Class action lawyers had earlier demanded that Isaacson provide evidence, based on his interviews with Steve Jobs, about why Jobs asked publishers to sell books on Apple’s iPad device. Isaacson refused to hand over his notes and invoked a New York law that allows journalists to shield their sources in many situations.

The lawyers, who want Apple to pay for allegedly fixing book prices, had subpoenaed Isaacson and said the reporters’ shield did not apply. Last week, however, court documents show the parties agreed to drop Isaacson from the case.

The Isaacson dispute comes at a time when Apple’s antitrust showdown with the Department of Justice and class action lawyers is coming to a head. While the five publishers who were also named as defendants decided to settle, Apple is rejecting the accusations that it acted as the hub for an illegal conspiracy to raise book prices and thwart Amazon. Meanwhile, Amazon executives are poised to testify against Apple.

Even though the Isaacson biography is no longer part of the case, a court transcript shows Steve Jobs will remain a central figure. In response to a question about who decided to sign contracts with book publishers, Apple executive Keith Moerer said, “Ultimately, I would say it was — Steve. But working closely with — with Eddy, Mr. Cue.”

Meanwhile, other recently filed court documents identify one recipient of a highly publicized Jobs email about Amazon and pricing — the recipient was James Murdoch, a senior executive at News Corp, parent company of HarperCollins. The other recipient(s) are still redacted. You can see the email below:

Steve Jobs Emails by

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And so it’s not surprising that the word “design” gets thrown around a lot now as the reason for a brilliant success, or the excuse for a fantastic failure — especially when it gets to be that time of year when Apple announces its newest products. From a commercial perspective, the iPhone 5 has already been a resounding success. But on the matter of its design compared to the iPhone 4, it seems the jury is still out.

Watching the chatter from my perch as President of RISD, the more people talk about its design, the more I wonder if we designers have done a good enough job explaining what “design” really means. I believe the passionate incrementalism of the iPhone 5 is just as important a design accomplishment as the original breakthrough of its predecessors.

Let me explain. Sometimes design is about making something that’s never been seen before. It’s like Steve Jobs said — you can’t ask people what they want, you need to design it and show it to them. The result can sometimes be a quantum leap, an epiphany that comes to life as an object or experience nobody in their right mind could have imagined before. Great designers can stretch us towards the limits of our comfort, and then create a new comfortable place where we didn’t expect to find one. Often, however, design breakthroughs are achieved in a less revolutionary sort of way. Great design can be about refining, or “perfecting.”

For example, think of the Sony Walkman — the first portable device that enabled you to listen to the music you wanted on the go, in all of its stereophonic glory, within the comfort of your own head. You no longer had to surrender your mind to whatever was playing on your pocket radio. The Walkman symbolized freedom and established a cocoon around you to help you achieve tighter isolation from your surroundings. After all, what teenager doesn’t want to turn off the world around them?

On the other side of the coin, think of Taiichi Ohno’s Toyota Production System or any other means to pursue a 99.99966 percent level of flawlessness, and unless you’re a Six Sigma black belt, you start to yawn interminably. The quest for perfection isn’t always called out as a particularly brilliant form of design or innovation. Yet it is that kind of incessant pursuit of otherworldly excellence that ultimately grounds a designer’s ability to find new ideas much farther afield.

It is a furniture designer’s knowledge of the wood they are using — exactly which tree it came from, what layer of wood, and which side faced the sun — that results in a chair that bends in impossible angles. It is the web designer’s attention to the question of which screen resolution and what version of Javascript and which other applications might need to run in concert that results in the breakthrough mobile app.

So when you see Jony Ive talking about shaving microns off of a glass surface, or lasercutting tiny holes into aluminum, you see someone driven by one single purpose — to make the most perfect experience imaginable. There is much debate about whether the subtraction of N grams or M millimeters made the new iPhone too light or too thin, and certainly the determination of “better” is a difficult and ultimately personal one. Most importantly, the existence of this debate signifies how Apple is now reaching the apex of perfection on this slab of metal we carry around with a devotion that rivals Gollum’s to the Ring. They have achieved refinement, a critical milestone in the designer’s process of finding the next breakthrough.

