The DOJ Charts the eBook Market Before & After Agency
If you have ever doubted whether agency pricing resulted in an increase in ebook prices, I have a chart that should interest you.
The US Dept of Justice filed new docs this week in their case against Apple and its 5 co-conspirators. The filing is titled Plaintiff’s Proposed Findings of Fact and Conclusions of Law, and this 103 page PDF lays out the arguments that the DOJ plans to make should this case go to trial.
The filing includes details on how the DOJ believes the conspiracy came about, and it includes emails that the various publishers sent to each other as well as other evidence.
Mixed in with the dry legal arguments were a number of charts which were created by Richard Gilbert. He’s the Emeritus Professor of Economics at Berkeley University, and his charts show how the average price of ebooks increased when the 5 publishers adopted agency pricing.
The above chart is drawn just from Amazon, but since the prices of the agency ebooks were the same across the market that is not so important. But it is still worth noting that the average ebook price for Random House and the non-majors probably does not reflect the pricing at other ebookstores; those 2 lines reflect wholesale pricing and not agency.
Still, the chart shows a steep increase, does it not? There is a table later in the filing that shows that ebook prices at B&N similarly increased as a result of agency.
According to the filing, here is how the data was generated:
To measure the change in price attributable to the shift to agency, Professor Gilbertcalculated the weighted average price of all Publisher Defendants’ titles in a one-week period shortly before, and another one-week period shortly after, the effective date of the Apple Agency Agreements. Measuring the difference between the two periods, he found that prices increased by 18.6% at Amazon and by 19.9% at Barnes & Noble in the weeks following the move to agency.
The data in the above charts comes as no surprise to anyone who was buying ebooks at the time, but it does also stand as a reminder just how customer-unfriendly the Agency eBook Model really was.
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