PC World did an interesting article about ebook pricing and the agency model. Apparently, the Justice Department could be bringing an anti-trust suit against Apple and the 5 major publishers who have allegedly been fixing ebook prices.
Right now, if you are self-publishing or are a small publisher who does not have the clout to tell Amazon, B&N, or Apple what the retail price of your ebook is, you have the option to price it between 2.99 and 9.99 (for the best ebook royalties). Apple will not allow deviations from this range unless the hardback’s price is over $20.99, and then it goes up incrementally by $1 for different price ranges. If you offer it at 9.99 on Apple, you must also offer it for 9.99 on the other outlets, or you are in violation of your contract with Apple.
Now, if you are publishing on Amazon or Barnes & Noble, you must price your ebook between 2.99 and 9.99 for the best royalties (70% less delivery fees for Amazon and 65% on B&N). Go outside this range and your ebook royalties drop to 35% for Amazon and 40% for B&N.
In effect, working with a combination of these 3 outlets forces you to price your ebook in the magical 2.99 to 9.99 price range….that is, unless you are happy with making much less on your ebook sales.
There is zero fairness in this pricing model.
What I’d like to see is the free market taking over. Let publishers and self-published authors price their books however they see fit. The outlets get whatever their published royalties are – exactly the same across the board for all publishers and prices – and let the READERS determine what a fair price is.
And while I’m making a wish list, I’d also like to see Amazon drop the delivery fee on ebook sales. It’s quite unfair going forward, with video and audio-enabled ebooks being possible on the Kindle Fire. I don’t know that 70% royalty rates will make any sense if you have to pay a monster-sized delivery fee out of your profit.
Amazon delivery fee conspiracy? Perhaps – get this: if you use Calibre to convert your epub file to mobi, the file size stays about the same. BUT, if you use Kindle Previewer (supplied by Amazon) to convert your epub to KF8 (or any other Kindle format, the only software I know of that converts epub to KF8), it greatly increases file size, in some cases DOUBLING it!!
This is patently unfair and I would suggest dishonest on Amazon’s part. (I love Amazon, by the way, I just think they’re wrong in this case).
As a publisher and author advocate, I’d like to see the main sellers of ebooks do what’s best for customers and content providers – have an across-the-board royalty, no delivery fees, and no caps or constraints on pricing. Let the free market decide what prices should be!