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Old 07-24-2012, 05:55 AM   #1
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Is agency pricing the future of ebook selling? (for example in 2017)

5 years from now, will agency pricing be the norm? (fixed prices at every ebook retailers)?

In __ years from now, it might be in Amazon best interest to get 30% commission instead of "very low" margin.

Right now, Amazon is fighting agency pricing because it slow down the adoption of ebook. But when ebook adoption nears its climax (say 70% ebook, 30% physical book), agency pricing might be Amazon's best interest (wouldn't you want 30% instead of just 3%)?


My thinking:

Amazon might wanted agency pricing all along. They just disagree with the publishers on the "when."

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Old 07-24-2012, 08:01 AM   #2
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Could be.
Agency serves to protect entrenched players and keep out newcomers so, while I expect Amazon will never publicly endorse it, they might "grudgingly" go along and let the publishers be the fall guys... just as they did this time.

Everybody harps on the market share that B&N allegedly "took" from Amazon during the price fix when the reality is their share has been flat ever since it was *implemented*.
By the time the price fix was fully implemented B&N already had their 25% market share.
Lost in the noise is that Amazon benefited more from the price fix than B&N. And they used the money they got from it more wisely.
One thing the price fix did do was let B&N, Kobo, and Amazon sell their reader devices at near cost and lock out the hardware-only vendors from the US market so all new reader buyer would be automatically sorted to Gryfindor, Slytherin, or whatever...

There has been an explosion of ereader adoption but everybody except Amazon and Nook is stuck at barely measurable hardware sales levels.

Five years down the road?
Too far out to tell, really.

First we need to see if DRM-free is a real magic bullet.
Whether multipurpose really displaces dedicated reader devices.
Whether a viable color emag market emerges.
How post-PC the "Post-PC" era really is. (Hunch: tablets are peaking right about... now... 2012-13)

Above all, how far ebook tech goes into education, academia, and the corporate world.

eBooks so far are primarily about narrative text and recreational reading. The really big money is still elsewhere.
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Old 07-24-2012, 12:01 PM   #3
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Anything that prevents discounting will kill the industry (that part of it which prices high and prevents discounting, at least).

Of my favourite books and authors, the proportion that I was introduced to by buying a full-price book is vanishingly small. Libraries, personal loans, second-hand books, promotional offers, damaged/discounted books and remainders account for nearly all of my first encounters with my favourite works.

If any kind of agency model is to work, they need to allow vendors room to do special offers.

It would only really work if they killed off paper. I've bought two books as used paperbacks in the last few weeks that were on my Kindle wish list at a price I wasn't willing to pay. (And of course, they already exist. They'll still exist as long as I, and subsequent owners, take care of them.)
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Old 07-24-2012, 01:07 PM   #4
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Anything that prevents discounting will kill the industry (that part of it which prices high and prevents discounting, at least).

If any kind of agency model is to work, they need to allow vendors room to do special offers.
Not necessarily.
Agency already killed/crippled quite a few vendors.
The publishers didn't care. The *intent* of Agency is to limit competition at the retail level so for it to "work" it *can't* allow special offers.

Remember, Agency pricing isn't about helping consumers but about maximizing long term income. Getting people out of the habit of looking/waiting for discounts.

That said, Agency is not inherently incompatible with low prices.
Amazon KDP ebooks are all agency priced, reasonably priced, and since they are Amazon exclusive there is no need or room for price competition. Of course, Amazon Agency pricing runs $2.99 to 6.99 for the most part, not $12.99-14.99.

Again; the feds beef isn't with Agency Itself, but with the conspiracy to raise prices. If they had conspired to *lower* them they would've been the toast of the town.
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Old 07-24-2012, 01:26 PM   #5
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Agency pricing from the publisher's bookstores will be the norm in 2017.
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Old 07-24-2012, 02:30 PM   #6
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Agency pricing from the publisher's bookstores will be the norm in 2017.
I won't be buying from them.
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Old 07-24-2012, 03:34 PM   #7
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I won't be looking at their sites much either. I like Baen's books and prices but when I turn on my computer I go to Amazon. I might take a look at other sites once a month or less. If I remember.
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Old 07-24-2012, 09:18 PM   #8
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I think agency pricing will decline.

It depends on the consumer market. I am not talking voting with your market, just that things will level off and more likely than not the result will be lower pricing.

