Nobody has missed the fact that all three of these publishers were listed up there on that big screen behind Steve Jobs at the iPad launch, and few expect that the remaining two (Penguin and Simon & Schuster) will be far behind. Again, I have to wonder whether the publishers’ commitments to Apple include at least an attempt to renegotiate their existing deals in order to protect the iBook Store. And again, it’s not like Apple would be twisting any arms here: this is clearly something the publishers think they want.

Amazon has copped a bit of ridicule over the terms of its surrender:

We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles

…particularly from people who think Amazon has a pretty tidy monopoly itself or is trying its best to establish one. Through its sorrow and betrayal Amazon hasn’t expressed itself very elegantly, but it’s getting at something interesting, I think: something that shouldn’t be dismissed out of hand.

After all, Macmillan does have a certain kind of monopoly over its own books: it’s the monopoly provided by the copyright system. That’s not the kind of monopoly recognised by microeconomics or competition law or even by everyday usage, which is more to do with the ability to control and dominate markets. But the two aren’t unrelated. Books and other cultural goods are different from other kinds of commodities, have fewer true substitutes, and may come a little closer to forming the elusive single-product markets that are often argued and never accepted.

In any case, it’s clear that if Amazon ever had a lot of market power in the distribution of electronic books, it doesn’t now. It’s always had competitors and now it has Apple, in this market probably the most chilling competitor imaginable. The publishers have a good deal of countervailing power since everyone knows that to survive as a mainstream bookstore Amazon has to carry all the books, electronic and otherwise—and to survive as a product the Kindle definitely has to have access to all the e-books (ask HD DVD).

Many have argued that Amazon is only in the business of e-books so it can sell Kindles, pointing to the fact that under the current model Amazon makes a loss on most Kindle books. This is thought to be nefarious and Microsoftine, but really it’s only a problem if Amazon already has a monopoly in either market. Otherwise it’s just a competing value proposition: Kindles are expensive but you get cheap books, and it’s up to you to decide what’s more important. It’s like buying a printer that’s going to need refills, or a mobile phone that needs a cellular connection. It’s not always easy to know which is the best deal in the long run, but it’s good to have a choice.

I don’t have any problem with the graduated pricing model proposed by Macmillan, where books may start out more expensive but become cheaper over time. That’s the way it’s always been in conventional publishing, and it’s the way it should be: everyone has either time or money, so everyone gets to read the book sooner or later. But you don’t need an agency arrangement to achieve that: if the retail market is competitive, adjustments to the wholesale price will be reflected down the line. And an agency arrangement forecloses the possibility of a competitive retail market—especially if you apply it across the board, as at least Macmillan and Hachette say they’re doing.

Back when the Internet was first commercialised there was a lot of talk about disintermediation or “cutting out the middleman”. But middlemen have their uses; they have more power against suppliers than we have, and we have more influence on them than we would on suppliers. Even in disintermediated industries like travel and insurance, new middlemen have risen up to help us compare all the options and save time and money.

The bookseller is, of course, the world’s most important and beloved middleman—in the real world, at least, and why not online as well? Is an electronic book so different from a physical book? I would have to argue that it’s not: the book itself, and not what it’s made of, is the essential thing. And I’d prefer to see all of them sold in different ways by different people at different prices. Otherwise Macmillan and the others really might as well have their own monopolies.

Apple is asking publishers to set two e-book price points for hardcover best sellers: $12.99 and $14.99, with fewer titles offered at $9.99. In setting their own e-book prices, publishers would avoid the threat of heavy discounting. Apple would take a 30% cut of the book price, with publishers receiving the remaining 70%.

This is quite a bit higher than the $9.99 Amazon charges for most of its mainstream Kindle titles. The WSJ’s Walt Mossberg had the chance to ask Steve Jobs directly about pricing, with interesting results:

Why should she buy a book for $14.99 on your device when she can buy one for $9.99 on Amazon on the Kindle or from Barnes & Noble on the Nook?
Well that won’t be the case…

You mean you won’t be $14.99 or they won’t be $9.99?
Uh… the prices will be the same… Publishers are actually withholding their books from Amazon because they’re not happy.

