That’s the title of an article by Peter Brantley in Publishers Weekly. Here’s an excerpt.
Publishers argue that one of the benefits of agency pricing was that ebook retailers had to compete on the value of their services, which was (oddly) presumed by publishers to be of higher value to consumers than pricing. Not only is the logic questionable, it is also an extremely book-centric perspective on Apple, Amazon, and to a lesser extent, Google – very large technology companies whose business are not defined by selling books but in building traffic and generating commerce. People who are Kindle customers are likely to be Amazon customers prior to ever picking up a Kindle because they appreciate Amazon’s superb customer service, the Prime subscription offering, and their ability to get a wide variety of goods cheaply and quickly.
It is possible that agency pricing may have forced Amazon to give up some market share to Barnes & Noble, but at most, agency pricing could only be a temporary monkey wrench in the digital transformation that has reshaped the publishing business. Large technology companies can bring efficiencies to bear that are a result of powerful cloud platform services, troves of customer data, and the ability to wring benefits from a wide range of digital commerce. Google introduced its new Google Play media marketplace with extremely steep discounts on books. And, who can doubt that Apple could aggressively adjust its pricing if it wishes to remain competitive; the company that has “enough cash to buy a good part of Western Europe” can manage to subsidize a few more copies of the latest Twilight novel.
It’s also worth noting that publishers’ move to agency pricing helped create the retailer market concentration that publishers now decry as inevitable. Small independent online booksellers were devastated by the move to agency. Books On Board took months to recover, adversely impacting its relations with suppliers. Diesel Books took six months to get agency publisher books back into inventory; All Romance eBooks has reported that it took over a year – and in all that time, their customers were not being well served. All of these retailers, as well as Fictionwise, found their loyalty programs, their “buy one, get one free” (BOGO) promotions, and the ability to do spot sales, immediately crushed. (Fictionwise was absorbed by Barnes & Noble.) These ebook vendors were a serious counterweight in passionate reader communities against Amazon, and agency hurt them badly.
As usual, with anything Peter writes reading the whole thing is worth your time.
Thanks to Michael von Glahn for the link.
