Tag Archives: Agency Model

Monday Morning Thoughts

I hope everyone had a great weekend.  But now it’s time to get back to work — at least for me.  So, to start the week off, here are a few links that might be of interest.  And, of course, there is an update on the Borders situation.

There is an interesting article in the Washington Post about how the publishing industry needs to take a page from the music industry and get rid of DRM.  I have to agree.  We didn’t see the music industry end when they finally did away with DRM and settled on a generally recognized format.  Did it change the industry?  Sure.  But that would have happened anyway simply because of new technology and demand from the buying public.

As a consumer, I’d love to be able to buy any e-book without DRM.  It wouldn’t even matter if the e-books were offered in different formats.  With no DRM applied, it is easy to convert from EPUB to MOBI to LIT or LRF, etc.  It would allow me to move an e-book from my kindle to my iPod touch to whatever.  That way, if I happened to be going somewhere and didn’t want to take my kindle with me, I could at least continue reading my e-book on my iPod touch, which certainly fits into smaller purses — or pockets — than the kindle does.

As an editor, I wholeheartedly agree that DRM needs to go away.  Oh, I can hear the screams of anguish now about how that would lead to an increase in piracy.  Sorry, but I don’t buy it.  If e-titles are easily available, the demand for pirated copies will decrease.   I’ll lay odds on it.

For those of you who might not follow the kindle boards over at amazon.com, there’s an interesting discussion going on about why e-books cost so much.  Now, you do have to wade through the grouchy responses about the agency model and others who won’t pay more then X-amount for an e-book.  But one response in particular caught my eye this morning.  This particular poster simply responded that e-books cost so much because they are still books.

I have to agree with him to an extent.  In particular, I do believe an e-book is no less a book than a hard cover is.  However, there are differences in the cost of production, distribution, etc.  And those cost differences should be passed on to the reader.  Pricing an e-book at the same — or higher — price than a hard cover will come back to bite the publisher on the butt.  (And hurt the author at the same time.  See the comments and posts about Michael Connelly’s The Fifth Witness last week when the digital version cost more than the hard cover versions at both Amazon and B&N.  Since then, the publisher has lowered the price of the e-book by $2, making it less expensive than the hard cover version.)

Finally, our Monday morning update on the Borders bankruptcy proceedings.  According to Publishers Weekly, the figure for unsecured creditor claims is in excess of $500 million.  That thud you heard was my jaw dropping to the ground.

Borders also argued for — and was granted — the ability to continue its contract with an outsourced call center.  The figures for this are in the article.  Go take a look.

In fact, just go read the article.  There’s a lot of information in it, much of it that still has me shaking my head.  The one thing it does include is the fact that the U. S. Trustee filed an objection to Borders’ request to pay its execs bonuses.  To say such plans are premature has to be the understatement of the year so far.

On the NRP front, we will have two new titles out Wednesday.  Check back for more on that later.



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More on the agency model and H-C blowing up library e-books

As you’re probably aware, the last of the major publishers to hold out against the agency model of pricing for e-books has finally given in.  Or maybe I should say sold out.  Random House announced earlier that it would join the other publisher not so affectionately nicknamed the Big Five in adopting the agency model for e-books.  What this means is that the publisher and not the retailer will set the price for e-books.  So, no more shopping for competitive prices.  E-titles will cost the same across the board, no matter which online retailer you use.

Now, it’s been interesting to watch some of the reactions across the web over the last few days to the news.  On the kindle boards, readers were gnashing their teeth at the sudden increase in price for a number of books.  And, folks, we aren’t talking small price jumps.  No, we’re talking increases of multiple dollars.  And we are talking about some very restless and angry customers.   Customers who may decrease the number of their purchases simply because they can’t afford — or won’t pay — as much for an e-book as they will for a mmpb.  More than that, when they see the price of an e-book for a title that has just hit the market and the projected for price for the mmpb that will be out in just a few months AND the mmpb is less than the digital title, well, the natives start doing the war dance.

But what is really telling have been the justifications for the change to the agency model. Random House talks about how this will make more money for them and for their retailers and will even the playing field for the independent booksellers who now sell e-book titles through google books, etc.  But no where have I seen anything about the authors — the creators of the e-book — getting more money.   While I appreciate anything that helps save the indie booksellers, let’s face it — this is simply one last grab at trying to maintain the status quo and not adapt to the changes pounding the industry right now.

