Pricing strategies in the e-book market

The Russian Presidential Academy of National Economy and Public Administration

Faculty of Economic and Social Sciences

E-BOOK MARKET

Pricing strategies in the e-book market

Tretyakova Sofya    3rd year student

2012

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Introduction

This term paper is aimed at providing a descriptive analysis of the newly developed e-book market.

Due to the novelty of the market, we consider it necessary to evaluate the main patterns, players, and strategies that have been observed so far, both in the US, where the market is more developed, and in the EU and Russia, where the market is still in an initial phase. In both cases, the main feature which is going to be in the focus of our attention is the pricing arrangement in place between publishers and retailers (wholesale model vs. agency model). Each of these models implies different competition concerns (predation vs. collusion) but a common aspect is that, to be able to deal with these behaviors from the European standpoint, a higher degree of harmonization in countries’ policies is necessary. Indeed, one of the motivations of this study comes from the fact that the  European  Commission  and  several  National Competition Authorities are now carrying out an investigation concerning price fixing on the part of e- books’ publishers after the adoption/undertaking of the agency pricing model.

The term paper is organized as follows: in Part 1, a brief description of the e-book, its development over time, and the supporting devices are provided. Part 2 analyses the main players in the industry -publishers and retailers. Part 3 and 4 deal with the pricing models generally applied in the e-book market -wholesale model and agency model- and the competitive concerns arising from them.

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1. Background information

We begin with a brief look at what an e-book is. Following Gardiner, Eileen and Ronald G. Musto, it is a book-length publication in the digital form, consisting of a text, images, or both, and produced on, published through, and readable on computers or other electronic devices[1]. It must be noted that some books are born digital, i.e. there is no equivalent printed version.

E-books are often read on specialized hardware devices called e-readers or e-book devices. Additionally, personal computers and some mobile phones can also be used to read e- books.

1.1 Development over time

We can now pass on to the history of the e-book market. The origin of e-books can be traced to the beginning of the 70´s, when Michael S. Hart, a student of the University of Illinois, started the Project Gutenberg with the objective of making works of literature available in the electronic format for free. Project Gutenberg grew and became an organization that, nowadays, offers over 36.000[2] free e-books that can be read on many devices.

Due to the limited use of the Internet, and even computers, early e-books were mainly written for specialty areas and a limited audience (i.e. technical manuals for hardware, manufacturing techniques, etc).

The general availability of the Internet in the early 90´s made transferring electronic files, including e-books, much easier. As a result, there emerged and proliferated many e-book formats, some supported by major software companies such as Adobe with its PDF format, and others by independent and open-source programmers. These formats gave rise to the development of multiple devices, most of them specializing in only one format, and thereby fragmenting the e-book market.

How this market has evolved around the world is, by no means, equivalent. In the United States, the success of e-books started mainly in public libraries, which began providing them for free in 1998 through their websites and associated services, though they were not downloadable. Later on, in 2003, libraries began offering free downloadable popular fiction and non-fiction e-books to the public. This trend has continuously grown over time, with 66% of public libraries offering this service in that country.

In Europe, even today “selling e-books can be a challenge”, as was stated by Cristina Mussinelli, a digital publishing consultant at the Italian Publishers Association. Apparently, European consumers have been slower than their American counterparts to adopt e-readers. Though in 2010 Europe experienced a 20% growth in e-commerce book sales, the e-book market share in some continental countries is still only 1%. However, the recently growing adoption of the iPad is expected to foster e-books penetration.  In any case, until recently, they seemed to be mostly popular with early adopters.

A fundamental problem faced when assessing the state of a European-level e-book market is that there is no central entity collecting information which makes it difficult to conduct any comparative analysis.

It should be noted that in the rest of the world, with the noticeable exception of Japan, the scope and penetration of e-books is really limited.[3]

The most fundamental milestones of the e-book market development are presented in table 1 below.

