As we all know book publishing industry is going through one of the biggest industry defining change in last 100+ years. When the industry seemed all ready to go ahead with the ebooks (with Amazon successfully launching and selling kindle and kindle books) Apple decide to disrupt the party with its announcement of launch of iBook Store through iPad and by signing Agency model (a pricing mode were publishers decide at what price they want to sell their books to the end users contrary to the normal distribution deal that publishers had with Amazon where publishers sell these books to Amzon at normal discount on list price and Amazon can sell it to publisher at whatever price) deal with Top 5 publishers (all the top except Random House)
The ebook pricing model is going through an interesting time with Apple trying to talk to publisher (both small and big) to go for agency model (which means 70% for publisher & 30% for retailer split) and get an assurance that they will not sell the same book at a lower price through any other retailer (read Amazon). Amazon on the other hand has made it clear that it is not going to sign Agency model deal with any one except the Top 5 Apple publishers. This has left Publishers in a dilemma.If they go for Agency model with Apple they will not be able to sell through Amazon because Apple deal will not allow them to sell the same ebook at a lower price anywhere else and if they do not sell through Apple then they are increasing the power of Amazon even more.
The solution to this stalemate is
1. Apple becomes more flexible and decides to have a mix of both Agency and normal wholesale model (offer similar revenue split for agency and normal wholesale model i.e. 70%/30%)
2. or Amazon is fine with Publishers doing Agency agreement for ebooks sales.
Next few months are going to be really interesting as Amazon will try its best to use its clout in print books to arm twist mid and small publishers in staying away from Agency model and Apple will try its best to make its ebook offering best by having as many publishers in the program as possible. The third big player in this game is Google. It will interesting to see which way will Google go with its Google Editions offering.
Lets wait and watch and enjoy the game. My bets are on Amazon 🙂