Was agency pricing hugely beneficial to self-publishers? In a response to a DoJ public comment by David Gaughran (claiming that professional publishers did it to try to kill off Amazon’s self-publishing), self-publishing blogger Aaron Shepard makes a pretty convincing argument that it amounted to a great big sloppy kiss from publishers, who were unwittingly handicapping themselves in competing against self-publishers’ lower prices—and that Amazon isn’t necessarily as big a friend to self-publishers as they might believe.
Here are only a couple of his numerous points:
• The agency model helped self publishers by creating a bigger price differential among ebooks, thereby making less expensive ones more attractive. David, do you really want new books from top authors coming online at $9.99? And exactly where did you obtain that death wish?
• The agency model also helped self publishers by directly inspiring Amazon’s 70% royalty plan. This royalty was set up in retaliation for the agency model, as a way to draw authors away from big publishers. Without Apple and the big publishers, David, your publishing income would be half what it is today. That’s the benefit to you of ebook competition, which was not significant before establishment of the agency model.
He also contends that Amazon has offered largely second-rate support and tools to self-publishers, and that it sells all of its books, whether print or electronic, as loss leaders if it can to try to draw people in for bigger high-margin purchases while other book retailers are stuck having to make their only profit from books.
Shepard calls the DoJ’s case “far-fetched,” noting it relies on “a fairly creative interpretation of anti-trust law” that he’s not so sure the courts will agree with. We’ll find that out for ourselves in about ten more months. Meanwhile, if Amazon is able to lower prices again on half of the Big Six publishers’ books, and the other three publishers follow suit to keep from losing too much money, it’s possible that self-publishers could be in for some harder times ahead.