The Possible Death of Agency Pricing

Agency Pricing seems to be dying.

Agency as we knew it is on its death bed. Penguin titles are now being discounted by retailers and the rest of Penguin Random House titles will soon follow. – Agency Dead? Penguin Ebooks Discounted

Scales of JusticeSome say this is a good thing.

“The consumer is the huge winner,” said David Balto, a Washington antitrust lawyer and former policy director for the Federal Trade Commission. “Apple’s policies clearly increased prices, and if permitted Apple would have used this formula to raise prices in numerous markets. This is a landmark decision that demonstrates the value of strong antitrust enforcement.” – Apple case cracks open e-books, digital goods pricing

Some argue against.

Even if true, the Justice Department’s argument is weak, because it relies on the Relevant Market Fallacy — the idea that e-book sellers are just competing with each other. They aren’t. They are competing with everything else that is clamoring for people’s leisure time. This includes printed books, magazines, newspapers, blogs, and websites such as this one. E-books are also competing with movies and television, video games, and other tablet and smart phone applications. The relevant market is bigger than just e-books or other reading material. This market discipline puts an upper bound on what consumers will pay for an e-book before turning to other entertainment options. Consumers cannot be said to have been harmed if they are willing to pay higher e-book prices. Given the e-book market’s continued rapid growth since the price increases, people are clearly still willing to pay. They are willingly buying something that gives them more value than what they give up to buy it. – Apple’s ebook ruling and the absurdity of antitrust law

Just to recap: I find the first argument more compelling.

Photo Credit: DonkeyHoley

 

Posted by Michael K Pate

Michael K. Pate tends to spend a great deal time of time around computers. He has been a Librarian since 1997. Michael was born in Avon Park, Florida in 1966. Except for a couple of brief periods in his life (once in Tampa and once in Winter Haven/Haines City), he has been a life-long resident. Originally, he planned on a career as a Computer Programmer and therefore graduate from Webber College with a Bachelor of Science in Computer Information Systems in 1988. However, unhappy with career opportunities at the time, he soon returned to school and received a BS in Social Science Education from the University of South Florida. He began his career in education at Avon Elementary and later Avon Park Middle working as a Computer Lab Coordinator. While technological challenges were interesting, he found himself more and more interested in becoming a Media Specialist. He began work on his MLS in 1995. However, a summer internship at the Sebring Public Library in 1996 soon made him reconsider just what his career should be. Upon graduation in 1997, he secured a position as a Media Specialist at Eastside Elementary in Haines City. Eventually, the position he was looking for opened up and he returned to SPL as Reference Librarian in 1999. In 2003, he became Assistant Director of the Highlands County Library System, serving in that role until the position was eliminated during a late round of budget cuts in 2010. Since then, he has been the Computer Support Specialist for the Heartland Library Cooperative. In 2011, he began serving on the Board of Directors of the Tampa Bay Library Consortium.

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