There’s one other point I want to address about the above link.  One of the reasons the author of the article cites as being “good” about RH’s adoption of the agency model is “blockbusters everywhere!”  Gee, this wasn’t a problem before Apple opened the iBookstore.  Remember, everyone, we didn’t have the agency model until Apple and Steve Jobs got into the mix.  As for blockbusters everywhere, the only ones left out were those who purchased solely from Apple and, gee, they didn’t have to.  Kindle, Nook and the other major e-readers all have applications for the iPad, iPod touch, etc.  So Apple users weren’t tied to iBookstore.  Also, has anyone noticed how Apple hasn’t offered apps for non-Apple platforms, thereby losing sales?

’nuff said.

As for Harper-Collins and its decision that e-books sold to libraries will basically self-destruct after 26 check-outs, they’re really started a firestorm of protest.  Librarians are up in arms, calling for boycotts of H-C and, in some cases, even the jail-breaking of DRM on H-C e-books.  Why?  Because this decision will wind up costing libraries across the nation who offer e-books to the patrons in one way or another.

The most obvious way is that the libraries will have to contract with OverDrive for more “copies” of each e-book.  Let’s face it, that presents a problem in this day and age when libraries are facing huge budget problems.  Libraries across the nation are being forced to reduce hours, reduce their acquisitions, reduce staff numbers and are having to reduce hours — when they aren’t closing altogether.  Having to find more money in their budgets to buy additional copies of e-books because H-C has applied some magical formula and come up with the number 26 because, supposedly, that’s how many times a print book is checked out before it’s taken out of circulation.  C’mon, guys.  Apples and oranges here.

I don’t know about your libraries, but mine checks out books a lot more than 26 times before it is taken out of circulation.  The exceptions are when the binding breaks down — then it is temporarily removed and the binding is repaired — water damage, etc.  But normal wear and tear doesn’t kill a book that quickly.

But let’s look at it from another side.  Libraries are facing an increasing demand for e-books.  If, suddenly, they can no longer offer books — or if someone has been on a waiting list for months and months for an e-book only to suddenly be told they won’t be getting it because it reached that magical number of 26 checkouts, can you imagine the bad feelings?  Patrons make or break a library.  Angry patrons complaining to city councils can definitely break it.  And all over something libraries have no control over.

But what does H-C have to say about the uproar?  Here is an open letter to libraries about their decision.  H-C recognizes the importance of libraries but — and this is a big but — “Our goal is to continue to sell e-books to libraries, while balancing the challenges and opportunities that the growth of e-books presents to all who are actively engaged in buying, selling, lending, promoting, writing and publishing books.”  In other words, they are more worried about making sure libraries are as humstrung by DRM as is the purchasing public.

But let’s see what else they have to say.  “. . .our goal to make sure that all of our sales channels, in both print and digital formats, remain viable. . . ”  More of the same.  Limit digital in anyway possible to keep the print end alive.  But don’t ask us to change our business model because we won’t.  At least not one moment before we absolutely have to.

“We have serious concerns that our previous e-book policy, selling e-books to libraries in perpetuity, if left unchanged, would undermine the emerging e-book eco-system, hurt the growing e-book channel, place additional pressure on physical bookstores, and in the end lead to a decrease in book sales and royalties paid to authors.”  So, are they going to start putting limits on the number of times a print book can be checked out?  Or, conversely, start paying authors royalties based on the number of times an e-book is checked out?

“Twenty-six circulations can provide a year of availability for titles with the highest demand, and much longer for other titles and core backlist. If a library decides to repurchase an e-book later in the book’s life, the price will be significantly lower as it will be pegged to a paperback price point.” Wow, a whole year.  Possibly only 26 readers and then the title goes POOF.  As for tying the price of repurchasing the title to the paperback price point, well, I sure hope that’s written into the contract now because I seem to remember the publishers that adopted the agency model saying e-book prices would come down when the mmpb came out.  How closely have they stayed to that promise?  Well, let’s just say, I stopped holding my breath a long time ago because the price drops aren’t occurring as quickly or as deeply as represented.

I’ll admit now that I am a big supporter of libraries and I think this is a lousy decision by H-C.  A decision that hurts libraries and their patrons.  More, it hurts the author and even H-C because the decrease in the number of e-titles the libraries offer will lead to a decrease in sales.  People often use the library now to check out authors they haven’t read before.  Or to check the latest book from an author they used to like a great deal but who had disappointed in a book or two.  If they like what they read, they will then go buy books by that author.  The same goes with e-books.  This is a no-win decision for all involved and very short-sighted, imo, on H-C’s part.

