[BuddyBoy]

I'm a Connelly fan, but the whole whole agency pricing model (thank YOU Mr. Jobs!) has soured me on bestselling books.

The growing e-book revolution has been scaring the pants off publishers for years. The market price of $9.99 a book was seriously cannibalizing their hardcover sales, something which had been a reliable cash cow and sustainer of many a top tier executive perk for decades. As others have indicated, the production and distribution costs do not represent but a small fraction of the costs - hardcovers are just a means by which a title goes through a "premium access" phase to satisfy the deep pocket customers, before moving to slightly less expensive to produce paperbacks, which then catches the next tier of consumers, and so on.

Worse still for them, the publishers were terrified that the market would equate the premium access value of a new book at $9.99, which is why they jumped at the agency model, even if it makes them less money.

"Less money?!" you might ask. Yuppers - before agency pricing, a number of ebooks were still sold at near-to-hardcover prices. After all discounts, Amazon was still sometimes paying the publisher more than 9.99 per book, but selling them at a loss to create both a market for their reader, and a price point perception moving forward. And that really scared the publishers.

Even as recent as 2007, ebooks were such a sideshow that they were barely worth dealing with, and higher prices could almost be justified by the marginal portion of the fixed ebook production costs, because ebook "print runs" were such low volume. Fast forward to the day when Amazon announce ebook sales were exceeding paper sales, and the clock was ticking.

In an ideal world, from a reader's perspective, the publishers would have sat down and decided to restructure their industry to capitalize on the demand, reduce the environmental impact of printing, and come up with a fair model to let content spread at a price representing a reasonable multiple of the production costs.

Yeah, like that was going to happen.

Instead, like many businesses, they're trying to hold on to their profitability, keep their "showpiece" hard-copy product from becoming irrelevant, and basically "make it 1997 again through science and/or magic."

And Amazon, now making 30% on books it took a loss on while it's reader's were $350, now shakes it's head sadly at the greed of the publishers, while at the same time crying all the way to the bank.

Oh, and for giggles sometime, go through the pricing of all the NYT bestsellers available for the Kindle. You'll see in most cases, especially for the Agency 6, the ebook price is as much as or more than the lowest available paper price, including those books in paperback.