Table 1

1.2 Devices: e-readers

An e-reader is a portable electronic device that is designed primarily for the purpose of reading digital books and periodicals. E-readers differ according to several features. Apart from the formats that the device may support, e-readers vary depending on different attributes such as those related to the screen (type, size, pixels, touch screen, and shades), weight, operating system, and other characteristics associated with the functionality of the device (connectivity, text-to-speech, dictionary integration and/or organization, internal storage, card reader slot, replaceable battery, web browser, library compatibility, USB peripherals and user controls).

Apart from that, there is an essential feature that buyers tend to take into consideration when deciding which device they may acquire and that relates to the number of authors or genres they will be able to read. In other words, the number of titles the e-reader will be able to include. This way, competing e-readers manufacturers (such as Sony, Barnes & Noble, Amazon, etc) try to attract buyers emphasizing the large number of titles in their e-book collection. For instance, Amazon’s Kindle Book store currently boasts over 865,000 e-books available for download, while Sony e-book reader product pages boast over 2 million titles in its reader Store.

Regarding the timeline of  these devices, it is important to point out that appearance of electronic ink (e-ink) may be considered a milestone. Until then, one could find the following devices: Rocket eBook (NuvoMedia, 1996), SoftBook reader (SoftBook Press, 1998), Millennium reader (Librius, 1998), Everybook (1999), LunchBook (1999), Franklin Ebookman (2000) and Cytale (2000). E-ink, which enables reading in bright sunlight and has a low battery consumption, brought about a number of devices incorporating new features such as USB peripherals, card reader slots, touch  screens or WiFi connectivity. Among this group of e-readers one can find iLiad (Philips, 2006), Reader (Sony, 2006), HanLin (JinKe Electronic Company), STAReBOOK (2007), Cybook Gen3 (Booken, 2009), FLEPia (Fujitsu, 2009) and Kindle[4] (Amazon, 2007).

In addition to e-readers, there are several devices that are able to display text on the screen. In this sense, apart from tablet computers, some portable multimedia players and smartphones include a text viewer, which enables the user to turn them into suitable e-book viewers (Cowon D2, Samsung Omnia, etc.). Furthermore, there are certain operating systems that make cell phones useable for reading e-books (e.g. PalmOS based devices and phones). Regarding tablet computers, Apple’s iPad (as well as iPhone and iPod Touch) is increasingly acquiring an e-reader status through a large variety of e-reader applications. However, compared to tablet computers, e-readers are characterized by a better readability of their screens, particularly, in bright sunlight, and a longer battery life, which is achieved by using electronic paper technology to display content. Therefore, any device that is able to display text on the screen can act as an e-book reader, but without the advantages of the e-paper technology.

An important issue to consider now is competition between Amazon and Apple. Amazon is an e-book retailer and an e-reader manufacturer (Kindle) which has a strong presence in the market of digital books. On the other hand, one of Apple’s products is becoming a tough competitor for Kindle though not being an e-reader itself: it is iPad. The main difference between the two is that iPad is a multi-purpose device while Kindle is a dedicated e-reader, aimed at displaying e-books for reading. Prices of both devices differ, with Kindle being cheaper than iPad. As regards the latter, it offers a wide range of applications: movies (including HD), TV, pictures, web browsing, games, among others. Additionally, its screen, which is touchable, is larger than Kindle’s and some of its functions include Bluetooth, WiFi and 3G. With reference to Kindle, it is more focused on reading, more compact, thinner and lighter than iPad, has a life battery of 2 weeks with wireless off and 1 week with wireless on (as opposed to iPad, that offers a battery life of 10 hours), is readable in direct sunlight, and also includes WiFi and 3G.

As for e-books which are the main sources for these devices, it should be said that iPad’s iBooks Store, the website where e-books for iPad can be purchased, is partnered  with Penguin, HarperCollins, Simon & Schuster, MacMillan, and Hachette, some of the most important e-book publishers. With respect to Kindle Store, it has cheaper prices on e-books from non-agency model publishers, whereas the same price as in iPad’s iBooks Store will be found when books belong to publishers on the agency model (see more about models below). In other words, Kindle generally has lower prices (except for agency model books, for which it has the same price as iPad).

In addition, Kindle Store has almost 900,000 titles whilst iBooks has around 200,000.

