One bad Apple don’t spoil…on second thought
On April 11, the US Department of Justice filed suit against Apple and five of the largest US trade publishers over what’s called the Agency Model and e-book pricing.
What does that mean for authors?
First, let me briefly tell you what the Agency Model did.
In the old “Wholesale Model” (which is how paperbooks work), a retailer like Amazon bought the books from the publisher, usually at half the list price (set by the publisher), and then resold them to customers for whatever they wanted.
In the Agency Model, the publisher sells the books to the customer for the price the publisher sets…the former retailer just processes the sale, acting as an “agent” for the publisher (that’s why it’s called the Agency Model).
The publishers involved raised the prices on New York Times bestselling hardback equivalents: where Amazon had generally been selling them for $9.99, the Agency Model raised them to $12.99 and more (usually).
It also, significantly, meant that Amazon and other former retailers couldn’t discount the Agency Model books.
That created a huge opening for independent publishers (and if you are an author who makes your books available to the public, you are a publisher).
If this suit puts the pricing power back in the retailers’ hands, that changes the whole dynamic.
Amazon could price a new Stephen King at $2.99 (even if it was only for a day or two), changing who your competitors are at that price.
Amazon could feature traditional publishers’ books in the way they now feature non-Agency Model books (in the 100 books for $3.99 or less, for example).
Overall, if the suit gets rid of the Agency Model (and some publishers have already settled), it’s good for readers, and probably good for the e-book market all together.
Is it good for indies, though?
Time will tell, but it could level the playing field. Yes, the tradpubs had hobbled themselves by taking on a pricing disadvantage, but with that gone, it’s a whole different race.
Another change is that Amazon has really been pushing doing their own traditional publishing, in part to get around the publishers, in my opinion, because the publishers reduced Amazon’s control over the process. That has worked well for them: it will be interesting to see if they continue that big push if the Agency Model becomes irrelevant and that part of the process (but not the market) returns to what it was before.
Does Amazon continue AmazonEncore, which has taken independently published books and made them much more prominent? My guess is yes…so that opening may still be there for you.
Bottom line: things are constantly changing in complex ways. Stay tuned…
That is one of my “splinterviews” (where I interview myself)…it was done some time ago, but it will give you a better sense of what the Agency Model means. It was written for consumers.
If you are into the legalese, that’s the actual filing, published by the Wall Street Journal.
Recent posts in the I Love My Kindle blog which may be of particular interest to WG2E readers:
- Five words I never thought I’d say: “I have enough to read” (Are people not driven to buy in the same way they used to be?)
- Sales versus borrows versus giveaways (Some analysis of my own patterns)
- Why are you paying for e-books? (I poll my readers: why do they ever choose to pay for a book?)
- Tweading in the bookstream (A new live chat feature in every Kindle book on the Kindle Fire)
- Snapshot April 1, 2012 (My monthly statistical analysis of the Kindle store: sounds like fun, right?)
- Amazon updates updating (What happens when you upload an updated version of your book? It’s changed)
- Downward trend in the Kindle Owners’ Lending Library (Are you in KDP Select? Interesting numbers…)
Bufo Calvin is the author of the popular I Love My Kindle blog and six titles in the Kindle store, including the #1 bestseller Love Your Kindle Fire: The ILMK Guide to Amazon’s Entertablet. Bufo is proud to be a part of the WG2E family.