The 'Agency' Model

There is a negative impact- for the consumer- of publishers investing in the digital: the issue of e-book pricing. Some publishers,including the ‘Big Six’ publishers, have adopted the much-debated ‘agency’ pricing model as opposed to the ‘wholesale/retail’ model. Andrews reports that the issue is whether or not the ‘agency’ model hurts the consumer as, under this model, a publisher can maintain control over the prices of e-books throughout the supply chain and pay the retailer a commission (2011). He continues by stating that “the agency model eliminates book discounting by retailers. Under the agency model, publishers can put their e-books on sale, but the e-books price has to be the same wherever it is sold” (2011). But what are the impacts of this decision on the publisher? Publishers who use the model set their own prices for e-books, rather than allowing the wholesaler (in many cases, this mainly means Amazon) to set the price. In theory, and in looking through the lens of the publisher, this means an increase in revenue from sales of e-books for the publisher. But do higher e-book prices discourage the consumer from buying them? In a survey that I conducted, for example, 95% of people said that an e-book should not cost the same as a book in printed form. Kasdorf says that “to most people today, ‘digital’ implies ‘free and easy’ (2003: 1)”, and it is for this reason that the consumer is reluctant to pay the same price for a digital edition as they would for a print edition. Why should the consumer pay for digital content, when most digital content is free?

Andrews, R. (2011) ‘Europe Probing Apple and Publishers for E-book Price ‘Cartel’’. Paid Content.  6 December. [Online] Available from:  http://paidcontent.co.uk/article/419-europe-probing-apple-and-publishers-for-e-book-price-cartel/ [Accessed 21 January 2011]

Kasdorf, W. (2003) The Columbia Guide to Digital Publishing. New York: Columbia University Press.