So, RIP the Agency Model. You won’t be missed. What is simply staggering is that publishers thought they could rewrite the laws of capitalism by trying to set the price of a product that they were not actually selling.
The fact that it has happened in the same week that Amazon has bought Goodreads adds to the sense of unease. It is almost impossible not to feel that in one corner we have an all conquering behemoth inexorably crunching the bones of its enemies and in the other corner we have err, publishers.
I blogged on the subject of the agency model exactly a year ago – so can claim consistency in this. Maintaining the price of books is a good idea. Trying to do so in a way that simply ignored market realities was, well, not ever likely to succeed, shall we say.
One of the points I raised a year ago was that if publishers wanted to have more control over price they really ought to start looking at selling books themselves. And it is good to see that two of the big five, are now selling books direct from their web sites. That does still mean though that three of the others still go to all the expense of creating these fancy shop windows and then sending their customers to the shop next door when it comes to the sordid business of money actually changing hands.
In fact in one instance I couldn't actually work out how to buy the book I clicked on at all and one of those who do sell direct make it curiously hard to actually find the books on their web site. More importantly, I visited the web site of a big British brand author from each of the publishers who do sell direct, – i.e. the place the consumner is actually likely to go (even if you are a publisher with some consumer brand value) - and on neither of those author web sites is the publisher listed as even a possible retailer let alone a preferred one.
So I think we can be confident that Amazon aren’t actually quaking in their boots just yet.
The real worry is that Random House US do not allow visitors to their web site to buy books from them, because the only good thing about the Penguin Random ‘merger’ from an author and agent perspective is if it results in them deciding they can take Amazon on – and the only way that can happen is if they move to become a retailer in a major and decisive way.
The story of publishing over the last five years has been a story about disintermediation: publisher disintermediation. Publishers have come to be portrayed as a 'legacy' - something bequeathed to us from the past.
The fact is though that retailers are every bit as vulnerable to disintermediation as publishers. More so. Publishers have so much value to add - how much value does Amazon really add?
Despite their size Amazon are far more structurally vulnerable than they might seem, and without wishing to come over all Kevin Keegan (because it got him nowhere), I would really love it if publishers could turn the tables, even just a little.