Optimistic pundits took this to mean that iBooks would sell for $9.99, even though the one featured most prominently in Steve Jobs’s demo, Ted Kennedy’s True Compass: A Memoir, seemed to be priced at $14.99, and some of the other books cost $10.99 or $12.99.

But it now seems more likely that Jobs’s first answer means what Mossberg was clearly worried it would mean: the prices will be the same because Amazon prices will be forced up.

A couple of days ago Amazon stopped directly selling the print and electronic editions of all Macmillan titles, though you can still buy the print versions through Amazon Marketplace. Macmillan CEO John Sargent explained yesterday that Amazon had dropped the titles in response to Macmillan’s new distribution deal, under which if Amazon wanted to offer electronic editions at the same time as print editions (without “extensive and deep windowing of titles”), it would need to adopt a new “agency” model of distribution:

Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.

Traditionally, publishers have been prevented from controlling the retail price of books by the prohibition against resale price maintenance in many jurisdictions. Resale price maintenance hasn’t been per se illegal in the US since 2007’s Leegin Creative Leather Products v PSKS 511 US 877, though it will still be illegal if it imposes an unreasonable restraint, and is still per se illegal in places like Australia. But an arrangement of agency, rather than sale and resale, can avoid these restrictions and give the publisher full control of the final price to consumers.

Eagle-eyed readers will notice that Macmillan is one of the publishers featured in the Apple keynote address, and the alignment of prices and rumours terms makes it pretty clear that at least the following has happened: Macmillan found that it could get a better deal selling through Apple, and is now looking for the same deal for all of its electronic books. There’s no evidence that Apple encouraged Macmillan to increase its prices through Amazon—Macmillan wouldn’t need any encouragement—but the increase would certainly benefit Apple for the reason Walt Mossberg identified right away, and the whole thing makes Steve’s response a little prescient and creepy.

It’s a pretty screwy situation where the introduction of a new competitor has the effect of increasing prices, and as Macmillan author Cory Doctorow points out it’s a problem of concentration at the levels of both production and distribution. Books (and movies and music and so on) are economically a little weird anyway, since in some sense every book occupies its own market and has no close substitutes: if you want True Compass you’re not going to buy The Golden Compass just because it’s cheaper. Since there’s only muted price competition between books themselves, we rely on price competition for each book at the retail level.

And even though retail physical bookselling is also fairly concentrated, it’s still the most competitive part of the supply chain, and with up to 40% of the cover price going to the retailer there’s a lot of room for different business models, improvements in efficiency, and real bargains for readers who want to shop around. With electronic books it’s a slightly different story, since the cost of distribution is very low (and the marginal cost of distribution is zero), but there’s still a lot a retailer can do to differentiate itself: offer a subscription model (like Amazon offers through Audible), bundle e-books with your 3G data plan, and other things I can’t think of because I don’t have an MBA. Publishers should demand and receive a fair wholesale price, but consumers need choice and competition at the retail level. It seems to me that insisting on an agency model threatens to foreclose this competition and could stifle innovation right when the emerging industry needs it. It’s only one publisher so far, and only one territory, but it’s worth keeping an eye on.

There are some pretty interesting things about the iPad for readers and writers. There’s no coloured electronic ink or active-matrix organic LED display, just a 9.7″ LCD with in-plane switching for a reasonably wide viewing angle. The video geeks are up in arms (though occasionally confused) that the display is 1024 by 768 pixels in a 1.33:1 aspect ratio, the same as the big old TV sets we all used to have, so that the old episodes of Star Trek will fill the screen nicely but the new episodes (at 1.78:1) will have big black bars and the movies (at 2.35:1) will have even bigger black bars. This is even chubbier than the iPhone, which at 1.5:1 will leave either horizontal or vertical black bars for almost any video, but it seems reasonably well suited to reading books and magazines. It sits between the US Letter (1.29:1) and A-series (1.41:1) paper sizes and is just a bit squarer than your common B-format (1.52:1) paperback. All of this makes the iPad look slightly more like a thing for reading words than for watching videos, though it should also play videos pretty well despite the black bars.