2. Main players in the e-book market

There are two main players in the e-book market which: publishers (upstream market) and retailers (downstream market). Below comes a description of the major activities carried out by these agents.

2.1. Publishers (wholesale market)

Traditionally, publishers’ main activity used to be the distribution of printed works (books, newspapers, magazines, etc.) as a way of disseminating culture/literature or information. Nevertheless, the Internet and the advent of digital information systems have expanded the scope of their business. Indeed, apart from the distribution of printed stuff, publishers have included in their supply various electronic resources, such as e-books and electronic versions of periodicals as well as micropublishing[5], among others.

Publishing involves different stages which precede distribution of the work. Firstly, there is a development phase which is followed by acquisition, when books, newspapers, magazines and other kinds of works are purchased by the publisher. At the next stage, works are copy-edited and graphically designed. This is followed by work production and printing. And finally, marketing strategies are designed in order to distribute the finished product[6].

2.2. Retailers

Retailers are those in charge of supplying digital books to final consumers. Among them, we can find commercial booksellers and e-book websites intended to sell content for particular devices. On the other hand, retailers are also those who publish free content or archive copies of out-of-copyright works.

Apart  from  supplying  e-books,  some  retailers have established  another  business:  the manufacturing and sale of e-reader devices, which allowed to offer a set of complement products. Originally, some of the retailers that supplied both e-books and an e- readers, sold the former which could be read only at their own device. By this technological tying, Amazon, for instance, used to sell e-books that would be read only at its Kindle e-reader (no other e-reader supported its specific format[7]). Interestingly, this has now changed. Indeed, some retailers/manufacturers have brought out a set of applications which allow to display their e-books on devices that are different from their own ones and which did not previously support the format in question[8]. This is the case of Amazon, which has launched several free applications that enable Apple’s iPod, iPhone and iPad, Android devices, Blackberry and PCs to display the same e-books as Kindle does. Naturally, this allowed Amazon to sell electronic books to a wider range of devices’ users. However, an important point that has to be borne in mind here is that these applications cover devices that do not directly compete with e-readers, that is, devices that are not e- readers themselves. This strategy has been used by some other  e-book and e-reader providers such as Barnes & Noble and Sony[9], who also offer free applications for mobile phones as well as for other intended e-readers (iPad, Android and PCs)[10].

3. Pricing models and competitive concerns

There are two broadly used pricing models in the e-book industry: the wholesale model and the agency model. These differ mainly in who sets the final price (retailer or publisher), and more broadly, the scope that each participant enjoys to decide on strategic marketing               variables               (discounts,               bundling,               etc.).               These differential features have implications in the strategic behavior of the involved agents and, consequently, give rise to different competition concerns.

It must also be stressed that the particular pricing model comes up from direct negotiations between the retailer and the publisher.

3.1. The wholesale model

Traditionally, paper books have been priced under the wholesale model. When e-books emerged, they were initially priced in the same way. It must be noted that this model used to be applied to other digital contents, such as songs. The wholesale model mainly consists in the publisher selling an e-book to a retailer at a Recommended Retail Price (RRP) or list price (of which the author is entitled with a given percentage, say, 25%, as a royalty) minus a discount. The retailer has complete power to decide over the final price for the e-book, as well as over other marketing strategic variables such as bundling, discount policies, etc. Along with a higher degree of control over the product’s sales conditions, this model implies inventory risk for the retailer, though when it comes to digital content, inventory risk is not very relevant.

As mentioned above, the wholesale model implies that a complete control over decisions is in the hands of the retailer. The main competitive concern that arises under this model is that it gives room to use the price of the e-book as a strategic variable to promote the sale of the related device. In this way, by pricing e-books below cost, retailers foster consumption of their e-readers. The problem becomes clear when one takes into account that there exist retailers who do not manufacture e-readers, and hence, cannot afford to follow this strategy as they cannot recoup the losses made by the e- book sales. Eventually, this would lead to marginalization and exclusion of smaller retailers. Furthermore, this could result in a reduction of consumers’ choice since these small retailers are often focused on specific niches, not commonly covered by large booksellers (though elasticity of demand in this segment may be lower).