For more information on this, check out this article from the Des Moines Register.


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Tuesday Morning

This is an exceptionally busy week here at NRP, so blogging will be sporadic at best.  This is what happens when everyone gets sick the end of the month.  It makes the first week of the next month even more hectic than usual.  But enough of that.  There are a couple of stories that caught my interest browsing the internet that I want to share.

Let’s start with what is probably the biggest news of the week so far.  The last of the major publishing houses to hold out against the agency model has finally given in.  Random House has announced it will be adopting the agency model of pricing starting this month.   In other words, RH will set the price for e-books instead of the retailer.  What this means is that we very well may see an increase in price for their e-titles because Amazon, B&N, etc., will not be able to discount the titles as they have in the past.  Will this mean a slow down in the number of e-books purchased?  Probably not.  It will mean an increase in gnashing of teeth and cursing of publishers on the different discussion boards. While it will — supposedly — even the playing field between the major sites like Amazon and BN and the independent retailers, that remains to be seen. It also remains to be seen if this change will mean a higher margin of profits for the retailers as RH claims.  Note, they don’t say a word about how this will impact the authors — surprised, anyone?

What is truly interesting is that RH is not going to the agency model in the United Kingdom.  It is clear from this link that RH is more worried about how the UK courts will rule on the agency model than it is on how the various investigations into the agency model will turn out here in the US.

Barnes & Noble is looking at its third-quarter postings and trying to figure out how to balance the print and digital side of its business.  They have also announced that they don’t plan, at this time, to close any additional stores beyond the few it has already announced.  In fact, it may actually move into some of the locations being shut down by Borders.  Hopefully, this means they are taking a hard look at their operations and trying to adapt to the changing marketplace.

Finally, here’s a link for “The eBook User’s Bill of Rights” sent to me by one of our authors, Taylor Lunsford.  I have to say, Librarian in Black pretty much hit the nail on the head.  Most publishers need to figure out that readers want to be able to read their e-books on any device and not be hampered by DRM.  They want to be able to loan an e-book like they do a real one and to be able to give it away.  I’m not sure about the resale but, but that’s only because I haven’t taken enough time to really think that one through.  But an e-book is a book as much as a printed book it.  A book is the product that is produced by the author.  The rest is just window dressing.


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There’s Strange White Stuff on the Ground in Dallas

so let’s shut down.

There are many things I love about living in the Lone Star State.  This isn’t one of them.  Okay, most folks down here haven’t a clue how to drive on snow, much less ice.  But then, they have trouble driving in the rain too.  But if you happened to be here this morning watching the news, you’d think this was the storm of the century — which it most definitely is not.  Local news has preempted the national news shows for the last two hours.   I guess when you only see snow once or twice a year and when North Texas ice storms are notorious for leaving folks without power for weeks on end, it’s better to err on the side of caution.

Any way, there is news from the publishing world this morning but, at least so far, nothing new on the Borders front.

The first bit of news that caught my eye this morning comes from Apple.  Simply put, Apple has tightened its control over what you can buy using its devices and from where.  In an article from the New York Times, Apple has said that “all in-app purchases would have to go through Apple, said Steve Haber, president of Sony’s digital reading division.”  What this means for apps for the kindle, nook and other similar programs has yet to be seen.

I agree with the NYT article that this move is surprising — sort of — considering Apple’s earlier comments that it was going to be more “collaborative, not less, with magazine publishers and other content producers that want more control over how to distribute content on the iPad.”  But then, considering that I still have to wonder about the timing of the Agency Model and release of the iPad, it really doesn’t surprise me either.  Apple has long had a reputation of not working well with others when it comes to software and peripheral development for its computers.

Since I brought up the Agency Model, here’s an article about an investigation into the Agency Model as it exists in Great Britain.  Hopefully, this investigation will go faster than those occurring at the state level here in the US of A.

The power of social media has once more reared its head and, this time, has been struck down.  A Facebook cause to raise money to help support Harper’s Magazine brought in $50,000 in donations.  Attorneys for the publisher rejected the offer.   For more information about events leading up to this latest development, read here and here.

I’m off now to find more coffee and then it’s time to get to work.


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