Of course, films and videos have fixed dimensions and can’t be reformatted without making everybody fat or skinny. An electronic book can also be presented in a fixed format, like a PDF, or else in a “reflowable” format where the text is formatted to fill whatever space you have, with whatever font and pitch you choose. A fixed format is good where you have a lot of images, and also takes care of the rags, widows and orphans that typesetters and editors are so keen to control; but a reflowable format can be shared more easily across a variety of devices with different shapes and sizes, and is probably more useful for everyone but purists.

Apple has chosen not to invent its own format (as Amazon did for its Kindle) but to adopt the EPUB format developed by the International Digital Publishing Forum. EPUB is a collection of open standards that Apple may or may not combine with its own proprietary digital rights management system. At the moment, music from the iTunes Store are DRM-free but movies and TV shows are DRM-laden, as are applications from the App Store. There’s no word yet on whether iBooks from the iBook Store will be restricted, but on past performance there’s a good chance. It’s not yet clear that iBooks will sync back to your computer so you can read them there, or on iPhone or iPod Touch, let alone on another non-Apple device, but I’m thinking they’ll give us that at least. And the fact that the iPad uses EPUB is a positive step as it should mean that you can read a wide variety of e-books from other sources, including the public domain, in a decent format.

EPUB is a reflowable format, which means that iBooks won’t be properly typeset like real books but will more or less fill a screen that has more or less the same dimensions as a real book. From the screenshots there’s a bit of trompe l’oeil thrown in to make it look a bit like you’ve got a stack of pages curving away from a gutter, and when you turn the page it looks a bit like you’re really turning a page. I’m not sure that I care about this at all, or that I like the mock bookshelf that holds your purchases. I love book covers but would be happy to see them just sitting there like movie posters or album covers already do. I think that typeface and layout are very important and can be adequately translated to the digital realm, but physical pages and bookshelves can’t really be reproduced on a screen and it might be better to come up with a new metaphor. However, this might be a useful intermediate step for people who are still uneasy about reading books on a screen. And it might in fact make some important psychological difference that Apple has spent way more time and money researching than I ever would.

While the Kindle comes with an international 3G wireless connection effectively built into the price of the books, the iPad comes in two series: one that only has Wi-Fi and will be available internationally at the end of March, and one with a 3G radio that will be available in the US at the end of April and elsewhere from June or July. Apple has organised an “unlimited” data plan with AT&T for $30 a month, which is a lot less of a bargain than Steve Jobs seems to think but is at least pre-paid with no contract. Steve did say that the device is unlocked so theoretically you could get a separate data plan, or even swap out the SIM card from your existing handset—apparently the iPad only accepts the “new” microSIM format, but there may be clever adapters available if the electronics are the same, which it looks like they are.

The best solution is to allow tethering between the iPad and your existing mobile device, such as an iPhone. AT&T still doesn’t offer iPhone tethering, partly because they offer “unlimited” data plans and tethering would wreck the pricing models. But many carriers in other parts of the world sell tiered or limited data plans and have chosen to offer iPhone tethering for free or for a (mostly) reasonable price, and it works seamlessly over USB or Bluetooth. The iPad has Bluetooth and could certainly be made to use the iPhone’s data connection where tethering was offered. Of course, a jailbroken iPhone can be tethered over Wi-Fi, which the iPad would treat like any other Wi-Fi network. I’d say Apple would be doing the non-AT&T carriers a favour by encouraging us to pay the extra for official tethering, rather than forcing us to jailbreak and get it for free.

Outside of the US most of us spend a lot of time out of Wi-Fi range, so cellular wireless is pretty important for a device aimed not only at books but at magazines, regularly-updated news sources and general browsing—especially when, as I suggested earlier, having a live Internet connection could be a big part of what makes electronic books competitive with paper books. But it seems stupid to have multiple data plans when you could easily share the one. We’ll have to wait and see what the international carriers are offering, but I dearly hope they see the sense in tethering. If I do buy an iPad I don’t think it’ll be a 3G-enabled one; and if tethering is supported then I think I’ll buy one.