Moreover, this strategy may have effects on competitors in the e-reader manufacturing sector, specifically on those who also provide e-books (retailers/manufacturers). In this sense, a sort of technological tying is typically practiced because those retailers who supply devices offer only e-books that can be displayed on their own e-readers. Since potential   consumers  take  into  account  this  technological  restriction  when  making purchasing decisions, prices in the aftermarket of e-books become a fundamental factor in order               to determine the               device choice.               Therefore,  if   e-books offered by one retailer/manufacturer are priced below costs, this would affect the market for competing devices, potentially excluding other retailers/manufacturers and limiting consumers’ choice.

3.2.The agency model

On the other hand, under the agency model, retailers become agents, whose main function is to get books from publishers and sell them directly to consumers. Publishers set prices and retailers simply “pass” books to consumers, receiving a commission on sales, and not being allowed to make any sort of discount apart from the previously agreed on with the publisher (typically 5%) and in a given period of time.

As we may well see, the nature of the upstream-downstream relationship (between publisher and retailer) changes completely with the two pricing models.

The agency arrangement is pretty similar to the one that is in place in many European countries for print books (the so called Fix Book Price Agreements or Fix Book Price Laws –  FBPA or FBPL). This, basically, is a Resale Price Maintenance clause, aimed at promoting non-price competition between booksellers in order to foster the sale of little-known books rather than catering only to blockbuster readers. This vertical restriction, by protecting retailers’ margins, provides booksellers with incentives to embark on pre-sale efforts, to carry larger inventories, etc. Under the EU competition law, RPM (Resale Price Maintenance) clauses are considered as hardcore restrictions, nonetheless, agency agreements are a priori excluded.

The agency model basically consists of a Resale Price Maintenance (RPM) clause, which stipulates that a minimum retail price is set by the publisher and the retailer acts as an agent entitled to receive a certain commission (computed as a percentage of the price and typically based on a 30/70 scheme). Consequently, price decisions are completely controlled by publishers.

To clarify how these models work, an example is provided below.

THE WHOLESALE MODEL

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PUBLISHERS

RETAILERS

Publishers sell books to retailers at a RRP less a discount (e.g. $30 and 50%)

Retailer determines the final selling price to consumers

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Retailer buys the e-book from the publisher and pays $15 (of which a given percentage, say,

25%, $3.75, goes to the author as royalties). The retailer may well choose to sell the e-book for less than $15 (i.e. at a loss).

THE AGENCY MODEL

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PUBLISHERS

     RETAILERS

Publishers set the price

Retailers act as agents. They take a 30% commission and pass the remaining 70% to publishers.

The publisher sets the e-book price at $15. Under a 70/30 scheme, the publisher gets $10.50 (the author is credited with $2.625) and the retailer gets $4.50, which is less than what they would earn under the alternative model. However, the retailer would have to sell the e- book for the set price (or at a maximum discount of 5%).

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4. International experience

In conducting the research, it must be borne in mind that it is hard to make a worldwide analysis because there is still no harmonization of policies related to the book industry, neither print nor digital. In some countries, the aforementioned Fixed Book Price Agreements or Laws are in place, so that the introduction of the agency model does not mean a completely different approach. Nevertheless, these agreements/laws cover both printed and electronic books only in some countries (Spain and recently France), while in others the latter are not explicitly included (Portugal). Therefore, the agency model would make a difference in those countries where e-books fall outside the agreements/laws.

4.1 The United States e-book market

Though e-books and e-readers were in use back at the very beginning of the 2000s (iLiad, 2006; Sony Reader PRS-500, 2006), this market really took off in the U.S. in 2009. The main player in the market was Amazon, which already had developed its Kindle, set prices under the wholesale model. Most retail prices were set equal to $9.99, regardless of the novelty or genre of the e-book. As publishers noted in many occasions, this strategy implied losses for Amazon in many titles. A justification of this tactic carried out by Amazon is the fact that being aggressive in the e-book market would enhance the demand of Kindles. This can be seen as part of a more comprehensive business strategy, which Amazon intended to use to build a strong position in the growing market. In this sense, it is worth mentioning that during 2009 Amazon developed several free applications that allowed other devices (not e-readers themselves) to display the titles, which formerly could only be read on Kindles.

