Hachette is the next publisher to abandon the $10 e-book model, predictably following the path of Macmillan and HarperCollins.
It was easy to see this coming after this week’s face-off between Amazon and Macmillan. The retailer had been purchasing Macmillan books wholesale and selling Kindle e-books for $10 each. Macmillan, perhaps motivated by the ability to set its own prices on Apple’s iPad, declared that it wants to set its own prices, including bestsellers at $13 to $15 each. Amazon staged a short protest by removing Macmillan books from its Web site, but then relented, letting Macmillan have its way with the so-called “agency model.”
It’s no secret that publishers weren’t happy with Amazon’s wholesale model to begin with, so it was only a matter of time before they followed in Macmillan’s footsteps. First, HarperCollins said it will be renegotiating with Amazon to sell e-books at higher prices. Now, Hachette Book Group has announced a switch to the agency model, along with the same $13 to $15 pricing for bestsellers.
As publishers settle on the agency model, it’ll become harder for consumers to vote with their wallets, because pricing will be standardized for all major publishers and booksellers. E-book pricing is essentially mimicking what happened with digital music, where labels eventually settled on a price of 99 cents for most songs and $1.29 for popular tracks, and then enforced those prices across all online stores, from Amazon to iTunes.
Contrary to what I said before, the higher prices may have some advantages for consumers. Macmillan chief executive John Sargent saide-books will now be released concurrent with the hard copy, so no more frustrating e-book delays just to drum up hard copy sales. Sargent also said some e-books will be priced as low as $5.99. I hope those claims prove accurate, and that the other publishers adopting an agency model will follow suit. Since consumers will have little choice going forward, those perks are better than nothing.