Why the Agency plan worries Random House & why authors should worry

At Teleread (a great site to keep up with daily), this question was posed.
  Does Random House fear agency pricing because it gives authors too much information?

Two of us didn't think that was the reason.  The following is my response in connection with why Random House (at this time) appears to be avoiding Apple's Agency plan in favor of Amazon's traditional wholesaler plan which offers Amazon customers lower e-book pricing on NY Times bestsellers.

  (On the other hand, there's still time for Random House to change its mind for iPad-day tomorrow morning.)  Here's what I posted there in connection with why I think Random House is hesitating to sign up with Apple's iBookstore and why authors with other large publishing houses should be concerned too, no matter what their publishing houses tell them.

' It's so simple, and Random House sees it.

  For a $22 list price e-book (surprising how many are listed at that high a price), TRADITIONAL WHOLESALER arrangement usually gives publisher 50% of the publisher-set list price, or $11 in this case [from Amazon]. If Amazon sells the e-book at $10 Amazon takes a loss -- loss leader method.

Publisher gets more than [the $10] selling price to book-customers. It's a guarantee [of $11 for the publisher] even during special sales.

  Publisher and author still get $11 regardless of what the bookstore sells the book for.

  AGENCY: For a $22 e-book sold at $14 "Agent" gets 30% commission on fixed-price, or $4.20.

  Publisher gets $9.80 -- less money to give to the author.

  ($11 goes to publisher on the wholesale plan on a [$22 list-price-book even if it's sold as a] $9.99 book, which is more likely to sell than a higher-priced one.

  $9.80 goes to publisher on a $14 ebook NOT likely to sell and even if it does, there's less to give the authors.

  [The publisher] gets to say the e-book is more 'valuable' -

but, as mentioned, the customer is likely NOT going to buy the $14 e-book and so the publisher/authors get even less than that.

  Random House is not stupid. The examples are for the same e-book selling at (first) $10 under the wholesaler plan -- traditional -- and (second) at $14 under the new Agency plan.

 That's more like best scenario for the publisher using the agency plan -- they get even less when the book price IS reduced to $10 or $12. '

($7 or $8.40 instead of $11)

(Adding for the blog)
  The Big 5 publishers seem to hope people will decide to buy the hardcover books under that scenario -- more for almost the same price, on discounted hardcovers -- or at least easily pay the higher ebook price.
  They're in for a big surprise if so.

British Library, Apple iPad pricing, Nook update, Macmillan ebooks

This is an update on the British Library project and some reactions to it. Crunchgear's Devin Coldewey has a personal reaction to it which matches other ones that I saw in Twitter discussions but he has a bit more room to describe it.

  Momentarily forsaking computer-gadget-blogspeak, he writes:

' Got a Kindle? Get thee to the British Library! Not only are they giving away a ton of old 19th-century literature in e-book form, but they’re a special “first edition” e-book with the original typeface and illustrations baked in. The 1800s encompass nearly all of my favorite literature, so this is actually making me want a Kindle pretty bad right now. Original typefaces! O lawd!
...
... Whatever the case, they’re going to be beautiful copies that make good use of those high contrast e-ink screens ... They’ll be made available in the spring, at which time I’ll probably post again because I love love love this. '

I'm puzzled by what the Library and Amazon have decided on as the file format, since Amazon's normal generic font is used in all books except for the 'Topaz' ones (.azw1) which use embedded fonts but those would be simulated.

  If PDF (and with longer loading time and fatter e-books for image-scans) those would be available on other e-readers, though of course even if they're free to Kindle-book buyers, Amazon might put their own DRM (Digital Rights Managemetn) on them for these specially formatted files.

 There's also the remote possibility of Blio, which will be supporting PDFs and EPub and is focused on preserving a book's original format - layout, fonts and images...  Who knows?  But I imagine Amazon has something up its sleeve.  I'm personally hoping Amazon supports non-DRM'd ePub format files very soon, for its own sake.  If not, the first developer app I'd want to see is one that converts ePub files, upon downloading them, to Amazon's basic MOBI format (the way it's easily done by users via Calibre).

WIRED: APPLE WOULD CONSIDER LOWERING IPAD PRICE IF INITIAL SALES ARE SLOW
Wired/Gadgetlab's Brian X. Chen writes that Bill Shope of Credit Suisse, in recounting his meeting with Apple executives, said that "Apple indicated it would consider lowering prices if initial demand appears to be slow."  Actually, that was credited at the bottom of the article to the Wall Street Journal's Matt Phillips, who has a quote here:

' “While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated),” Shope wrote. '

  The reason that's of interest is that various analysts have adjusted down their sales estimates for the iPad since it was launched after various features expected were missing from it.  As a thin/light web-browser (w/o flash support, multitasking, USB ports) for at home networks, at a lower price, I'd get one - but not for book-reading.

NOOK NOW BUYABLE AT THE BARNES AND NOBLE STORES - BUT A CAUTION
As a card-carrying Barnes and Noble member and hoping to see them survive some very tough times currently (3 of 4 stores in my area closed this year), I wish they would invest more time in Quality Control.

All this time, with personal documents, there has been no way to sort the nook files by title, author or anything else.  We give Amazon a bad time about the lack of folders but at least the Kindle had sorting by Title, Author, and Most Recent (the Nook doesn't have the latter at all) since the beginning.

  When the nook was new and the reviews weren't exactly ecstatic, they released firmware version 1.1 to fix initial problems, and it was quickly decided that yet another firmware update should be done because suddenly the Adobe digital-rights reading was not working with libraries anymore -- but there was an easy workaround for that.

 Still, they then released v1.11 suddenly and w/o fanfare to correct that.  But, as a result, something else was broken in the code, and the Barnes and Noble forums became filled with reports of bookmarks and annotations being lost, paragraphs and pages missing, and more problems though nook users are very patient, since the unit has other qualities they like and which are important to them.

 I went to see how firmware version 1.2 is faring since it was released just yesterday to nook owners after the store models were updated.

Here's the current page of reactions to that update and there are some workarounds that nook owners are recommending to others as they encounter new problems.  This is the actual current page of discussion of the new update when I went to look just now (page 10).

BUY BUTTONS FOR MACMILLAN KINDLE BOOKS ARE BACK ON MOST OF THEM
There are many reports that the ebooks have been showing up and that the prices (some had pre-orders before the brouhaha) are as they were before the negotiations with Macmillan's insistence on the higher pricing for best sellers.

In the comments areas, PRW has been reporting on personal tracking of a couple of Kindle books and noted the pricing is now as it was.  News reports are that the higher sell-prices for Macmillan books -- and for other publishers' who want the same deal they get with Apple or they'd delay e-books for many months -- should take place in March 2010 with no further ability by Amazon to discount those books under Steve Job's and Macmillan's "Agency" program for customer prices set by the publisher with the bookstore now out of that area.  Macmillan has said that ALL its book partners have agreed to the new Agency plan and the higher pricing.  That would include Barnes and Noble.