It must also be noted that discomfort among publishers was arising because valuation and willingness to pay for e- books on the part of consumers was being damaged. This is particularly dangerous when a product is being established in the market since it would probably set “precedents” of a low cost/value good.

This scenario completely changed when Apple started setting the terms for e-books for its forthcoming iPad (the closest non-e-reader competitor of Kindle) in early 2010. From the very beginning, Apple negotiated  with  the main publishers in U.S. a wholly different pricing model to supply e-books to iPad users through the iBookstore, the agency model. Macmillan was the first publisher with whom Apple reached an agreement, which led to some kind of retaliation on the part of Amazon, which temporally removed the “buy” buttons for Macmillan’s titles from its website. However, major publishers agreed with Apple into the agency model (the Agency Five: Macmillan, Simon & Schuster, HarperCollins, Penguin, and Hachette; later on,  in March 2011, Random House also switched to the agency model) and pressured Amazon into undertaking the same arrangement, which was effected in February 2010. It needs to be stressed here that this contract model, which implied prices of $12.99 to $14.99 for most fiction and non-fiction titles (including best-sellers), yielded lower revenues for publishers, who received a 70% of the final price. This “sacrifice” was supposedly accepted by publishers to prevent Amazon from gaining a stronger position and more bargaining power and to preserve e-book value.

Furthermore, this agreement extended to commercial relationships between the main publishers and retailers. It resulted in a great similarity in prices for different titles, thereby raising competitive concerns.

In fact, five of the six publishers involved held around 60% of the overall sales in the market in 2009 according to different sources.

4.2 European Union e-book market

In Europe, the adoption of the agency model took place at quite an early stage of the European e-book market development. And was simultaneous with the introduction of iPad and its associated agency model.

In early 2011, this model gave rise to competitive concerns in the Office of Fair Trading, which started an investigation working closely with the EC. The concern was related to the suspicion that e-books prices were fixed by publishers, given that they were twice as expensive as their printed version. This fact triggered a European wide investigation in which the EC is still working with national competition  authorities. However, which publishers are raided  is unknown.  The involvement of the EC does not necessarily mean that a pan-European cartel is being suspected (among publishers present in several countries), but the fact that e-books are sold across borders.

In this sense, parallelism with the case of U.S. is not straightforward. There are several elements that differentiate the European e-book market, making the analysis more difficult.

As regards intra-brand competition, it must be noted that, as it was mentioned before, there are countries in which prices of books are allowed to be fixed by law (e.g. France and Spain), which means that price fixing, and thus the agency model, is legal. Of course, this does not imply that coordinating on prices among publishers is permitted but it is just simpler to reach. On the other hand, in some countries in which such laws are not in place, the agency model is also present (e.g. UK).

This limited, or null, downstream competition enhances the likelihood of a collusive agreement among publishers.

With respect to upstream competition, a common practice among publishers is the establishment of platforms through which an individual publisher, or even a group, sells books directly to final  consumers or retailers. This, together with the existence of associations of publishers, increases transparency and observability in the market, leading to fast detection of deviations from the agreement and to a timely punishment.

On the overall, it seems highly plausible for publishers to reach collusive agreements on prices of e-books.

4.3 Comparison of the US and EU e-book markets

As we can see from the subchapters above, the United States and the European Union e-book markets are different in nature and activities. Below there comes a comparative analysis of the two markets.

According to statistics, e-books currently make between 15 and 20 percent of the overall book sales in the United States. It is obviously a dramatic and quick rise since 2010. In the rest of the world, however, the situation is entirely different. In the UK, e-books account for about six percent of sales which makes the UK second in the list after the US.  In Germany, Spain, France, and Sweden, e-books make only 1 percent of total book sales. Apparently, we can characterize European e-book markets as still nascent.

The new report from O’Reilly Media, “The Global eBook Market: Current Conditions & Future Projections” and discussions at the Frankfurt Book Fair suggest that foreign countries won’t necessarily follow an identical but delayed path to the widespread e-book adoption.