I never thought I would have considered a tablet computer or e-book reader, but now I think there’s a good chance I’ll buy the Apple one. What happened to me? Honestly: it was the iPhone. Another rumour has it that the iPhone was born out of something called the “Safari Pad”, a touchscreen tablet-style device intended for web browsing that Steve Jobs finessed into the smartphone we all know and mostly love. That decision now seems to have been an inspired one, about developing the market as much as the technology.

I bought an iPhone because I already had an iPod, I listened to a lot of music and podcasts and could never get them to work seamlessly enough with whatever smartphone I hoped would solve it all for me. I just wanted to carry fewer gadgets and have more free pockets, and the iPhone fit the bill. I hadn’t ever thought of reading books on it, because that wasn’t remotely possible on either previous phones or iPods. The closest thing I’d done on either kind of device was listening to audiobooks, which I do like a lot, though I’ve always found there’s something unwieldy about them: you can’t read at your own pace, it’s hard to flip back and forward to find things you may have missed or misunderstood, you can’t copy out bits that you like.

But I got a couple of free books for the iPhone and started reading them, just because they were there and I didn’t have anything else to read on the bus or waiting in the pub. I downloaded the Shakespeare application, like most people do. I got the Kindle application and bought a book or two. I was sent a first draft of a new novel by e-mail and instead of printing it out I read it on the iPhone. It wasn’t ideal, the screen was too small, it wasn’t particularly comfortable to hold, but instead of thinking it was all rubbish and I’d go back to paperbacks, I started thinking: what if the screen were bigger? If the contrast were better? And then: what if I could easily search through the book, make notes to myself, copy and paste passages? What if, any time I didn’t know a word or a historical reference, I could just tap on it for its definition or Wikipedia entry? By being almost good enough, the iPhone suggested what would come after it, and began to persuade me that I needed something I’d never thought about before.

And then I started thinking: what if, having bought a paperback for reading around the house and making the bookshelves look good, I could pay an extra buck or two to download the electronic version? And what if the audiobook were just a couple of bucks more? (The Kindle has a text-to-speech function available for some titles, but it’s no substitute for a proper reader, who does need to be paid: I don’t know how much of the price of an audiobook goes towards its production, how much is for the underlying work.) What if I could switch between the text version and the spoken version when I had to walk somewhere, and switch back when I sat down again, or when I wanted to make a note or a quote or look something up—and it always knew where I was up to? I still think I’d favour the paper version, and use the others when circumstances demanded, but I’m not sure about that. I can imagine the convenience and versatility of the electronic versions might trump even the pleasure of paper.

At the moment I’m reading my wife’s paperback copy of Cormac McCarthy’s brutal Blood Meridian together with the audiobook version narrated by Richard Poe that I bought a while ago, and looking up many of McCarthy’s old-west names and places from my iPhone. I feel like there may be a reading experience even richer than the one we’re used to around the corner. As always, the challenge will be to make sure all the rights are dealt with effectively and realistically, to make sure creators are rewarded without stifling innovation or alienating readers. If we don’t get in our own way too much we could offer a new generation of readers something that we’ve never had before. And to have the latest McCarthy bloodfest up there on the same page, in the same search results as the latest Dexter episode or High School Musical instalment or Jay-Z protégé, just as accessible and nearly as flashy and cool—that’s got to be a good thing for the written word.

Paddy Power now has a market on what Apple will call the new product, with “iPad” almost unbackable at 1:5. I always thought it would be cute to call it the iSaac, a synthesis of the overused i-prefix with the original and much-loved Newton MessagePad that let Dolph down so badly in the picture above. But I acknowledge that that would be an extremely nerdy and unlikely name, and Paddy Power prefers even the “EtchaSketch” (at 500:1).

Last night I had the very great pleasure of catching famed jazz pianist Barney McAll with bass guy Jonathan Zwartz and drummer Simon Barker at the Macquarie Hotel. Barney was in town for some sold-out shows with the legendary Fred Wesley, but this was a more intimate acoustic gig. The piano trio is my favourite jazz combo, and I think it’s the most poetic arrangement. It seems to me to be a perfect balance, rarely showy, a real conversation.

