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The agency model’s impact on ebook pricing

Literary agent Simon Lipskar explains why the DOJ got it all wrong

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The agency model has played a key role in ebook pricing models, and the DOJ’s recent ruling has generated a large number of responses from the community. One of the more interesting ones was from Simon Lipskar, President of the Writers House literary agency. I invited Lipskar to participate in a TOC podcast interview so he could talk further about his letter to the DOJ as well as where he sees the ebook market heading.

Key points from the full video interview (below) include:

  • Agency model and ebook prices — Simon objects to the discount restrictions in the DOJ settlement terms, but he also believes the DOJ has “clearly misread the landscape of ebook pricing.” [Discussed at the 2:15 mark.]
  • Did agency drive prices up? — Yes and no. Yes, prices increased for the small list of titles the DOJ cited, but no, prices did not go up across the board. Further, many other factors are forcing ebook prices lower, despite the presence of the agency model. [Discussed at 1:34.]
  • Another small snapshot shows lower prices — Although arguably no more scientific than the DOJ’s approach, Simon compared ebook prices on the Amazon best-seller list to pre-agency levels and arrived at a different conclusion. [Discussed at 5:10.]
  • The role of “market power” — In reality, the “big six” publishers don’t have the same market power in the ebook world that they have enjoyed in the print world. [Discussed at 10:28.]
  • Competition is driving prices down — The “explosion” of ebooks is having more of an impact on pricing than the agency model. [Discussed at 15:40.]
  • Is price-setting by publishers a good thing? — It’s unusual in the physical product world, but that aspect of the agency model makes plenty of sense in the digital world. [Discussed at 22:55.]
  • “Distributed sales” is the future — Simon believes the underlying assumptions we have about how ebooks are sold will be changed as we move away from destination sites dedicated to ebooks. [Discussed at 33:03.]

You can view the entire interview in the following video.


This post is part of the TOC podcast series. You can also subscribe to the free TOC podcast through iTunes.

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