Ebooks, Amazonians, Models, Penguins, and Apples

The New Deal

This weekend the news came through that Penguin, who has hesitated to leap into the ebook market without a viable pricing model, had finally reached a deal with Amazon to sells its content on the Kindle. Despite the deal, the questions remain-

1) who is in control of this new industry and

2) will content need to conform to whatever limits the new industry presents?

Which Price is Right?

The question of dependable (and profitable) pricing models has preoccupied the major publishing houses for decades. The newest fad is Apple’s suggestion of the so-called “agency model”. Following this model, the publisher will decide the price of a title and takes a 70% cut, with the remaining 30% of the profits going to the retailer (or app, if you’re thinking ahead). A great description of how the model is intended to work was provided my Mike Shatzkin on Idea Logical.

Apple is reported to have adopted the agency model with the five publishers it has initially signed up – HarperCollins, Hachette Book Group, Macmillan, Simon & Schuster, and now Penguin.

In last month’s New Yorker, Ken Auletta provides the best overview I have read so far about the publishing industry, its business model, and it’s tenuous new relationship to the electronic platform revolution. The article breaks down the complicated attachments to the newly-minted power brokers of  the industry:  Amazon the pioneers of the ebook frontier, and Apple, who threw their hat in the ring with the iPad.

The article provides the clearest and simplest overview I’ve yet read where the industry finds itself. For the full article, visit newyorker.com.

  1. June 26th, 2010

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