Barney and Jonathan did the music for my stage adaptation of Solstice, with Hamish Stuart on drums and Kate Ceberano singing along. Over the years Barney has continually stretched and redefined himself, experimenting with Cuban, African and electronic influences, and trying to keep up with him has taught me a lot about music. Some of his stuff is pretty challenging, but last night he folded it all back into an old-school trio performance that soothed the mind and the soul.

Barney’s five albums are available as high-quality DRM-free downloads from his website and are well worth the $US9 each. I’m encouraged by the way musicians are using the Internet to get their work out there and get a return on them, despite some questionable moves from the industry associations. I think the publishing industry can learn a lot from the music industry, though I’m not sure exactly what yet.

The Macquarie Hotel is a labyrinth of bars all apparently playing live music at roughly the same time. Some of the classic rock from downstairs started drifting into the Ravál bar upstairs towards the end of the second set. It’s quite a new space and nicely done up with sofas and soft lighting, perfect for jazz. From my seat by the window I could see but not hear the traffic of Wentworth Avenue, and even look up into an apartment block where a few lights were on and a few silhouettes were wandering around. At one point two people in adjacent apartments leaned at the same time against their common wall; one was talking on the phone, and I don’t know what the other one was doing. Looking at them, and at the jazz—it seemed to be what a city is all about. The photo doesn’t do it any justice, but I kind of like it.

There aren’t many famous bassists—Charlie Mingus being a spectacular exception—but it’s an incredible instrument, it reaches deep inside you. It’s usually a buried pulse, occasionally let out for a brief solo, but I’ll never forget Jonathan playing a devastating, elegiac “Over the Rainbow” entirely on his bass one night in Bondi maybe ten years ago. That’s him in this sonnet from Equinox, one of my favourites, though not as good as I wanted it to be:

30/11

They book a table at the Basement
with vodka and potato wedges.
The band tonight is Hip Replacement;
the music seems to have no edges.
The bassist slows to treacle pace
and waltzes with his double bass,
cradling its neck with loving fingers,
stroking its strings. The music lingers
like heavy blossom in the air
as he sinks deeper in his solo.
Tugging the collar of his polo
he sweats and winces, unaware
of anything beyond the dance
of man and bass in mutual trance.

Thanks, guys!

I’m all kinds of excited at the news that Greek publisher Livanis has just released its edition of Vellum.

Since the novel is all about translations and different kinds of writing, I was stoked when it was first translated and I’m even more stoked now that it’s come out in a different alphabet. My first intimation that there were alphabets other than the familiar Latin one came in my second year of primary school. We had just moved from Byron Bay to Adelaide and I started halfway through the school year. I wasn’t too worried about catching up on the work; I was already well-established as a nerd (I recently got a nice e-mail from my Year 1 teacher who remembered me dictating complete sentences), but I was a bit nervous about making new friends.

So my mother bundled me off with a big bag of cherries so the kids would like me—which may have been the kind of thing that worked in Byron but wasn’t going to cut any mustard at Goodwood Primary. It was a relief to come back to the classroom after that first lonely lunchtime—until I sat down and realised that I couldn’t read any of the writing on the blackboard. I really thought my brain had broken, I could dictate complete sentences and suddenly I couldn’t read a word. And I couldn’t understand how all the other kids were able to read the words aloud. Maybe the whole school was playing a horrible trick on me? No, they were just learning Greek, as they’d been doing all year.

In an earlier draft of the novel, Jack suffered from a condition called transient pure alexia, which is a temporary acquired inability to recognise the relationship between graphemes and phonemes, letters and sounds. My description of his condition was more or less exactly my experience in the Greek class. Even after Jack’s alexia had been cured by redrafting, the dissonance he experiences on first seeing the manuscript’s unreadable writing has a lot to do with my first exposure to another alphabet.

Anyway, the Livanis edition looks great and is dotted with little footnotes added by the translator: sometimes sourcing quotes, sometimes explaining English references, other times who knows. I’m dying to know exactly what the notes mean, but I’m certain that they’re completely apposite to the themes of the book. Many thanks to Rena Lekkou-Dantou for the translation.

