Smashwords Moves to Agency Model

[NightBird]

I saw this on Telereads and couldn't believe it:

http://www.teleread.com/paul-biba/sm...odel/#comments


Here is the straight scoop from Smashwords website:

December 1, 2010 - The big news of the day, as hinted yesterday: We renegotiated our distribution contracts with Kobo, B&N and Sony and effective today, Smashwords authors and publishers control the pricing of their books at retail. No more discounting. For those of you who follow this updates page, you already knew about Kobo. We trust B&N and Sony are a pleasant surprise. Oh, and we increased royalty rates for sales through Kobo, B&N and Sony to 60% of your list price. Read the post over at the Smashwords Blog, and do your fellow author a favor and tell a friend. Also, please show your love to Kobo, B&N and Sony. They didn't have to do this. Each went above and beyond to make this happen for Smashwords authors and publishers, so please do thank them on Twitter, Facebook and everywhere else. Smashwords retailers have shown their love to indie authors and publishers, and I'm tickled pink for what it means about the future of publishing. Very exciting

https://www.smashwords.com/about/beta

Smashwords blog link:

http://blog.smashwords.com/2010/11/s...ublishers.html

Gaw! This is sickening!

[taming]

I'm actually fine with people who self-publish through Smashwords being able to set a price and know that it will be the same everywhere. To my mind, it is very different than the big agency houses doing that kind of thing. I'm betting that authors will pay attention to what kind of pricing works for them and adjust as necessary. It just feels different to me...and not at all like some big media company is holding us hostage.

[MR. Pockets]

I have never bought from smashwords, (because I haven't bought any books yet) but always considered them a good source. Now (should the need arise) I have no reason to buy from them over anyone else.

[TallMomof2]

More price fixing, fewer books for me to buy.

[saoir]

Originally Posted by TallMomof2

More price fixing, fewer books for me to buy.

You are so right.

Price competition favours efficiency and large well funded retailers through the history of commerce have rarely proven to be the winners on that score.
Price competition favours an even playing field and keeps the big well-funded retailers from becoming bloated monsters who control the market and screw the consumer. Small independent retailers, many of whom have been clients of mine in other market sectors, are able to set up with lower cost bases and can often compete on price, while offering a wider range of support services and other factors important to customers.

No, price competition is not the sole tool of retailing but it is a core and essential tool. Taking it away has been shown throughout modern commercial history to be damaging to the consumer and in the best interests of the biggest monopolies.

Consumers base their purchasing decisions on a combination of price, service, follow up service and many other factors according to the industry. The fact that price is included in this mixture encourages all players in the market to stay competitive and efficient. It keeps the market open to new entries and to new and innovative ideas.

Price fixing is no good for anyone except the sellers. Price fixing in the French book market keeps prices sky high. Price fixing kept air travel restricted to the well off until competition was freed up. Price fixing is never ever good for consumers.

[abookreader]

I'd appreciate it if somebody could tell me why this would be a thing for authors to cheer over?

I've always been under the impression that Authors were ecstatic when they'd wake up one morning and find out that Amazon had discounted their book.

[bgalbrecht]

I bought over 100 ebooks at the Fictionwise CyberMonday sale (60% off!) that I never would have bought at all if they had been sold with Agency Model pricing. I'd guess the two companies that got most of my money were eReads and Random House. Guess how many non-free Agency Model pricing books I've bought in the last 3 months? It's been less than a dozen, and they were either discounted or purchased at Sony where I still have credit from the 40% off gift cards from last spring. I have a Nook, and I generally don't buy Agency ebooks from B&N because the publisher prices the ebook 11% higher than the mass market paperback, which B&N discounts.

[mr ploppy]

Originally Posted by abookreader

I'd appreciate it if somebody could tell me why this would be a thing for authors to cheer over?

I've always been under the impression that Authors were ecstatic when they'd wake up one morning and find out that Amazon had discounted their book.

If they discount it too much your commission goes down from 70% to 30%.