The fact that the e-book business has been slow to develop in Europe and other international markets has important ramifications for publishers there. In the U.S., the quick growth of e-book sales has been something of a lifeline for publishers facing a declining print book business. E-books have allowed publishers to reach new readers, and studies show that owners of e-readers buy and read more books overall. The absence of a vibrant e-book business in most foreign countries is depriving publishers there of the same advantages.

In Europe, Amazon, the most famous retailer of e-books, will clearly be the key to helping e-book markets to develop. Its Kindle has recently entered into Europe and been welcomed by many publishers and readers who are looking for easy ways to sell and buy e-books. Yet, some European publishers are wary about Amazon’s deep impact on shaping e-book emergence there. Their main fear is that Amazon might bypass or override traditional practices like price regulation.

In terms of a timeline for growth in Europe, big European publishers believe that it will take at least three years before e-books are close to 10 percent of sales there. It may take even longer in other parts of the world and the reasons for that are as follows:

       Relatively few affordable e-readers

Affordable e-readers are one of the main drivers of e-book growth, and until recently they’ve been virtually non-existent in much of Europe. It was only in 2011 that Amazon finally brought the Kindle to Germany and France. At the same time, Spain and Italy aren’t expected to get the device until at least the end of 2012.

       Not enough e-books

Lack of e-book titles is also keeping the digital book business from growing faster in Europe. Publishers in many markets have only recently begun releasing new local-language e-books simultaneously with print books. Moreover, they are still in the very early stages of digitizing their backlists. Simultaneously, there is also a dearth of foreign-language titles in digital form. Geographic restrictions limit where e-books from other countries can be sold, and what is also important is that the copyright law for e-books complicates relationships between authors, agents, publishers and distributors.

       E-books are expensive

E-books cost more in foreign countries than in the U.S., even without taking the VAT into account.[11] The recent research by Italy’s Bookrepublic and AT Kearney found that the average price for a newly published e-book across the world is currently €10.50, ($14.5/£9.19), not including taxes, whereas the average price in the UK is €10.80, ($14.91/£9.45) and the average in the U.S. is €9.30. ($12.84/£8.14).

       VAT

Most countries in the European Union and Scandinavia have a value-added tax (VAT) on print books and e-books, with the tax being much higher on e-books than on print books. The main reason for this is that under the definition of the European Commission, books are considered products, while e-books are considered licensed services. The VAT on e-books in Italy, for example, is 25 percent, compared to 4 percent for print books there. This undoubtedly contributes to higher e-book prices.

The above-said allows us to conclude that the e-book adoption is not going to follow the same path in every country. It is determined by numerous parties, including governments, publishers, producers and, certainly, readers.

4.4 Russian e-book market

Though the major focus of our research has been on the United States and European Union, we feel it necessary to take at least a brief look at the state of things in the Russian e-book market.

As the number of available e-book titles continues to increase and prices fall, Russians are exhibiting an increasing affinity for reading on screens. However, market players caution that it will be a long time before e-books replace printed titles.

Moscow Times reported, that the “size of the Russian e-book market is currently $2.2 million, with e-books accounting for less than 1% of total book sales.”

The Russian e-book market is dominated by two players: LitRes, the biggest copyright holder on Russian-language books, which controls 54 percent of the market, and Imobilco with 20 percent. E-book prices on LitRes, for example, range from 10 rubles (33 cents) for Tolstoy’s novel «Childhood» to 250 rubles ($8.50) for the Russian translation of Walter Isaacson’s «Steve Jobs». RBK Research estimates that in the best-case scenario, e-books’ share of the Russian book market could hit 30% by 2015.

Mikhail Osin, director of the digital sales department for Ozon.ru–which has been called “Russia’s Amazon”–said, “Sales of e-books are rising at a fast rate, and this trend will continue in the future. New technologies are occupying a segment of the market, which of course is a concern to publishers, making them adapt their business model and even switch to the production of electronic books.” Ozon.ru had a 40% increase in e-book sales in 2011, with e-reader purchases rising 250%.

