The big news of the last couple of weeks is not really the much ballyhooed iPad (my personal jury is still out on if I see it fitting in my bag of electronic tricks) but it's really the new model Apple is launching for selling eBooks. It's an agency model, which is defined as projects funded as a fee-for-service by clients, who either use or re-sell the content, is the model currently used by Apple's iTunes App Store, where Apple takes a 30% cut on all sales made. This, of course, allows the publisher--either of an app or a book--to set their price and Apple abides by this and just takes their pound of flesh.
I've always thought that Amazon's Kindle eBook model was just the old wholesale model in disguise. But rather than having to share a significant portion of of book revenue with others in the supply chain, Amazon just took all that was left after the publisher and the author's cut, which left them a 50% share. When Amazon was the only game it town they got to write the rules. Amazing how having a new player in the market can change things.
While I hardly blame Amazon for getting maximum return for eBooks on the Kindle for as long as they could, I do think they were a bit short-sighted to think that embracing an old wholesale model could last. Now they have publishers like Macmillan very ready to call the bluff and Amazon blinked last week, and appear to be ready to let Macmillan set their own price for eBooks.
When I first got into the publishing marketplace, I was quite surprised by a model that allowed retailers to buy and then return books that don't sell for full credit. It's not only a hard model to sustain, it's also environmentally flawed, allowing for large percentage of books to be warehoused and, eventually, repulped instead of sold. But buying lots of copies in large, single runs, is the way to keep costs low and that's why it's the right model for best selling authors. But in a new world of publishing those are the only folks who will be getting the volume benefit, with the rest of industry going POD more and more often with companies like Blurb, Author Solutions, and Lulu.
When Blurb launched our Set Your Price program, we recognized this shift in thinking. We allow authors to keep 100% of the markup on the production price of the book, allowing authors to set their price at whatever the market will bear. But the model is not perfect in a world that rich content, color books still cost too much to create. As Michael Norris, Senior Editor and Analyst for Simba Information's Trade Books group told Publishing Business, people still think ink-on-paper books cost too much in general. And that's one of our big goals at Blurb--to continue to influence the supply chain to enable more and more fledgling authors to get their works in the hands of an eager public.
We take this idea of "democratizing publishing" very seriously. We live it every day. And moving the industry to more of an agency model is what will keep the industry healthy for years and years to come.