I'm not convinced this is over. Amazon has still not made any sort of public statement other than the original, laughably incompetent unsigned "capitulation" note on the Kindle boards over a week ago. This compared to two formal public statements from Macmillan USA CEO John Sargent. I am very disappointed that the popular and business news cycle has focused almost exclusively on this as a "price increase" narrative, apparently single-sourcing from the Amazon note. I guess that makes better copy, but it ignores the much larger underlying story about a potentially seismic shift in the business models of publishing forced by the growth in ebooks. A shift which has benefits to consumers, as well as the exciting narrative of overturning Amazon's $9.99 pricing model.
As for my own part, I'm finally coming around to thinking Macmillan has the right of this. tnh's explanation of the "agency model", combined with earlier squibs from Charlie Stross, have largely convinced me. I will lay out my own thoughts on this in the next day or two as the chemo fog continues to clear my brain, but I want to make one point here.
The $9.99 ebook price point was not set by market forces. It was a fiat promise from Amazon to Kindle buyers as a driver to promote the Kindle platform. There's nothing magical about the number (beyond the obvious buying psychology of $9.99), and it had nothing to do with either publisher costs or publisher business models. For the media to be treating this as all about a price increase from $9.99 ignores both the history of the price point and the current business reality of publishing. It may well be that $9.99 is an eventual 'market making' price point, but that's not yet been proven. And for all that Amazon lost the boardroom PR war by not even showing up to the fight they picked, they've sure won the popular PR war so far, given the prevalence of the "price increase" narrative.
That's probably enough out of me this morning, but I'm curious. What's your take on the "agency model"? Am I right about the $9.99 price point? Am I right about the strong pro-Amazon bias in media coverage?