-being in the literary marketplace, or the opposite…. We believe it is tremendously important that we all be heard on this most significant issue. We believe the more letters from publishing professionals that are received, the better the chance of affecting the judge’s final decision.” The organization is planning “an open forum at which we will discuss the various elements of the suit and the proposed settlement,” with details to come.” Publishers Marketplace (paid link)

Personal Note:  Of course agents are unhappy with the decline of paper books and frankly their opposition to the settlement just confirms the DOJ’s assertion to the court that ebook prices were held unnaturally high to prevent cannibalization of print book sales and to slow ebook adoption. If you haven’t sent a statement in support but would like to, please feel free to use this form: http://support4settlement.wordpress.com/

LAGARDERE S.C.A. : Lagardère SCA: Quarterly Information – First quarter 2012 | 4-Traders – “On April 11, 2012, Hachette Book Group has negotiated a settlement with the U.S. Department of Justice (DoJ) on e-book sale price-fixing. According to the terms of that agreement, the agency contract with distributors is being maintained, but those distributors may offer customers discounts within certain limits and during a two year period following the enforcement of new contracts.” and “Good performance in the United States (+2.8%) due to steady growth in e-book sales, now at 28% of net Adult trade sales in the US (vs. 20% in 2011).”4-Traders.com

Personal Note:  It looks like Hachette is going to pursue some kind of agency pricing deal with Amazon. The only agency pricing deal (which isn’t even agency pricing but whatever) limits the total number of discounts that Amazon can give on a book by the amount of commission Amazon earns on the aggregate sales of the publishers’ books.

Amazon Media Room: Press Releases – “Owning a Kindle just got a whole lot better for magic-loving Muggles. Starting June 19, Amazon.com (NASDAQ:AMZN) is adding all seven Harry Potter books (in English, French, Italian, German and Spanish) to the Kindle Owners’ Lending Library (KOLL). Harry Potter is the all-time best-selling book series in history, and Amazon has purchased an exclusive license from J.K. Rowling’s Pottermore to make the addition of these titles possible. The Kindle Owners’ Lending Library is a benefit of Amazon Prime membership—Prime members also enjoy free two-day shipping on millions of items and unlimited streaming of more than 17,000 movies and TV episodes. The Kindle Owners’ Lending Library has now grown to over 145,000 books that can be borrowed for free as frequently as once a month, with no due dates.” Amazon Kindle Boards

NY1 Exclusive: Memo Shows Company Aware Of State Test Errors – NY1.com – “Almost 30 different test questions have now been declared invalid because they’re confusing or have outright errors. And now Pearson Publishing is scrambling to explain what went wrong and how it’s going to fix things….. The Pearson executive wrote that an investigation is underway but said many errors seemed to result from a lack of proof reading rather than a translation issue. He mentions a math question where a negative sign somehow became a positive sign in a translated version. In another case, the translators seem to have confused common middle school math terminology, replacing the term “mean” with a translation of the term “median.””NY1

Personal Note:  This is a story I have been following but didn’t post about. Apparently Pearson Publishing (a division of Pearson which is the parent of Penguin) provides testing materials to schools. A huge uproar began after there was a strange question on an English exam about the feelings of a pineapple. The author took to his website to answer questions about the Pineapple question. You can read more about it here. More problems arose. If the problems are truly because of proofing, then obviously some internal controls need to be instituted. Education, I believe, constitutes about half of the revenue of Pearson.

Inside Amazon’s Idea Machine: How Bezos Decodes The Customer – Forbes – ” Another one-time insider remembers a relentless push for sturdier-than-usual cardboard so customers could reuse its boxes for other shipments or presents, creating goodwill and putting Amazon’s name in front of a second set of potential customers.” Forbes Personal Note: This is a pretty fascinating (and long) article on Bezos.

Groundbreaking series of articles about file-sharing studies from Zero Paid | TeleRead: News and views on e-books, libraries, publishing and related topics – ”  Zero Paid takes a look at eight different academic studies of file-sharing.  These are not the usual industry sponsored drivel, but legitimate academic studies with science backing them up.”  Teleread   Personal Note:  Thanks for the h/t from reader AdamThis is another long set of articles to read. You might save them up for a rainy day.  Spoiler:  the money thrown against file sharing isn’t actually stemming file sharing hence it might behoove media developers to spend that money on something else.

Comment from Dear Author – From a self published author:  I thought I’d just e-mail here since I didn’t want to clutter up the comments with stuff that I don’t think is of any interest to readers. I wanted to remark on the statistics regarding time windows for when readers browse e-books. While I can only speak for myself, my sales numbers back up the observations that 8 – 9 and 7 – 10 in respective time zones are the most active for browsing. .. I keep an eye on purchase trends for my one self published book, and since day 1, I’ve seen most sales activity during these specific time windows.

Torstar Corp. raises dividend, reports solid results amid challenging environment – thestar.com – “Torstar Corp., publisher of the Toronto Star, is increasing its dividend to shareholders as revenues for the first-quarter declined slightly in a challenging environment, the company said.
…
Earnings before interest, taxes, depreciation and amortization, commonly known as EBITDA, for the first quarter were $40.2 million, down $1.5 million from the first quarter of 2011.  The decline reflects relatively stable media results and a decline at Harlequin, which continued to adjust to the shift to digital reading, the company said.”Toronto Star

Amazon.com: Customer Discussions: Random House excludes Kindle for Jurassic Park release – Over on the Kindle Boards, someone discovered that Jurassic Park was no longer available for pre order even though B&N and iBooks had it available and Kindle once had it available for pre order.  The reader called Amazon customer support and was told that Random House had pulled the book from the Kindle store for the foreseeable future.  I called Amazon and was told that the book was pulled by the author. I told the CS person that Crichton was dead and she said that Amazon doesn’t control availability. I wrote to Random House and this morning was sent a link to the Kindle version of Jurassic Park. What I think happened here is that the Amazon CS reps are trained to blame the publisher for everything.

