A simple question about the new 'agency' model...

[delphidb96]

Okay, I *get* that MacM, H-C and Mini-T have all pushed and gotten an 'Agency model' deal from Amazon. Now if I understand correctly, this new model puts Amazon's amount of each sale at 30% - at least for bestsellers. Is this also true for the midlist ebook titles? You know, the ones that are currently listed for $6.99-$7.99 on Amazon. Or does Amazon get to keep getting it's 50% for those???

Derek

[DawnFalcon]

There is no more "midlist". The publisher sets prices, Amazon gets 30%, that's it. No ifs, no buts, no promotions or discounts.

[Guns4Hire]

I hope these guys fall flat on their face.

[Pardoz]

Originally Posted by delphidb96

Okay, I *get* that MacM, H-C and Mini-T have all pushed and gotten an 'Agency model' deal from Amazon. Now if I understand correctly, this new model puts Amazon's amount of each sale at 30% - at least for bestsellers. Is this also true for the midlist ebook titles?

Yup. The agency model means:

- the publisher decides the price they want to (try to) sell e-books at.
- the publisher tells Amazon '(Try to) sell this e-book for $X'
- in the unlikely event Amazon sells a copy of the e-book, Amazon keep 30% and kick 70% back to the publisher.

This applies to every title - new, old, bestseller, midlist, everything. Basically Amazon is no longer a retailer, they're a sales agent working for a commission, thus 'agency model'.

When the price of e-book versions of some midlist titles shoots up to $14 for a book that's been out for fifteen years as a $7 mass market paperback, remember the first point above and don't bother writing a letter of complaint to Amazon, since they're not the ones deciding that's the 'correct' price.

[Boston]

Originally Posted by delphidb96

Is this also true for the midlist ebook titles? You know, the ones that are currently listed for $6.99-$7.99 on Amazon. Or does Amazon get to keep getting it's 50% for those???

Derek

Not sure what is meant by "keep" or how your define midlist.

I would assume that nothing changes unless the publisher/Amazon agrees to do so. Midlist publishers have been largely benefitted by ebook publishing (no worries about inventory and can price to attract new readers) and may not have the same clout as a big publishing house.

As far as keeping 50%, Amazon still had to pay the publisher based on the list price. If Amazon chose to sell below that, then it came out of Amazon's 50%. Which is why its been reported that Amazon sold many of its $9.99 ebooks at a loss. In theory, Amazon could be making more money with its 30%.

At least that was my understanding

[starrigger]

Some clarification might be in order:

1. The term "midlist" has nothing to do with this issue. Midlist means books that aren't bestsellers, books that sell in more modest numbers. Probably what you meant was "backlist," which is books that came out a while ago, but are still available.

2. As far as I know, we don't actually know that Amazon has agreed to the agency model, just that they're agreeing to Macmillan's terms. Macmillan's offer was agency model or continue the same terms, with ebooks delayed some months after hardcover.

3. If the settlement means the agency model, then according to pronouncements, there should be no increase in prices for backlist titles--those currently selling for $6-8. The higher prices should only apply to new titles just out in hardcover. The real question is whether they'll correct all the books out there whose prices never got lowered when they should have.

4. Everyone talks about 50% of "list price," but it's never been clear that "list price" for an ebook meant the same price as hardcover price.

5. If Amazon goes to the agency model, they'll probably make more per book. But lose some market leverage. The author (by my calculations) will probably get less. The publisher more. Per book sale, that is. Sales may drop.

I'm not a big fan of the agency model. Neither am I a fan of Amazon's Walmart-like model. I don't see many winners here--unless this really does help preserve hardcover sales, which I doubt. But I could be wrong. (I also don't think it's as catastrophic as many have made it out to be for the reading public. It might get publishers to take seriously actually dropping the price of books once they're in paperback, instead of neglecting the whole business, as they often do now.)

[Pardoz]

Originally Posted by starrigger

3. If the settlement means the agency model, then according to pronouncements, there should be no increase in prices for backlist titles--those currently selling for $6-8. The higher prices should only apply to new titles just out in hardcover.

