We're going to keep grinding our way through the idiosyncracies and challenges of life under the agency model, understanding that all of this is a constantly moving target.
While Random House has gotten all the attention as the biggest trade publisher whose titles are not available via the just-launched iBookstore, it should be underscored that so far, very few companies of scale outside of the Agency Five have a presence there. In addition to those already announced--Perseus, Nelson, Workman, Sourcebooks, and F+W--we found lists of titles from Hyperion and Kensington (henceforth known as the Non Five).
But the list of absent publishers is much larger. For now it includes Abrams, Andrews McMeel, Bloomsbury, Chronicle, Harlequin, Hay House, HCI, Houghton Mifflin Harcourt, Norton, Regnery, Rodale, Sterling, and Wiley. Also missing are prominent Perseus distribution clients like Grove/Atlantic, rising indie publishers like Quirk and Skyhorse, and all the big university presses.
We know that at least some of the publishers listed above are far along in their discussions with Apple and hopeful of reaching agreements soon. Among the issues are Apple's hardcover price parity requirements balanced against Amazon's reported unwillingness to negotiate changing to an agency model with any companies outside of the Agency Five, plus the time period Apple gives publishers to change their pricing with other customers to comply with Apple's agreement.
While the Non Five we reached declined to discuss their plans and conversations about terms, the current state of play is more or less self-evident. Apple's published terms of use indicate they are an agent for all books in the iBookstore, just as Amazon clearly denotes when the ebook is sold and priced by the publisher rather than Amazon. If you check the Amazon listings for Kindle titles from any of the Non Five, you'll see that they are still sold by Amazon.
While the Agency Five have moved to agency terms across all their ebook retailers, the Non Five are currently driving a hybrid model: agency for Apple, and wholesale everywhere else. The big question--for the Non Five as well as for other publishers still negotiating with Apple--is how long and how well a hybrid model is sustainable.
Some of it has to do with the nature of a company's list--both the frontlist versus backlist mix, as well as the reliance on high-profile new hardcovers versus paperbacks. And publishers know--even if consumers and the Pricing Police have failed to recognize--that a lot of their ebooks sell for more than $9.99 all the time. By at least one account of the Apple contract, the company's requirement that their price match the lowest price in the market applies only to hardcovers in their new release window, not paperbacks. Yet at least some contracts with Amazon and other legacy etailers also require that a publisher's ebook list price be set no higher than at other accounts. So there are potentially irreconcilable price requirements between Apple and wholesale ebook contracts. (Feel free to have a side discussion here with counsel about your consumer price versus your digital list price.)
In early not for attribution discussions, we've heard both sides of the coin: some companies are inclined to believe that, while less desirable, they can sustain a hybrid sales model at least while the market takes shape and there is more time to negotiate across their vendor relationships. A hybrid model can mean taking some form of financial hit--but for many people, a full agency model also involves some financial hit. But others see the hybrid as both costing them too much money and presenting too many monitoring and compliance issues to avoid breaching the Apple agreement. Most people willing to discuss it envision a hybrid model as a temporary solution only--though it could well be the prevailing temporary solution.
In the early experience of one publisher, even trying to execute price parity and keep metadata up-to-date across the supply chain is looking problematic, at least in these transitional days. Last Friday, before the iBookstore went live, Sourcebooks diligently sent data feeds to Amazon, Barnes & Noble and others to update their stated digital list prices to match their Apple iBookstore pricing.
But a search this morning of Sourcebooks titles at other major ebooksellers revealed an assortment of discrepancies. Some books--like Mr. Darcy's Diary--successfully show the new lower digital list of $9.99 at both Amazon and BN.com. But in that case, Sourcebooks' attempt to establish price parity has been undercut, with both Amazon and BN.com selling the ebook for $7.99, as is their right under their existing wholesale arrangement.
Other titles--like My Dearest Mr. Darcy and Mr. Darcy's Great Escape--still show the old digital list price of $12.99, instead of Sourcebooks' new pricing of $9.99. Yet other titles still--like Mr. & Mrs. Fitzwilliam Darcy: Two Shall Become One, have disappeared entirely in ebook form from both Amazon and BN.com, and titles like The Other Mr. Darcy are gone from Amazon only in ebook form.
Sourcebooks publisher Dominique Raccah was contacting accounts this morning to try to determine what had happened. She observed, "Clearly this is complicated. We knew it was going to be complicated." But Raccah underscored, "My goal is to have my authors' book available on any device, at any time, anywhere. That's the committment we're making to authors." Echoing remarks by O'Reilly Media ceo Tim O'Reilly at the recent Tools of Change, she said part of what publishers offer to authors is "the wrestling with these things. And indeed, we're wrestling with it."
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