In a recent column, publishing analyst Mike Shatzkin looked at how rich with irony the current publishing situation is. A large chunk of the column was devoted to explaining the current agency pricing situation to anyone who hasn’t been paying attention. He points out that one unintended consequence of Amazon’s policy restricting the use of agency pricing to the Big Six publishers might be to make the Big Six publishers more attractive to best-selling authors than self-publishing through Amazon.
Amazon wants to compete for those authors and can offer a better royalty on Amazon sales to entice them (when Amazon pays 70% to the author, the author keeps it all; when they pay 70% to the publisher, the author does not get it all, even if s/he succeeds in negotiating something better than the industry standard of a 25% ebook royalty share.) But Amazon reportedly wants ebook exclusivity, which cuts out a big chunk of the ebook market, and they are seriously handicapped getting a print sale through brick retailers.
This isn’t the only ironic circumstance inherent in publishing, by any means, Shatzkin further notes:
Cheaper ebooks, which consumers love, are making bookstores, which consumers also love, gasp for the breath to survive. The closest thing to a monopoly threat in the business, Amazon and Kindle, work to drive consumer prices down. Apple’s great success with new devices coupled with their very slow start at retailing, generates agency pricing and sales opportunities for other retailers that probably benefited Barnes & Noble the most. B&N, the brick retailer most skilled at logistics but only newly-minted as any sort of tech company, finds not one but two unoccupied niches in the eink product suite: color and touch-screen.
To that, I would add the entire implementation of agency pricing, in which publishers were so concerned that Amazon would make them have to take a price-cut on their e-books that they implemented their own self-price-cut, going from taking in 50% of hardcover price revenue per e-book to 70% of e-book price revenue. All for the sake of trying to convince consumers that it was better for them to have to pay more for an e-book title.
I’m not too sure his facts are correct. I’ve found many self-pubbed ebooks in Kindle format that are available in other ebook sites. If so, that kind of derails his theory and whole article?
I think he is talking about the Amazon only author deals (royalty’s included).