Quote:
Originally Posted by leebase
It will be very interesting to watch -- and to see how this "agency model" gets past the "price fixing" laws. I seriously doubt the agency rules will prevent "customer loyalty" programs like micro pay. If anything, more sites will be resorting to such schemes as a way to lower price without "lowering the price".
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Agency models aren't considered price fixing; they're a different relationship between manufacturer and storefront. The store doesn't have to buy the materials up front.
In the case of ebooks, the original model was kinda broken, because AFAIK Amazon wasn't "buying" a stack of ebooks and then trying to sell them at a profit; Amazon didn't buy the ebook from Macmillan until the customer said "send me an ebook!" At which point, 1 sale goes to Macmillan; Amazon takes their cut (or a loss), and the customer receives 1 ebook.
The agency system is a better economic model for what's going on here. Amazon isn't risking anything by hosting the books, which is one of the reasons retail sales take such a high cut--the 50% rate assumes a lot of nonsales which are subsidized by the successes. If there's no money tied up in costs, there's no reason the middleman should get that high a percentage of the sale.
However, the fixed-pricing model is likely to bite publishers badly. They won't have the ability to gauge customer interest by lowering the price a bit and seeing if sales skyrocket; they won't have the ability to participate in site-wide promotions. The retail model allows the ones who deal directly with customers the flexibility to find out what they want; doing so with commission sales is a lot harder.
And publishers *still* don't think they're competing with amateurs or free ebooks. Macmillan thinks it's competing with Random House, thinks Amazon is competing with the B&N bookstore--not Smashwords, and certainly not Feedbooks.
(In response to the original post: No, it won't affect my habits in the slightest; I don't buy DRM'd ebooks.)