Hmm...I read the pronouncements rather differently, and assumed that once the new agreement is finalized and in place all Macmillan titles would be sold under the agency model, at Macmillan-set prices, new, backlist, the whole shooting match. Then again trying to figure out what's actually going on here by examining press releases is about as precise a science as haruspicy.

The real question is whether they'll correct all the books out there whose prices never got lowered when they should have.

This assumes that according to Macmillan those prices should have been lowered, and we have evidence that they don't believe they should have from Macmillan employees (scroll down to the first comment). The "Kushiel title" referenced there has been available as a $7.99 mmpb since 2004.

4. Everyone talks about 50% of "list price," but it's never been clear that "list price" for an ebook meant the same price as hardcover price.

Varies by book, one assumes - it would be lunacy to claim "list price" for a mass-market original was $25, obviously. Amazon lists a "Digital List Price" (defined as "the suggested retail price set by the publisher") and these are all over the place, varying wildly by publisher, format, and how long the book has been out.

On the Macmillan titles I looked at "Digital List Price" was either $14.00 or first-edition sale price (generally hardcover price, in other words, except for a couple of books that launched as oversized/"trade" paperbacks but didn't have a hardcover edition), whichever was higher, regardless of how long the book had been out or in what formats.

Amazon seem to have added some new columns (or at least I never noticed them before). From the listing for Emma Bull's excellent novel Territory:

Digital List Price: $24.95 What's this?
Print List Price: $7.99
Kindle Price: $7.19

This looks to me like preparation for a day when it reads:

Digital List Price: $24.95 What's this?
Print List Price: $7.99
Kindle Price: $24.95

so that their customers lay the blame where it belongs.

[starrigger]

Originally Posted by Pardoz

Hmm...I read the pronouncements rather differently, and assumed that once the new agreement is finalized and in place all Macmillan titles would be sold under the agency model, at Macmillan-set prices, new, backlist, the whole shooting match. Then again trying to figure out what's actually going on here by examining press releases is about as precise a science as haruspicy.

I won't debate whether or not you should believe that Macmillan will do what they say. We'll all find out together.

But their announcement was pretty clear: Most new titles out in hardcover would be priced at $14.99. Prices would be lowered as lower-priced paper editions are released, to bottom out at $5.99 to $6.99.

That's what they said. And it certainly implies that books already in paperback would be priced at the lower prices.

I hope they stick to it. All this public attention might goose them into it.

Edit: I had never noticed the Digital List Price on the Kindle listings. My bad. I suppose if I had a Kindle, I would have paid more attention to that.

[Pardoz]

Originally Posted by starrigger

I won't debate whether or not you should believe that Macmillan will do what they say. We'll all find out together.

But their announcement was pretty clear: Most new titles out in hardcover would be priced at $14.99. Prices would be lowered as lower-priced paper editions are released, to bottom out at $5.99 to $6.99.

Quite so. Even taking that at face value, though, that announcement didn't address the question of what happens to the prices of existing e-books. Possibilities are two:

- The agency model only applies to books published after Agency-Day, and anything Amazon was selling before A-Day will continue to be sold under the old agreement. This would be so idiotic on so many levels that I'm reluctant to rule out the possibility entirely.

- The agency model applies to everything, both new and existing titles.

In the latter case, we have a new question: what happens to the prices of the books currently on sale? Possibilities are three:

- Right now somebody at Macmillan is going through their e-book catalogue with a copy of the new pricing model in one hand and a blue pencil in the other (or at least creating an algorithm to do same), updating prices to bring them into line with the new model. When Jeff Bezos' hunchbacked assistant throws the Great Big Knife-Switch in the Amazon server room on A-Day everything gets updated with the new price.

- Even if Macmillan actually have a new pricing model, their attention is too focused on other things to update the list prices on their backlist. When noises start to be made asking why last week's best-seller is selling for $30 but this week's is selling for $14.99 this will be blamed on the transition from one model to another, and vague promises will be made promising the matter will be examined. Adjustments will be made over time, starting with recent bestsellers, then working into the backlists of current bestselling authors. Midlist authors' backlists may, eventually, get examined. Or may not, if a decision is made that it wouldn't be cost-effective to do so.

