The Agency Model and What Might Happen
Last week, the United States Department of Justice (DoJ) warned Apple and five of the largest publishers in the United States that they intend to sue the group for collusion in e-book pricing. This has been known as the Agency Model, where the e-book distributor (Apple, Amazon, Barnes & Noble, Google) sells the book at a price set by the publisher and receives a commission. The distributor cannot change prices and the publishers agree to price the same across all distributors. This model for books originated with Apple before their release of the iPad. Apple does not own content, but receives a commission for selling through their devices.
I think the agency model has not produced millions of dollars for publishers as they might have thought because:
1) The iBooks store never took off. The people who bought the iPad didn’t buy it to read books.
2) Consumers just flat out refused to pay the prices the publishers wanted for new releases and older books. Readers responded negatively and the outcry was loud.
I’m going out on a limb, but I believe executives and lawyers from the companies are meeting now with the DoJ to discuss what can be done to keep the lawsuit from going forth. If the companies come forward with a plan that satisfies the government and gives the impression that consumers will be better served, then the publishers look good. Apple will probably pay a fine as the DoJ will want money from somewhere. This gives the appearance that the DoJ was right in their threat.
It’s well-known that publishers don’t like Amazon, but they have to work with the 800-pound gorilla. Publishers need to look like they are in control of their industry even though they are losing their hold on which books will thrive in the marketplace.
I’m speculating that a compromise will be reached in which:
1) Publishers set the prices on some books; such as new releases and/or a pre-determined list of top-tier authors. These books will be under the agency model we know today.
2) Distributors will pay a set fee for other books from these publishers based on time in print and/or author and will have the ability to set prices and take a loss on every book if they want.
3) The library lending distribution system for e-books will end as publishers realize they can’t make money through the product and libraries continue to lose patrons and tax dollars in the coming decade.
4) Publishers will allow some books to be included in the Kindle Owners Lending Library. I speculate these will be the less popular books and Amazon will pay a set fee for each book borrowed.
5) Brick-and-mortar bookstores won’t be pleased with compromise, will declare that it stifles competition, and 25% will close their doors in the next five years.
What do you want to be the outcome of the DoJ action? What about libraries and brick-and-mortar bookstores? Will they survive?
A book I didn’t finish – now a Cheap Read
Several weeks ago I wrote about books I had not finished and mentioned I needed to post reviews on books that weren’t that great. Here’s one of those books that is selling for only 99 cents. I paid more when the book was sold by a publisher, but at this price . . . . no, I still wouldn’t like the book.
Written by Kate Angell, Squeeze Play is the first book in a four-book set about the Richmond Rogues, a world-champion baseball team. The players, team management, the girlfriends and/or wives and more are introduced. The book gets crowded with so many people. And the names! They are names for pets – Risk, Zen, Psycho, Chaser, and Stevie (a woman). Many of the scenes are at the coffee shop where the coffee, sexual innuendo and more flow freely. It all seemed rather sophomoric.
Ms. Angell’s writing style is fine. To me the characters and their relationships were confusing and if the men weren’t playing baseball, they were playing the women. The reviews average 4.2 stars, so some readers enjoyed this light read.
The remaining three books in the series are selling for $3.99 each. Maybe with enough sales the team will be able to afford jerseys.