Both the radical breakthrough of the Walkman and the perfection-driven refinement of the iPhone 5 represent significant design advancements, and both kinds are critical to the process of innovation. On this anniversary of Jobs’ death, I am reminded how artists — who are always asking the big questions that drive us — and designers — who are always trying to find the solutions — are the ones who obsessively navigate the difficult terrain of making us comfortable with what is new, and ultimately, making us happy.

John Maeda is president of the Rhode Island School of Design, and has been recognized as a leader in the fields of art and design. More information on his background can be found here. He will be speaking at our RoadMap event, focused on design in the age of connectedness, on November 5th in San Francisco.

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While Simon & Schuster has placed particular emphasis on online video, other publishers are also using it as a promotional tool. Reading community site Goodreads has its own video section, and website Book Riot has a separate section for book trailers. Readers and fans have come to expect “readily available and entertaining information both about their favorite authors and those they’re considering reading,” said Simon & Schuster EVP and chief digital officer Ellie Hirschhorn. “Video is now a critical part of that mix.”

Since many web users search for topics, not individual titles, Simon & Schuster has created three video channels that will appear on Roku and Blinkx. Two of the channels, “Tips on Healthy Living” and “Tips on Life and Love,” focus on videos from lifestyle and relationship authors (and have corresponding blogs), while “Book Stew” features author interviews for pop culture and general interest books.

Hirschhorn said Simon & Schuster’s most popular videos have been Walter Isaacson speaking on his book Steve Jobs (13,562 views on YouTube) and a book trailer for Hunger Games parody The Hunger Pains (over 1.5 million views on YouTube). The most successful videos, she said, provide “entertainment that is not an advertisement,” and tend to be under two minutes long.

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The ruling came after plaintiffs issued a subpoena in May that required Isaacson to hand over his source materials. Their lawyers claim his notes and interview recordings with Jobs will help establish that the late Apple founder brokered a conspiracy with publishers. In their lawsuit, the plaintiffs have already jumped on passages in Isaacon’s biography (such as Jobs saying consumers would “pay [] a little more”) to support their case.

Isaacson, a prominent historian and journalist, is willing to authenticate passages in the book. But he invoked the reporter’s privilege and refused to hand over his source material or even a list of Jobs-related documents and recordings. His lawyers then asked U.S. District Judge Denise Cote to quash the subpoena.

On July 20th, Cote agreed that Isaacson did not have to comply with the subpoena. She added, though, that the lawyers could try again if they can pass a legal test that allows the disclosure of journalists’ non-confidential material in some circumstances.

Isaacson’s attorney, Elizabeth McNamara, said in a phone interview that the class-action lawyers faced a high bar to show the “notes are highly relevant and necessary to the case.” She added that none of Isaacson’s taped recordings with Jobs discuss e-book pricing.

Plaintiffs’ lawyer Steven Berman has argued that the reporter’s privilege shouldn’t apply because Jobs didn’t ask Isaacson for confidentiality. He also claims that they can get Jobs’ information on ebooks from other sources.

The dispute comes at a time when the reporter’s privilege has been in the spotlight for the federal government’s effort to knock it down in military cases. A Virginia appeals court, for instance, is preparing to rule on whether the Justice Department can compel a Wall Street Journal reporter to testify in a case against a former CIA officer.

The Second Circuit Court of Appeals, which oversees New York courts, has affirmed the reporter’s privilege numerous times. It recently warned:

“wholesale exposure of press files … would burden the press with heavy costs of subpoena compliance, and could otherwise impair its ability to perform its duties … [it] would risk “the symbolic harm of making journalists appear to be an investigative arm of the judicial system, the government, or private parties.”

The ruling was first reported by Publishers Weekly.

