Hachette Book Group migrating to agency model (updated)

Update: Larry Dignan has posted all of the background information on the situation over at ZDNet's Between the Lines.

Apple's agency model and its iBookstore have upset the applecart at Amazon, who sells books via a more traditional "wholesale model" where the it sets the price and gives the publisher a commission. In a previous post I described the benefits of the "agency model" that Apple uses with App developers. In essence, the developer sets the price and Apple collects a flat 30 percent off the top

In the days following the iPad announcement, print publishers have begun bailing from Amazon in droves. Hachette's Book Group is now the third major publisher, following MacMillan and HarperCollins, to push for the agency model.

Gizmodo reports that the move could mean the end of the $9.99 book. The conventional wisdom is that publishers will set the ebook prices first proposed by Apple—from $12.99 to $14.99. I suspect that Penguin and Simon & Schuster will follow suit and that Amazon will be forced to migrate to the agency model and match Apple pricing.

Apple's iPad has already begun shifting the dynamics of print publishing, putting price control back into the hands of publishers—and its not shipping for two months.

Tip and photo: Gizmodo