[DMSmillie]

Originally Posted by abookreader

I'd appreciate it if somebody could tell me why this would be a thing for authors to cheer over?

I've always been under the impression that Authors were ecstatic when they'd wake up one morning and find out that Amazon had discounted their book.

Not always - it depends what royalty option they've selected. When you publish via Amazon's DTP interface, you can select either 35% or 70% royalties.

If you select 35% royalties, you undertake not to sell the book anywhere else at a lower price. If Amazon decides to discount your book, you still get 35% of the list price.

If you select 70% royalties, you undertake not to sell the book anywhere else at a lower price, and that the ebook is priced at least 20% lower than any print edition you sell anywhere. If Amazon decides to discount your book, however, you get 70% of the discounted price, not the list price.

Most commonly, Amazon discounts these Kindle books to match a lower price found elsewhere. This has resulted in some authors losing royalties because of aggressive discounting by other online retail stores (such as B&N) which the author had no control over, and Amazon discounting to match. Some authors have ended up setting a list price for B&N, Kobo, etc, several dollars higher than the Kindle list price, simply to try and avoid this happening.

Of course, there are many authors who see having their book discounted as a good thing, since it might encourage some to buy their book who might not have considered it otherwise. Others, though, feel they should be able to have more control over what their book is sold for, and simply see it as an unwarranted loss of royalties when their book is discounted.

- Donna

[Worldwalker]

So the cabal rakes in another one.

Publishers win, purchasers lose.

I'm gonna miss Smashwords.

[tompe]

Originally Posted by Worldwalker

So the cabal rakes in another one.

Publishers win, purchasers lose.

Which publishers? I thought this was for self published books.

[leebase]

Oh the horrors, authors being in control of the pricing of their books.

Lee

[lilac_jive]

Yeah, this doesn't bother me so much. It's the author setting their price, They can still give out coupon codes for use on Smashwords, and I get a book DRM free in the format of my choice.

So you guys are going to stop supporting independent authors with DRM free books because the pricing scheme vaguely sounds like the big publishers, even though the books are still usually extremely cheap? Especially since the most discount you would see on these books elsewhere was maybe at the most 25% off?

Sounds silly to me. I dont usually get frustrated with the crowd here, but come on people, pick your battles.

[Critteranne]

Originally Posted by Worldwalker

So the cabal rakes in another one.

Publishers win, purchasers lose.

I'm gonna miss Smashwords.

There's a cabal here? How? The vast majority of books on Smashwords are all self-published books, with the exception of those put up on Smashwords by small presses and micropresses. Yes, some of the titles were originally published by big publishers, but they only go up on Smashwords when the authors get their rights to their backlist back from the cabal.

I don't see this as being like the Agency Model at all. Smashwords is a distributor, not a publisher. And Smashwords is definitely not part of a cabal.

Also, reading what the founder of Smashwords said, there was a lot less drama:
"I'm also pleased to report that unlike the tactics used by the Agency 5, we did not put a gun to the head of our retailers. No shots fired, no threats made. In the end, I think each retail partner decided on their own that what is best for Smashwords authors and publishers is also what's best for them and their customers in the long term."

[daffy4u]

Originally Posted by bgalbrecht

I bought over 100 ebooks at the Fictionwise CyberMonday sale (60% off!) that I never would have bought at all if they had been sold with Agency Model pricing. I'd guess the two companies that got most of my money were eReads and Random House. Guess how many non-free Agency Model pricing books I've bought in the last 3 months? It's been less than a dozen, and they were either discounted or purchased at Sony where I still have credit from the 40% off gift cards from last spring. I have a Nook, and I generally don't buy Agency ebooks from B&N because the publisher prices the ebook 11% higher than the mass market paperback, which B&N discounts.

I thought I hit the jackpot when I bought 17 books with the discount. I am in awe!

Since agency pricing went into effect, I have stuck to my person "no ebooks over $9.99" pledge. I haven't purchased the latest Stephen King because it's too high. I've skipped a few other series books for the same reason.