To mark the one-year anniversary of what it calls “the Great Blackout”--when Amazon pulled the buy buttons from Macmillan’s titles to protest the publisher’s adoption of the agency model--the Authors Guild is doing a series of member alerts looking at “the state of e-books, authorship and publishing.”
The first, called “How Apple Saved Barnes & Noble. Probably.,” argues that by adopting the agency model rather than the traditional wholesale model for the sale of e-books, Apple prevented Amazon from using its ability to absorb losses on the sale of e-books to achieve a insurmountable position in the e-book retail market. The Guild says it was unlikely that B&N could have competed effectively with Amazon in the e-book market if the battle was only going to be about price since Amazon was (and is) much better positioned to offer steep discounts on e-books than B&N. The implementation of the agency model enabled B&N “to enter the e-book market based largely on its customer relationships and on technological innovation, rather than on its willingness to burn through capital to subsidize book sales,” the Guild says. The result has been expansion of B&N’s share of the e-book market and a chance to “regain its footing” in a challenging time for bookstores.
The Guild warns, however, that it’s not clear sailing for B&N. “Should the agency model ever collapse, however, Barnes & Noble could quickly find itself at Amazon's mercy. Amazon's growth and profitability continue to soar, and its appetite for out-discounting competitors at any cost appears undiminished,” the Guild concludes.
To read the entire essay go to tiny.cc/s6433.
