The launch of the iPad and the implementation of the agency model has led to wildly varying prices for e-books. The agency model allows publishers to set the retail price of their e-books and designate an "agent" who will sell the book at retail and collect a fee for doing so. While the new pricing model has allowed certain publishers to take away control of e-book pricing from Amazon—publishers complained that under the old wholesale model, Amazon's $9.99 e-book price point was too cheap and cannibalized print sales—it has also left consumers with a sometimes bewildering patchwork of inconsistent pricing. ...I, for one, think $9.99 remains the reasonable upper threshold for eBook pricing, with plenty of profit built-in for everyone. What's more, the notion that eBooks "cannibalize" print sales seems absurd. Big picture: Print is in decline, digital in its ascendancy. Get used to it.
In the end, the price will be set by market demand, just as it always has been. Note this from Jeff Bezos's recent Fortune interview:
Fortune: In the past, you've been a big proponent of lower prices for ebooks and an open opponent of the book publisher agency model, which allows the publisher to set the final retail price whether there's an intermediary retailer or not. Now that you've switched to an agency model, will ebookstores like Amazon's get hurt?
Bezos: No. First of all, there are a bunch of publishers of all sizes, and they don't all have one opinion. There are as many opinions about what the right thing to do is as there are publishers. So you're seeing that some of them are being very aggressive on prices, pricing their books well below $9.99.
Others are trying to do everything they can to make prices as high as possible. And what you're going to see is a share shift from one group of publishers to this other group of publishers.
Fortune: Do you expect a significant share shift? When do you see that happening?
Bezos: It's a significant shift and we're seeing it already.