(Image by Bedrin via Shutterstock)

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No changes until June at the earliest

Simon & Schuster, Hachette and HarperCollins agreed to settle with Justice. If the settlement is approved — following a 60-day comment period — those three publishers must terminate existing agreements with Apple’s iBookstore within seven days. In addition, as the Competitive Impact Statement on the settlement explains, the three settling publishers must terminate contracts with other retailers (like Amazon and Barnes & Noble) that contain any “restrictions on an e-book retailer’s ability to set the retail price of any e-book” and any most favored nation clauses. Those MFN clauses — which can be found in all agency publishers’ contracts with retailers, not just the contracts with Apple — state that no other retailer can charge a lower e-book price.

Publishers must terminate the contracts with retailers other than Apple “as soon as each contract permits” — i.e., when the contract expires — but the retailers also have the option to terminate the contracts “on just 30 days notice.” After the original contracts are terminated, the settling publishers may enter into new agreements with retailers (including Apple).

Under those new agreements, for the next two years, retailers may set, change or lower e-book prices and may offer discounts and other promotions “to encourage consumers to purchase one or more e-books.”

After two years, the settling publishers may once again enter into agency pricing agreements that restrict retailers from setting, changing, or lowering e-book prices. However, price MFN clauses are prohibited for five years.

OK, I just want to know what it means for e-book prices

Readers are likely to see lower prices on e-books published by HarperCollins, Hachette and Simon & Schuster — at least at Amazon, which expressed its glee over the settlement. But you won’t see those lower e-book prices until at least June — remember there’s that 60-day waiting period, and then publishers and retailers have to enter into new contracts. It’s in Amazon’s best interest to enact the new contracts as quickly as possible so that it can start discounting the settling publishers’ e-books, as it has said it plans to do. Other e-book retailers, like Barnes & Noble and Kobo, are likely to want to enter into new contracts quickly as well so that they are on a more even playing field with Amazon. They may not be able to afford to discount a wide range of e-books as deeply as Amazon can, but they will want that option.

As soon as the new contracts are in place (and Justice will be holding onto a copy of each of those contracts), let the discounting begin. Forrester analyst James McQuivey told Digital Book World last week that he expects Amazon to discount e-books slowly and strategically, starting with bestsellers. Publishing industry consultant Mike Shatzkin, on the other hand, believes Amazon “will do the splashiest discounting they possibly can, making the point as loudly as possible that they deliver the lowest prices to the consumer and daring their competiton to match them.”

McQuivey and Shatzkin may both be right. Amazon may not deeply discount all of the titles it carries from HarperCollins, Simon & Schuster and Hachette, but I wouldn’t be surprised to see some shockingly cheap bestsellers from those publishers — think massive summer promotions where big titles by authors like James Patterson, Jodi Picoult and Nicholas Sparks are $1.99.

Bundles, buy-one-get-one-free and more stuff you haven’t seen before

Justice notes that agency pricing “prevented e-book retailers from experimenting with innovative pricing strategies…such as offering e-books under an ‘all-you-can-read’ subscription model where consumers would pay a flat monthly fee,” bundles or buy-one-get-one-free promotions. The settlement opens the door for those types of promotions on Hachette, HarperCollins and Simon & Schuster titles.

For example, retailers could bundle frontlist and backlist titles from those publishers for a flat fee. They could offer a free e-book with the purchase of a print book. They could offer, say, romance or mystery bundles with titles from multiple publishers. They could even give e-books away for free. And, presumably, Amazon can start including Hachette, HarperCollins and Simon & Schuster titles in the Kindle Owners’ Lending Library for Amazon Prime members — if it does what it did with titles from some other publishers and pays the wholesale price each time an e-book is borrowed. (In other words, the three settling publishers wouldn’t have to agree to offer their books in the KOLL. Amazon can now just go ahead and do it.)

What about Apple’s iBookstore?

