Amazon's In Luck: Some Major Publishers Not Sold On Kindle "Agency" Model

[Sonist]

From TBI Research:

"... one major book publisher we spoke with sees no reason to shift to that model right now or anytime in the near future.

The reason is that book publishers make less money from the agency model than they do from the traditional wholesale model (in which Amazon buys a book license at the full wholesale price, and then sells each copy for whatever it wants, often losing money on the sale). The agency model, therefore, also leaves publishers less money to pay authors and agents.

According to one executive we spoke with, it's also still unclear if Amazon will continue to command its dominant 90% share of the e-book market, so there isn't much reason to set a precedent by adopting a model that makes everyone less money per book...."

[kennyc]

Wonderful. Thank you for sharing this!


Another article at the bottom of that one:

http://www.tbiresearch.com/amazon-se...e-books-2010-1

Not sure if I believe it, but the claim is that Amazon has 90% of the ebook market.

[kjk]

Isn't that Random House?

edit: http://www.mobileread.com/forums/showthread.php?t=72803

[Bremen Cole]

It is good to see some reasons for hope....

90% share.... hmmmm..... A couple of beers and you could probably talk me into a 75% share... not not 90%....

[Alisa]

Maybe 90% of the US market. I doubt it's 90% globally.

[lilac_jive]

I doubt it even has 90% of the US market, to be honest.

[Sonist]

I think they base the 90% on what "publishers and distributors" told them.

This article points to 60% Kindle share of the e-reader market, but at least some people buy ebooks from Amazon even if they own a different reader, because of the lower prices. Interesting factoid about Christmas day ebook sales outnumbering pbook sales:

"... On Christmas Day, for the first time ever, customers purchased more Kindle books than physical books," Amazon said.

Amazon e-books can also be read on Apple iPhone or iPod Touch devices. The Kindle online store boasts a library of 390,000 digitized books for sale.

While Amazon has not released figures for Kindle sales, Forrester Research estimated in October that the Kindle has a nearly 60 percent share of the US market, followed by the Sony Reader with 35 percent...."

[jgaiser]

And since Amazon doesn't report *any* sales figures, any share report is a WAG...

[fugazied]

Originally Posted by jgaiser

And since Amazon doesn't report *any* sales figures, any share report is a WAG...

Exactly. We know it's popular and probably more than 1 million have been sold. That's about it.

It's a good sign though, all it takes is 5-6 publishers happy with what Amazon is doing and we'll have better price competition in the market.

I just really hope that the iPad's epub support will be able to read ANY kind of epub and not locked into some highly regulated DRM version of epub. We need at least 4-5 devices that are epub capable and 4-5 major e-book retailers that sell e-books that work on all kinds of major platforms, THEN we will have decent price competition.

[tomsem]

Where does the term 'agency model' come from? I get that in this case it means the publisher effectively retains ownership of the ebook, sets the price, and pays a commission to the retailer, but why not just say that the books are offered on consignment or some such less jargon-y language. Is this MBA-speak?

[tomsem]

Originally Posted by fugazied

I just really hope that the iPad's epub support will be able to read ANY kind of epub and not locked into some highly regulated DRM version of epub. We need at least 4-5 devices that are epub capable and 4-5 major e-book retailers that sell e-books that work on all kinds of major platforms, THEN we will have decent price competition.

Not likely, I think it has been more or less established that iBooks uses Apple DRM - they have definitely not licensed Adobe's DRM, for example. But there will be iPad apps to access other online bookstores, including Kindle, txtr, etc., unless Apple bans them (a possibility, but IMO unlikely).

So while it would be nice not to have to have 6 different apps to read 6 different collections of books, I think that's likely to be how it will work on iPad. Portability between devices will not be achieved except by each bookstore offering reader apps for each, as many are starting to do.

[Pardoz]

Originally Posted by tomsem

Where does the term 'agency model' come from?

Simple - the person handling the details is acting as an agent for the real seller (the publisher, in this case). Think of buying or selling a house - lots of people go through a real estate agent, thus agency model.

[da_jane]

Most important is that under the agency model, the retailer cannot discount without the consent/approval of the principal (which is the publisher in this instance).

[kovidgoyal]

Now all that's needed is an agency model between author and publishers. That should be the beginning of the end.

[kennyc]

Originally Posted by kovidgoyal

Now all that's needed is an agency model between author and publishers. That should be the beginning of the end.

Yep. This is what I'm hoping for but it's not likely to happen. (as I'm sure you know).