The Bookseller’s FuturEBook blog has a piece by Philip Jones looking at ten conclusions about the way agency pricing is being introduced in the United Kingdom. Although Jones comes from a pro-agency point of view, he isn’t shy of pointing out that it is mainly aimed at keeping Amazon from taking over the e-book market and has been pretty badly implemented in the UK so far.
Maybe there are reasons for this, mostly legal for sure, but retailers we’ve spoken to appear to be unclear why Hachette set a fixed ‘D-day’ for some, but not—most noticeably for Amazon—others. Some retailers are unhappy that a measure brought in to fix Amazon has actually given the company a huge window of exclusivity at this key period.
He dismisses the similarity of agency pricing to the Net Book Agreement (a price-fixing agreement in effect in the UK from 1900 until 1997, which Hachette actually spoke out against) with a “that was then, this is now” argument, and suggests that it is mainly a short-term device: “No-one I’ve spoken to believes it can last long term,” Jones writes.
Jones also expects all of the major publishers on the iBookstore to implement agency pricing as well, and that Amazon will sooner or later come out strongly against agency pricing. He expects prices may not rise as much as some fear.
In the end, Jones points to a key difference between the digital music market and the e-book market—that digital improves the music listening experience over physical media more dramatically than e-books improve the experience over print media.
It seems to me that what this means for the agency model is that it is doomed, for precisely the same reason the Net Book Agreement floundered. In the short-term the e-book market will grow quickly with some genres, such as romance, science-fiction, overperforming massively. But the market will ultimately stagnate, and with print in slow decline, publishers will be reaching out desperately for growth. Someone, possibly even someone from Hachette, will raise the possibility that uniform pricing is killing the market and stifling competion, and we’ll be back to 1995.
It would be nice if we could get to that point without having the whole fixed-pricing thing in effect in the meantime.