Manatt Digital Media Ventures CEO Comments on Apple's Loss in Price-Fixing Case

"Novels, Tunes and Flicks: Apple Ruling Changes the Game"
Globe and Mail

July 11, 2013 - Manatt's Peter Csathy, chief executive officer of Manatt Digital Media Ventures, spoke to Globe and Mail about how Apple Inc.'s loss in a landmark price-fixing case could change the way all digital entertainment is bought and sold.

Globe and Mail, a Canadian news publication, reports that a New York district judge ruled Apple guilty of breaking antitrust law by colluding to raise the price of e-books. Prosecutors alleged that Apple teamed up with five U.S. publishers to effectively eliminate the price competition in the e-books industry. Apple's arrangement with the publishers - revenue splitting and the retailers' right to cut prices - have become a vital part of how Apple and many other content-selling companies do business.

Csathy told the publication that the ruling, if it stands, could hurt companies that buy and then make available to consumers one type of content, such as online video site Hulu. Those companies, he said, need the price of content to be high enough to make a profit - something that's more feasible with the generally higher and uniform prices set by publishers under the agency model. Meanwhile, Amazon can afford to sell e-books and other content at lower prices because their aim is to get consumers into their wider ecosystem of products and services.

"There is a lot at stake, and it may very well go beyond the realm of e-books and spill over into other forms of online media, including premium video," Mr. Csathy said. "Smaller distributors of content may have a more challenging marketplace if Apple's agency model is struck down."

Read the article here.