Publishers Adopt Agency Model for e-Books

Interesting article by Mike Shatzin about the evolving channel pricing model for e-books. Publishers evidently sell books to retailers at roughly a 50% discount and retailers are free to mark it up wherever they like. With e-books, 5 of the 6 largest publishers forced Amazon to adopt an agency model where the publisher sets the price and the channel’s margin. This is a good example of the suppliers, in this case the publishers, realizing their value without ceding that value and the corresponding margin to the channel.