The Agency Six

In case you haven't heard, mes auteurs, the last Big Six holdout on the agency model—Random House—has capitulated. Effective this month, their e-books are now being sold under the new pricing system.

What does this mean for you, gentle readers?

As Consumers

It means two major things: one, you'll likely be able to purchase Random House's titles directly from the iBookstore, and not exclusively through a third-party app like the one Amazon has for the Kindle; and two, you may be paying slightly more for your e-books.

As you may recall from my earlier post on the subject, the agency model treats the retailer as a middleman making a commission, not as a vendor setting his or her own price after purchasing goods wholesale. This means that rather than buying an e-book from the publisher at a predetermined discount and selling it to you at however low a price they want, retailers must now sell Random House's e-books at the publisher's price, keeping a 30% cut for themselves and sending the remainder to the publisher.

Many have speculated that this move is likely fueled by Apple's unveiling of the long-awaited iPad 2 (you can follow the event live here). If this is the case (and I don't know if it is, since the involved parties aren't commenting to the media), it would seem to betoken a certain amount of faith in Apple's business model.

As Authors

Again, this is pure speculation, but I imagine e-book royalties may be affected by this move. And not just for those of you with Random House book deals: now that the world's largest trade book publisher has signed off on the agency model, I imagine a slew of smaller publishers will follow suit. If any of you, gentle readers, know more about this than I do, please feel free to educate me/your fellow readers in the comments.

I'm also curious to see how this vote of confidence in the Apple program influences iBookstore sales. Should Apple eventually sport e-sales figures on par with those of Amazon, I think the increased competition could speed up the shift toward market parity (that is, equal dollar sales of physical and electronic books). My current guess is that 2011 will see e-books top 10% of the overall market, and that 50% of the market will comprise electronic books by the middle of 2014.

Finally, I imagine Amazon is unhappy about this, since it seriously undercuts their ability to set prices in the industry. However, they, too have not officially commented (as far as I know).

What do you think, mes auteurs? And more importantly—are you getting a second generation iPad?