- Nothing at all, on the assumption that in six months nobody will even remember the title of today's bestseller, much less how much it was on sale for.

Keep in mind that this is all separate from what happens to the price of new bestsellers. We could easily end up in a situation where next January's bestseller starts at $14.99 and drops to $5.99 by Christmas, but a ten year old midlist title stays $25 forever.

Edit: I had never noticed the Digital List Price on the Kindle listings. My bad. I suppose if I had a Kindle, I would have paid more attention to that.

I own a Kindle and don't recall ever having seen it before. Then again I don't shop at the Kindle store all that often, so it may have been there all along but I never noticed, since I never had any reason to care what the "Digital List Price" was.

[starrigger]

I can't argue much with any of those scenarios.

[Xenophon]

Nor I. I hope for the first, but fear the second and/or third.

[Lemurion]

Originally Posted by Pardoz

....

This assumes that according to Macmillan those prices should have been lowered, and we have evidence that they don't believe they should have from Macmillan employees (scroll down to the first comment). The "Kushiel title" referenced there has been available as a $7.99 mmpb since 2004.

....

I just want to address this point. Given that Macmillan has only discussed and or announced the new model, and not implemented it; I think it is incorrect to say that they "should have lowered" the price already, but rather that they should lower the price once the new model is in.

I've seen other comments on this Kushiel book, and for whatever reason it is still supposed to be hellishly overpriced in ebook. Nobody seems to understand why, but it is.

I think it's horrendously stupid; but I don't think it can be blamed on the agency model.

As for the general thrust of the thread: I think Amazon will continue to sell books priced according to its current model until the new agreement comes into effect. Once the new model comes into effect they will be charging whatever the new prices are supposed to be (approximately, who knows whether the new agreement gives them a little wiggle room - I certainly don't).

At that point Macmillan's pricing structure can succeed or fail on its own merits and the actions of the market.

Remember Eric Frank Russell's short story "Basic Right."

"Everyone has the basic right to go to hell in their own fashion."

Let Macmillan, and Amazon exercise their basic rights.

[=X=]

Thank you for the explanation.

Originally Posted by starrigger

4. Everyone talks about 50% of "list price," but it's never been clear that "list price" for an ebook meant the same price as hardcover price.

Good point, I've only heard it in the reference of a 50% price increase which refer to Amazon's $10 price compared to the new MacMillian price of $15. Hence a 50% increase.

Originally Posted by starrigger

5. If Amazon goes to the agency model, they'll probably make more per book. But lose some market leverage. The author (by my calculations) will probably get less. The publisher more. Per book sale, that is. Sales may drop.

I'm not a big fan of the agency model. Neither am I a fan of Amazon's Walmart-like model. I don't see many winners here--unless this really does help preserve hardcover sales, which I doubt. But I could be wrong. (I also don't think it's as catastrophic as many have made it out to be for the reading public. It might get publishers to take seriously actually dropping the price of books once they're in paperback, instead of neglecting the whole business, as they often do now.)

No winners maybe but there will be losers. Authors and Consumers. What I don't get is why Authors are supporting the publishers on this.

I can't figure out if this is Stockholm syndrome or Authors natural reaction to oppose Amazon.


=X=

[dsvick]

The one silver lining here is that if all of the eBook sellers are forced to go with the agency model by all publishers then the prices should be the same across the same and they will all have to improve their customer service to attract and keep customers.

Of course that might be a silver lining like having been looking for an ice cube for your drink as the Titanic hits the iceberg.

[Lemurion]

Originally Posted by =X=

No winners maybe but there will be losers. Authors and Consumers. What I don't get is why Authors are supporting the publishers on this.

I can't figure out if this is Stockholm syndrome or Authors natural reaction to oppose Amazon.


=X=

It's simple: Two multi-billion dollar corporations are arguing about the best way to sell books, and neither have the best interests of authors first in mind. Authors are siding against the one that kicked them in the nuts as a negotiating tactic.