Over the past year I’ve had some fascinating exchanges about the book with the translator Eva Kemper. As a professional, Eva knows a lot more about the themes and subject of the book than I do, and I have no doubt that her translation will refute the old proverb by being both beautiful and faithful.

For example, late in the book there’s a quotation from Hebrews 11:5 that says, in the King James version:

By faith Enoch was translated that he should not see death; and was not found, because God had translated him.

This is the last line before Jack disappears into the desert, and of course I was trying to make a lot of hay out of the various meanings of “translate” that have been at play throughout the book. A few chapters earlier I’d also gone on about how translators like quotations, especially of the Bible, because the job has already been done for them by the translators of the original work.

But Eva pointed out that none of the German versions of Hebrews have anything to do with any of my secondary meanings of translation; they just say that old Enoch was “taken away”, like he is in most of the English versions since the KJV. So she scoured her Bibel for a more appropriate verse, and she came up with an absolute cracker in 1 Corinthians 14:10. In the King James, that verse says:

There are, it may be, so many kinds of voices in the world, and none of them is without signification.

…but in the German version it means more like “There are many kinds of languages in the world, and nothing is without language.” Which is not only better than any of the English versions, but also sums up what the book’s all about. I totally have to learn German now.

If you’ve already learned German, you can read all about the book, check out the first couple of chapters or pre-order the hardback from various online retailers via Goldmann’s official page here.

Hurra!

At 11:00 am on Tuesday 4 March I’ll be talking about Rules and How to Break Them with Paul Auster, Margo Lanagan and John Kinsella. This should be a great discussion, though I’m not sure what I’m going to contribute to it.

Then at 5:45 pm on Thursday 6 March I’m doing a Meet the Author session all on my lonesome. I suppose I’ll be talking about the early influences that made me a writer and the complicated history of my last book. I’ll also be reading various things.

Both events are in the west tent and will be followed by book signings. Please come and line up in front of me at the signing tables: there’s no need to buy my book, I’m more than happy to sign other people’s. And I’ll be hanging around all week, hoping to bump into Peter Carey, Ian McEwan, Germaine Greer and the rest of the gang.

I will be spending a virtual year in Graz, Austria, the birthplace of Claudia Chibici-Revneanu, who will be visiting Santos, Brazil, which Dani has left to explore Udine, Italy, the town that gave us Max Mauro but lost him to Mexico City, from where hails Gonzalo Soltero, who has the good fortune to be heading to Sydney. David McGuire and Florencia Abbate are swapping Hamilton, Canada and Buenos Aires—it was going to go all the way around but we lost someone along the way and had to redistribute.

Each of us will write a journal set in our assigned cities, and the sense of foreignness that attends any visit to a new place will be compounded by the fact that we’re not even visiting it. I expect the project will explore all kinds of interesting ideas about the way we inhabit cities and write about them. Or, as Dani says:

The condition of being a foreigner will be taken to the edge. The author will be such a foreigner to the place he is writing about that he won’t even know the city; he will have to find the city in his own imagination.

It should be great fun, and it all starts tomorrow at this website here.

I wrote Punch a few years ago, and soon after that Sotiris found himself in Paris and decided to shoot it there. As everybody now knows, I don’t speak much French, so the cast and crew translated my script and filmed it over a guerrilla weekend in which nobody got any sleep and at least one car crashed at the sight of the wonderful Guillaume Clémencin wandering the streets in his red wig and hilarious shoes. I wish I’d been there. The film has been in post-production for a while and is now looking fantastic. Naturally the English subtitles were an absolute walk in the park and perfectly match the writer’s intentions, which you can’t always say about subtitles.

Tonight’s screening is part of a showcase of Australian shorts and is sold out—I’ll be queueing up hoping for no-shows myself. The film is also screening on Sunday before Falkenberg Farewell, a Scandinavian feature which has something to do with “the Jar of Unexpected Tragedy”—maybe a kind of Pandora’s Box?