How Agency Could Actually Lower E-Book Prices, According to Smashwords
Mark Coker from Smashwords offers a long explanation of why he thinks Agency pricing actually lowers the cost of e-books for consumers. He offered this explanation in an hour-long call with the Department of Justice this week (Does Agency Pricing Lead to Higher Book Prices?):
Yesterday I had an hour-long conference call with the DoJ. My goal was to express why I think it’s critically important that the DoJ not take any actions to weaken or dismantle agency pricing for ebooks.
Even before the DoJ investigation, I understood that detractors of the agency model believed that agency would lead to higher prices for consumers.
Ever since we adopted the agency model, however, I had faith that in a free market ecosystem where the supply of product (ebooks) exceeds the demand, that suppliers (authors and publishers) would use price as a competitive tool, and this would naturally lead to lower prices.
I preparation for the DoJ call, I decided to dig up the data to prove whether my pie-in-the-sky supply-and-demand hunch was correct or incorrect. I asked Henry on our engineering team to sift through our log files to reconstruct as much pricing data as possible regarding our books at the Apple iBookstore.
…
In plain English, we’ve seen the average price of books in our catalog drop from $4.16 in October 2010 to $2.97 today.
Read more at the Smashwords blog.
