Hachette formally adopts 'agency model'

Hachette formally adopts 'agency model'

Feb 05 2010

Hachette Book Group USA became the second major U.S. publisher to officially announce its intention to move to an agency model for the sale of e-books. Although, unofficially, 5 of the 6 large US publishers effectively indicated that they would do this when they signed with Apple last week. For those who are unsure what the 'agency model' is, here is an explanation borrowed from zdnet.com:

The 'agency' model is based on the idea that the publisher is selling to the consumer and, therefore, setting the price, and any 'agent', which would usually be a retailer but wouldn’t have to be, that creates that sale would get a 'commission' from the publisher for doing so.

The wholesale model, on the other hand, is when the publisher 'sells' the book to an intermediary (i.e. Amazon, Borders, B&N) based on the publisher’s established retail price and a discount schedule, typically around 50 percent. Then the purchaser resells that e-book at whatever price they like.

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