Tag Archives: Erik Sherman

Does Random House fear agency pricing because it gives authors too much information?

Much has been made of Random House’s refusal to embrace Apple and the other five big publishers’ agency pricing model, pleading inexperience at setting its own prices. As we mentioned a few days ago, Mike Shatzkin thinks Random House wants to maximize its short-term profits by being the only big publisher receiving full wholesale price from Amazon for its e-books.

Erik Sherman of BNET has another theory: he thinks Random House is opposed to agency pricing because it would give authors access to too much information.

He points out that publishers often use a number of creative accounting methods to disguise the actual royalty rates that authors are getting—”deep discount” sales, royalties based on wholesale rather than cover price, “reserve for returns”—and that agency pricing would make everything, of necessity, much simpler.

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