Deals

• Lavendar Vows by Colleen Gleason * $0.00 * A | BN | K | S
• Tainted by Temptation by Katy Madison * $0.99 * A | BN | K | S
• Lord of Vengeance by Lara Adrian * $0.99 * A | BN | K | S
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• Magic In His Kiss by Shari Anton * $1.99 * A | BN | K | S
• To Surrender to A Rogue by Cara Elliott * $1.99 * A | BN | K | S
• For Better or Hearse by Laura Durham * $1.99 * A | BN | K | S
• Deception by Lee Nichols * $1.99 * A | BN | K | S
• Purple Heart by Patricia McCormick * $1.99 * A | BN | K | S
• The Doomsday Key and The Last Oracle with Bonus Excerpts by James Rollins * $2.99 * A | BN | K | S
• Heart of the Dove by Lara Adrian * $2.99 * A | BN | K | S
• Heart of the Hunter by Lara Adrian * $2.99 * A | BN | K | S
• Heart of the Flame by Lara Adrian * $2.99 * A | BN | K | S

Finally, a fun info graphic from Online Universities:

Brought to you by: OnlineUniversities.com

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Name of debut release: Overseas

Release date: 05/10/2012

Publisher: Putnam

2 sentence summary: A First World War infantry officer follows the woman he loves across time to contemporary Manhattan.

Genre: Romance, time travel, general fiction

Characters: Julian Ashford is a First World War soldier-poet, in the mold of Rupert Brooke and Julian Grenfell, bred in the prewar romantic tradition and forced to adapt to a postmodern age of irony and cynicism.
Kate Wilson is a determined young Wall Street analyst, disillusioned with her job and with her experience of 21st century courtship.

What makes this story different: Overseas combines the emotional impact of a truly sweeping love story with the unique premise of a book set during the First World War and modern-day Manhattan. The parallel stories — the Armageddon of war, the financial crisis of 2008 — bring out the book’s themes: namely, the vast cultural gulf between the world of a hundred years ago and the world today, and the ways in which crisis tests our true character.

Why you wrote this book: Long before Downton Abbey swept across the landscape, I’ve been fascinated by the first twenty years of the 20th century: a period of enormous social, technological, and artistic upheaval, and yet a time of enormous confidence and optimism for the future. The long Edwardian summer gave rise to a generation of brilliant young men, scholars and athletes who sought the sublime, and who marched off to war in their idealistic thousands. The First World War destroyed both that generation and its sense of purpose, and transformed the romantic outlook into one of irony and cynicism.

I’d always wanted to write about this period, but when the first idea for Overseas formed in my brain, it was a First World War infantry officer walking the streets of contemporary Manhattan. It took some time for me to realize that in Julian and Kate, the woman he loves, I had the makings of a literal clash between the world of 1914 and the world that came after; I could tell this tale in the most compelling way of all: a really great, immersive love story.

Why is this your first published book? How many did you write before? I wrote two other manuscripts before Overseas, both of which were set in the period before the First World War. The first had a compelling story with dull characters; the second had interesting characters but a dull story. I certainly never expected a time travel novel to be my first sale!

What’s your writing process? I used to slog along at a steady pace, but with Overseas, by the time the plot had fully formed in my mind, I was so deeply involved in the story that I could hardly stop writing long enough to sleep and feed my kids! I’ve found that process really works well for me, though it takes a toll physically. I let an idea sit and grow, and once I’m starting to write the scenes in my head, I know it’s time to get the words down. I’ll take six to eight weeks to draft, and then a few more weeks to edit. By that time, ideally, the next idea is taking root.

Your next published book. Set in an exclusive Rhode Island beach community in the summer before the great New England hurricane of 1938. Tentatively titled “A Storm Is Rising.”

The last book you read that you loved. I’m ashamed to say that I only recently discovered Meredith Duran, and spent a wonderful two weeks devouring her backlist. At Your Pleasure was fantastic, a fresh and compelling historical period for the romance genre.

The last book you read for research. I was dissatisfied with my knowledge of Victorian and Edwardian sexual vocabulary, so I went to the source: a memoir called My Secret Life, by the pseudonymous “Walter”, which covers about fifty years (and about 1000 partners) in this gentleman’s single-minded pursuit of tail. A real eye-opener, and as graphic as it gets. Of course, as it turned out, I couldn’t use much of his vocabulary, which would be deeply offensive to the modern female reader!

The romance book character you most identify with. Oh, that’s a tough one! Having recently read and loved Sarah MacLean’s A Rogue By Any Other Name, I found myself really relating to Penelope: we’re both pleasers, which is a tough road to take through life, because you’re always doubting and blaming yourself. At one point I actually found myself choking up, which I almost NEVER do while reading, no matter how moved I am. So it must have hit a nerve!

You can check out more about Beatriz Williams and her books at http://www.beatrizwilliams.com

Related posts:

1. Debut Print Book: Wicked as They Come by Delilah S. Dawson
2. Debut Print Book: Don’t Let Me Go by J.H.Trumble
3. Debut Print Book: Under the Same Sky by Genevieve Graham