Apple’s iBookstore launched with agency pricing in effect, and it does not sell e-books from non-agency publishers. (That’s why, for instance, you still can’t find The Hunger Games — published by non-agency publisher Scholastic — in the iBookstore.) So it will be very interesting to see how Apple responds to the settlement. If it simply removes Simon & Schuster, Hachette and HarperCollins titles from its shelves without negotiating new contracts — yes, this would mean Walter Isaacson’s Steve Jobs biography, published by Simon & Schuster, would no longer be available through iTunes — it will be losing a large part of its catalog.

If Apple agrees to negotiate new contracts that don’t require agency pricing, it could also make agreements with the many publishers who have not been able to sell their books in the iBookstore before. That would mean a much wider book selection for iBookstore shoppers.

What will I see at Kobo, Barnes & Noble and other non-Amazon e-book retailers?

Barnes & Noble, Kobo and other e-book retailers will be under immense pressure to discount Hachette, HarperCollins and Simon & Schuster e-books to the same prices that Amazon offers. Keep in mind, though, that these stores have survived so far without always matching Amazon’s prices on titles from non-agency publishers. The settlement puts more titles from big bestselling authors in play, but Kobo and B&N do not necessarily have to match on every price in order to stand some ground against Amazon. (That said, the settlement makes their lives harder, not easier.)

I’d expect to see B&N and Kobo rolling out increased loyalty programs and other perks to try to keep readers shopping with them. For instance, Barnes & Noble could offer two free titles to anyone who buys a new Nook. They could start other membership, loyalty or subscription programs. Barnes & Noble already has the ability to bundle e-books with print transactions from its in-store cash registers and might start offering more e-book specials to in-store shoppers.

Barnes & Noble and Kobo could also turn their attention to the titles that Amazon is paying less attention to — say a HarperCollins backlist book. They could run special promotions or reading groups around those books. (Amazon could do this, too, of course.)

Retailers could have been doing many of these things all along, but non-Amazon players are going to feel the pressure to innovate quickly. They may get added support from the settling publishers (in terms of promotion, marketing suggestions, etc.) to the extent that that is not forbidden by the settlement.

Will DRM go away?

Many — including Ruth Curry and Emily Gould of Emily Books, here on paidContent — are arguing that publishers’ best tool against Amazon is to drop DRM on their titles. Science fiction author Charlie Stross, in a much-read post, writes, “If the major publishers switch to selling ebooks without DRM, then they can enable customers to buy books from a variety of outlets and move away from the walled garden of the Kindle store.” As GigaOM’s Mathew Ingram has argued, publishers see a feasible model for removing DRM in Pottermore.

I wouldn’t be at all surprised if at least one big-six publisher announces plans to drop DRM this year — Hachette’s Maja Thomas hinted at it recently — but the actual implementation of the new policy could take awhile as it would likely require negotiations with literary agents as well as the implementation of more robust direct sales systems from publishers’ own sites.

What doesn’t change

Agency pricing itself has not been declared illegal. Publishers who enacted agency pricing later — namely, Random House — can keep using the model. They don’t have to enter into new contracts. In addition, Macmillan and Penguin are fighting the lawsuit and can continue selling e-books under the agency model until a settlement or decision is reached (unless a judge explicitly forbids them to use the model before that).

Random House could, of course, renegotiate its contracts and remove agency pricing if it thinks that its titles will be at a disadvantage against cheaper non-agency titles from HarperCollins, Simon & Schuster and HarperCollins. But since agency pricing leaves it in Random House’s power to discount books across retailers, we might simply see deeper and more discounts coming from Random House itself.

And if Random House doesn’t deeply discount big titles from bestselling authors — but those titles stay at or near the top of bestseller lists anyway — that will support the belief that readers are willing to pay a premium for books by certain authors.

Some limits

Amazon cannot now, for example, make every single HarperCollins title it carries free (even if it were inclined to do so). When it comes time for Simon & Schuster, HarperCollins and Hachette to negotiate their new contracts, the settlement allows them to “negotiate a commitment from an e-book retailer that a retailer’s aggregate expenditure on discounts and promotions of the Settling Defendant’s e-books will not exceed the retailer’s aggregate commission under an agency agreement in which the publisher sets the e-book price and the retailer is compensated through a commission.” The settling publishers can also negotiate one-year contracts that “prevent e-book retailers from cumulatively selling that Settling Defendant’s e-books at a loss over the period of the contract.”

