Smashwords defends agency model in new editorial?

[scrapking]

http://www.huffingtonpost.com/mark-c...b_1387815.html

I don't know where to begin in disagreeing with the above article. I question the relevance of Smashwords' pricing trend compared to that of the major publishers. I think he's borderline delusional to suggest the agency model hasn't raised prices. And, most of all, I think he entirely misses the point on the DoJ complaint (it isn't about pricing so much as the alleged collusion between Apple and publishers).

Please note: I posted this on my iPad and, dammit, autocorrect turned Smashwords into two words in the title and I missed it, dagnabbit. :-(

[Blue Tyson]

Yep. Hardly explains the instant doubling of Australian prices in December, does it?

[FizzyWater]

I skimmed over all the numbers, but it sounds more like a plea to keep Agency pricing because more people are turning from the mainstream publishers and taking a chance on all the no-names, self-published, and previously published backlist books on Smashwords.

It probably is good for them. It doesn't mean it's good for readers who want established authors' new releases...

[phenomshel]

Originally Posted by FizzyWater

I skimmed over all the numbers, but it sounds more like a plea to keep Agency pricing because more people are turning from the mainstream publishers and taking a chance on all the no-names, self-published, and previously published backlist books on Smashwords.

It probably is good for them. It doesn't mean it's good for readers who want established authors' new releases...

Brava!!! Exactly what I would have said, and more eloquently put.

[rhadin]

Quite frankly, I hope agency pricing stays. It has saved me thousands of dollars and stopped me from buying ebooks by "name" authors whose work is really only mediocre to begin with. Agency pricing has made me turn my attention to indie authors, authors I wouldn't have given a second glance to otherwise.

One point that Coker makes that I think is correct is that the wholesale model is also a form of agency pricing. No retailer can survive if the retailer is selling all product at below cost. In the wholesale model, the floor price was set by the wholesale price. All agency pricing has done is change the floor price and ensured that more booksellers have a chance to survive.

[howyoudoin]

The article is a damning indictment of the traditional Publisher-Author model, rather than an argument in favour of Agency pricing. If an author makes more as an indie than as a traditional publisher endorsed author, it is the publishers who need to correct their model that makes it so.

[abookreader]

I read that and what I came away with is the impression that the flood of cheap and free books is bringing down average book prices. I believe that to be true - with or without Agency pricing. Every sales model I've seen has shown that low cost books are selling at rates far above the ebooks priced at traditional new book prices.

But of his point the one I most disagree with is how Agency pricing protects small retailers. When the ability to attract customers via sale prices is taken away - there are extremely few retailers who have the ability to compete with the giants (Amazon, Barnes, Apple etc) on the basis of website/app buying experiences. This is partly do to my own personal experience. When Agency Pricing took away the need for me to price compare, I was left with absolutely no incentive at all to leave the Amazon site.

[scrapking]

Originally Posted by abookreader

When Agency Pricing took away the need for me to price compare, I was left with absolutely no incentive at all to leave the Amazon site.

Absolutely true. Agency pricing takes away competition on price, so takes away the incentive to shop around. Why would you when everyone is the same price? That's anti-competitive. What other volume business takes away the retailer's ability to discount? And it's worth re-iterating that it's not merely striking at discounts, but eliminating bundling opportunities and other creative promotions that are something other than a straight discount.

The agency model is based on how a real estate agent works, where the item is being sold by a seller and the agent is acting as a go-between. There's nothing anti-competitive in that as there's one item to be sold, but when you're selling virtual goods through an intermediary it's entirely different. The agency 6 now see Amazon, Kobo, etc., merely as intermediaries for their digital goods, rather than as retailers. I think that's a stretch.

In any case, none of that would protect them if the DoJ concludes they illegally colluded (which is what is being alleged, and is completely ignored by Coker's self-serving viewpoint).