TBI Research is reporting that some of the major book publishers aren’t happy with the “agency model” being pushed by several publishers which is inspired by Apple’s iPad and iBookstore which aims to gain more control over their content.
However, one major book publisher we spoke with sees no reason to shift to that model right now or anytime in the near future.
The reason is that book publishers make less money from the agency model than they do from the traditional wholesale model (in which Amazon buys a book license at the full wholesale price, and then sells each copy for whatever it wants, often losing money on the sale). The agency model, therefore, also leaves publishers less money to pay authors and agents.
The current pricing model would give better deals to consumers and higher profits for publishers, but the publishers are afraid that they will lose control over their content, so they hope to set their own pricing using an agency model with a 30% share of sales to go to distributers. This is in contrast to selling units for a flat rate and allowing the distributors to set their own prices.
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