MobileRead Forums - View Single Post - Amazon says 'will have to capitulate and accept Macmillan's terms'

kilron · 02-01-2010, 01:10 PM

there's no anti-trust issues in agency pricing. the publishers own the content and they can sell it for whatever they want. its that simple. your correlation to physical goods doesn't work (clothes, appliances, etc.) because physical goods are much more complex, but if they wanted to, manufacturers could do that as well. its just that with very small data sized electronic content, the agency model is ideal. but there's no anti-trust issues there. if you own something that is for sale, you're entitled to sell it for whatever price you want. period.

what you leave out in explaining agency pricing vs. retail pricing is that neither of those was explicitly what amazon was doing with their kindle ebooks. in short though, they were more or less doing agency pricing, but with the percentages flipped so that amazon kept 70%, and also dictated pricing, thus completely screwing the publishers. amazon could make their ebooks less expensive than the physical books, make the majority of the profit and the publishers were left with no other coice. if you wanted a better cut like 50% then you had to guarantee amazon exclusivity and other things.

apple entering this business is what the publishers have been waiting for, though if agency pricing really takes hold, it could just as easily bring about a new wave of self-publishing as well, which also would be a very good thing in some ways.

02-01-2010, 01:10 PM	#121
kilron Connoisseur Posts: 87 Karma: 150 Join Date: Jan 2010 Device: iPod touch	there's no anti-trust issues in agency pricing. the publishers own the content and they can sell it for whatever they want. its that simple. your correlation to physical goods doesn't work (clothes, appliances, etc.) because physical goods are much more complex, but if they wanted to, manufacturers could do that as well. its just that with very small data sized electronic content, the agency model is ideal. but there's no anti-trust issues there. if you own something that is for sale, you're entitled to sell it for whatever price you want. period. what you leave out in explaining agency pricing vs. retail pricing is that neither of those was explicitly what amazon was doing with their kindle ebooks. in short though, they were more or less doing agency pricing, but with the percentages flipped so that amazon kept 70%, and also dictated pricing, thus completely screwing the publishers. amazon could make their ebooks less expensive than the physical books, make the majority of the profit and the publishers were left with no other coice. if you wanted a better cut like 50% then you had to guarantee amazon exclusivity and other things. apple entering this business is what the publishers have been waiting for, though if agency pricing really takes hold, it could just as easily bring about a new wave of self-publishing as well, which also would be a very good thing in some ways. Last edited by kilron; 02-01-2010 at 01:15 PM.