People (companies) may collude for a while, but eventually someone will break ranks and try to undercut the others, or screw them up in some way. It is human nature and corporate nature. It is possibly the only reason we do not have fixed pricing in all areas of commerce.

Of course I could be wrong with the price of some commodities such as gas always rising above the general rates of inflation, but I do not see it with books.

Helen
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Old 07-24-2012, 09:38 PM   #9
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I won't be buying from them.
Likewise ... Today I spent a bit of money at smashwords tho...
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Old 07-24-2012, 10:59 PM   #10
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Depends on a variety of factors.

Could it be abused? Yes. But so can any other system.

From a publisher's perspective, Apple's agency pricing terms (70% royalties to publishers) was a boon. At the time, Amazon was only offering 35% royalties.

Of course this is also be tempered by the fact that Amazon has various terms that significantly favor the price point they want for the consumer. For example, publishers only receive 70% royalties from Amazon for books priced between $2.99 ~ $9.99 (with caveats... if the buy is outside of the US and select countries, it goes down to 35%). That's why Amazon is generally a bad ecosystem for eBooks priced above $9.99. It's why Baen's eBook bundles aren't stocked there. Or why some nonfiction books aren't available at Amazon.

Amazon in general though has played the long-term game. It was founded in 1996 and didn't make a profit until 2003.
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Old 07-27-2012, 04:12 PM   #11
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Agency pricing from the publisher's bookstores will be the norm in 2017.
If it's at the publisher's store, there's no agent involved. Publisher sets the price & gets all the profit.

I don't think undiscountable ebooks are going to be majority-standard in a few years. While some countries have undiscountable pbooks, they also have used and loaner pbook markets, and the hard facts of physics to deal with: any one store can only carry so many books, so they can compete on selection, if not price.

With selection near-infinite (hypothetically) for an ebook store, and used & long-term loaned books unavailable (legitimately), there'll be too much pressure to make prices flexible.

Stores won't want to shut out customers who would buy at 20% off. Apple is happy to have take-it-or-leave-it prices because they want to focus on hardware, not content; other bookstores want to be able to offer seasonal bargains and other specials to draw in customers.

What I hope happens is a standard of 70% of list price being the wholesale standard for ebooks, and stores can discount all they want, as long as they pay the provider 70% of the SRP. There's no reason to have the wholesale price be 50%, because the store isn't carrying anything like the risks that pbook stores carry. (I could hope for 85%--the Smashwords model--but I know the difference between "a dream" and "a delusion.")
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Old 07-28-2012, 01:44 AM   #12
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Is Amazon actually fighting agency pricing at the moment? Amazon is always the company mentioned a thousand times in every reference to agency pricing and the DOJ law suit etc.. but are they currently making any statements one way or the other?

Just curious because most of the commentary I see is coming from other sources.
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Old 07-30-2012, 12:59 AM   #13
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Is Amazon actually fighting agency pricing at the moment? Amazon is always the company mentioned a thousand times in every reference to agency pricing and the DOJ law suit etc.. but are they currently making any statements one way or the other?

Just curious because most of the commentary I see is coming from other sources.
Well, first off, I think mentioning Amazon's actions as defense for the DOJ misses the point; Amazon's not on trial but the publisher's after all.

As for Amazon fighting Agency Pricing, depends on what you mean by fighting.

Right now, Amazon is earning from Agency Pricing (at least from the sale of eBooks; we don't know if Kindles are loss-leaders or actually churning out a profit from them).

Before Amazon switched to Agency Pricing (and giving publishers the 70% royalty option) for the Big Six, they did fight tooth-and-nail against it. Macmillan (http://us.macmillan.com/NewsDetails.aspx?id=18537) was one of the first publishers negotiating to do so and Amazon had a "glitch" where all Macmillan titles suddenly disappeared from their store over the weekend (and around a week for everything to return to normal).

Other publishers selling their eBooks on Amazon are still under the wholesale model (http://mhpbooks.com/done_do-indies-want-agency-terms/).

It's also contrary to the rest of Amazon's business system which follows the wholesale model (although they've also proven time and again that they're willing to sell products at a loss in exchange for future consumer loyalty).

But if you're asking whether recently, they've had any open propaganda to switch back to the previous model, then no.
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