In other words, under that type of contract, Amazon (or any other retailer who agrees to the contract) could discount certain titles as much as it wants, or give them away for free. But it could not sell a publisher’s “entire catalogue at a sustained loss.” So if Amazon and a settling publisher sign a contract that gives Amazon a 30 percent commission on each title sold, Amazon cannot discount that publisher’s entire catalogue by more than the total amount of the commission it receives.

Bestselling author Richard Russo, Forrester’s James McQuivey and Barnes & Noble’s Jonathan Shar will be among those discussing the future of e-books at paidContent 2012, May 23 at the TimesCenter in New York, NY. Register here.

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Munster claims discussions with a “major TV component supplier” which had been contacted by Apple about its TV display parts lead him to believe Apple is still on track to introduce a dedicated television device in late 2012. However, there’s a caveat: Munster thinks if Apple can’t get a revolutionary new content model in place, then it won’t move on the market this year.

The analyst then goes on to suggest three possible scenarios that might constitute a unique Apple approach to the television market. Those potential solutions break down roughly as follows:

1. Changing the experience, not the service

In Munster’s first scenario, Apple would basically leave TV programming to existing operators and simply layer its own interface software on top, including menus, guides, DVRs and content discovery. Munster notes that Apple was expected by some to manage its own wireless network in the U.S. ahead of the iPhone launch, but instead partnered with AT&T and focused on UI and UX instead of content. Remember that apps came after the iPhone’s original introduction.

2. A hybrid content model

Apple could also partner with existing networks to offer live TV, and at the same time, deliver on-demand content from providers like Netflix, Hulu Plus or any other content partner willing to play via an App Store-style distribution channel, Munster suggests. It’s a “best of both worlds” type solution, and would probably still come complete with an overhauled UX, but might be trickier to negotiate than option number one, since it involves negotiating with two different types of content providers.

3. A la carte

Munster’s last option is a completely customizable, a la carte option that would see users subscribe to live TV packages from content providers. This would be the most revolutionary of the options in terms of the existing TV experience, but it would also involve a dazzling shift in the way providers make their content available, and the negotiations involved in doing so would be challenging, at best. In the end, there’s also no real guarantee that selective programming is what viewers are after, especially if existing, less flexible bundles from other sources cost less.

GigaOM’s Ryan Lawler wrote last year that Apple’s television effort was more about experience than about content, and described a likely outcome of Apple’s TV endeavors that pretty much mirrors Munster’s second scenario listed above.

Given the challenges involved in negotiating the third solution, I have to agree that a system that works with existing content sources, but also opens up the possibility of apps for different kinds of content makes the most sense as a solution that could still make big waves in the TV industry while also remaining realistically possible in the near-term. Which of Munster’s Apple TV predictions, if any, make the most sense to you?

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That’s better than the next bestselling book, The Litigators by John Grisham. Three times better, in fact. And it already makes the biography the 18th bestselling book of the year. Despite all that success, however, it isn’t a record-breaker, but it is the fastest-selling book since Diary of a Wimpy Kid: The Ugly Truth and Decision Points, George W. Bush’s memoir; both sold over 430,000 copies last year during the week ending Nov. 13. Nielsen BookScan uses point-of-sale data from about 12,000 retail locations across the U.S. for print book data, as well as online retailers, and also charts e-book data from “all major e-book retailers.”

I’d hazard a guess that the biography still has higher heights to climb. It is one of the fastest selling U.K. non-fiction books on record as of earlier Wednesday, for instance, with 37,244 copies sold in week one, which is very high for a biography that isn’t self-authored and being actively promoted by the writer/subject themselves. Isaacson’s book is sure to be under a Christmas tree or two this coming holiday, so we’ll see how the upcoming shopping frenzy affects its sales.