As for e-reading devices, their prices have dropped about 30% over the past two years. Yevgeny Militsa, director of e-reader retailer PocketBook Russia–whose e-readers range in price from 3,400 rubles ($115) to 15,000 rubles ($507)–said his company sold approximately 400,000 devices in 2011, which doubled 2010 sales. He expects the market to grow another 50% in 2012.

And yet, as Alexander Bobrowski of LitRes observed: “For many Russians, the value of a book still lies in its tangibility. For this reason paper still prevails.”[12]

Conclusion

On the basis of the work carried out we have come to the following conclusion.

The development of the e-book market needs to be cautiously monitored. International experience, particularly in the US, has shown that both pricing models give room to different strategic anti-competitive behaviors and hence, competition concerns. Specifically, the wholesale model is widely used to predate in the e-book retail market, cross-subsidizing the losses with the sales of e-readers (which could be done owing to the existence of a technological tying). As regards the agency model, the main competitive concern here is that it facilitates collusive agreements among publishers.

These issues are even more complicated in the EU since countries have different policies regarding pricing and taxing books in general and e-books in particular. A higher degree of harmonization is necessary in order to prevent potential arbitrage and to promote market integration.

It also needs to be stressed that this is a new market and available information is still scarce enough.

References

       Adams, D.; The Agency Model. Not a bad idea, only illegal (in Australia) in The Digital Reader - 03/04/11 (http://www.the-digital-reader.com/2012/02/01/the-agency-model-not-a- bad-idea-only-illegal-in-australia/)

       The Global eBook Market: Current Conditions & Future Projections; By Rüdiger Wischenbart, additional research by Sabine Kaldonek

       Allen, K.L.; The Agency Model Redux: An Analysis After Six Months in the Diesel eBook

       Store Blog - 12/02/10 (http://blog.diesel-ebooks.com/?p=704)

    Angier, M.; Top Ten Reasons Why eBooks Are Better than Printed Books in Power Home

       http://www.powerhomebiz.com/vol127/ebooks.htm

       Basten, A.; More raids in price-fixing probe. Publishers “explain” high ebook pricing in TeleRead – 03/04/12 (http://www.teleread.com/paul-biba/more-raids-in-price-fixing-probe- publishers-explain-high-ebook-pricing/)

       Bradbeer, M.; Why the agency model is flawed in FutureBook - 09/21/11 (http://www.futurebook.net/content/why-agency-model-flawed)

       Jones, P. and Casassus, B.; European publishers offices raided by EC inspectors in The Bookseller.com –(http://www.thebookseller.com/news/european-publishers- offices-raided-ec-inspectors.html)

       Jones, P.; Ten things about the agency model in the UK in FutureBook - (http://www.futurebook.net/content/ten-things-about-agency-model-uk)

       www.wikipedia.org

       Kindle claims 45% of eReader market, Sony claims 30% in the Best Tablet Review -

       09/01/09 (http://besttabletreview.com/kindle-claims-45-percent-of-ereader-market-sony- claims-30-percent/)

       Kindle vs. iPad Review in the iReader Review -01/27/10 (http://ireaderreview.com/2010/01/27/kindle-vs-ipad-review/)

       Koleva, G.; Apple, Amazon targets of eBook price fixing probe in Wallet Pop – 08/04/2010 (http://www.walletpop.com/2010/08/04/apple-amazon-targets-of-ebook-price-fixing-probe)

       Kunhardt, J.; eBook Pricing Deals May Violate Antitrust Laws; CT Attorney General Launches Investigation in HuffPost – Books – 03/08/10 (http://www.huffingtonpost.com/2010/08/03/ebook-pricing-deals-may-v_n_667919.html)

       LeCharles Gonzalez, G.; eBook Market Needs Transparency, and Fast in the Digital Book World - 06/09/10 (http://www.digitalbookworld.com/2010/ebook-market-needs- transparency-and-fast/)

       Lowe, S.; The Advantage of an Ebook Agency Model in Publishing Bits - 06/03/10

       (http://publishingbits.com/ebook-strategy/30-advantage-of-an-ebook-agency-model.html)

       www.fep-fee.be

       www.publishers.org

Appendix

A.1: Main e-readers