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About people, more than products

Isaacson of course covers the products that Jobs labored over with such dark intensity, but for the most part, you won’t find any information here about Apple’s gadgets or devices that isn’t available elsewhere. And while the biographer seems to have a good enough grasp on what the products are and what they do (I doubt Jobs would have let them pen the story otherwise), he’s by no means an expert.

But expert technical knowledge might actually get in the way of the story of Jobs himself, and the people who were sucked into, and often spun out of, his considerable orbit. Jobs may have seen himself as a product visionary, but the iPod, the iPhone, the Mac — those don’t define him. He and his company are largely the result of the relationships he cultivated, and how he cultivated them, and Isaacson does a good job of tracking and objectively recounting the story of an amazing number of those relationships.

A perfect example of this is Isaacson’s account of the bizarre meeting, friendship and rivalry between Jobs and John Sculley, the Apple CEO who forced Jobs out of the company in 1985. In a way, the relationship between the two is the perfect microcosm of all the contradictions Jobs embodies, and the biography tells the story in a way that keeps you raptly turning pages.

Viewing the RDF from without

Jobs was known for his ability to weave a “reality distortion field,” wherein he could convince people of something (that an impossible timeline was doable, that an untrue statement was fact) through sheer force of will. Isaacson is clearly (and admittedly) enveloped by the RDF a few times during the course of his writing, since he worked very closely with Jobs, but he also manages to get outside it and give a good sense of how it looks to those on the outside peering in.

Isaacson also does a good job of presenting a balanced look at how the RDF (along with Jobs other personality quirks) were both harmful and beneficial to him during the course of his career. He isn’t afraid to point out when Jobs was in the wrong, and actually does so even in cases where others might argue the opposite. In this way, the book avoids being just another extension of Jobs’ RDF, yet also doesn’t feel like a stiff, dispassionate account from a watcher on high; Isaacson is on the ground, and unafraid to offer his two cents, albeit not in a thrusting way, when he feels it’s merited.

Does Jobs grow, or does he cultivate?

Maybe the most interesting thing about the Jobs biography is charting Jobs’ progress and waiting for the kinds of major revelations that turned his early failures into his later successes. But this isn’t fiction, and Isaacson luckily doesn’t seem compelled to artificially manufacture a watershed epiphany at the end of Act 2 that leads directly the highs of Act 3.

Steve Jobs is a complicated human being, with many obvious faults as a human being that negatively affected his work and personal relationships throughout his life. In the beginning, they did so to disastrous effect; that’s a big part of why he was pushed out at Apple to begin with. After his return, the effects were muted, but Isaacson’s story telling does a good job of keeping you wondering what exactly has changed. Some feel that’s a weakness, but I think it’s more about Isaacson avoiding making declaratory statements about a man whose internal life is anything but simple.

One possibility that comes to mind is that Jobs himself didn’t grow much from the quick-tempered and mercurial youth who often cried when things weren’t going his way. Instead, it seems like Jobs, realizing his failings, went out of his way to surround himself with people who would be able to handle them and keep them in check. In other words, Jobs didn’t grow; he just built himself a garden perfectly suited to the type of plant he was. Here’s a quote from near the end of the book that sums up the mysterious question of whether or not Jobs experienced much personal growth during his life:

“Yes,” Jobs answered. “I did learn some things along the way.” Then, a few minutes later, he repeated it, as if to reassure [...] himself. “I did learn some things. I really did”

A human story

In the end, Isaacson’s book is a great human story. It covers a lot of ground for a book of its size, and it is neither hero-worship nor a vilification. It avoids the easy trap of just saying that the end result of what Jobs accomplished was worth the pain he caused along the way, but it also avoids saying that the human cost was too great.

Even if you’ve seen all the quotes and read the headlines, the Steve Jobs biography is well worth a read. Because as Jobs himself was fond of saying, “the journey is the reward,” and his is definitely a remarkable one.

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