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tl;dr : retailer's cut under agency model - platform provider's cut of in-app purchases = 0

The author attributes the agency model to Apple, which I think is understating the role of the publishers, who would have rejected it if it hadn't been very much in their own interests. Expecting the publishers to keep giving you outsized discounts[1] for no reason but inertia was a mistake. Even Amazon couldn't keep that gravy train rolling. The market was begging for a shaking and Apple shook.

[1]:Does this sound stable? "There is no comparison between the retailers’ costs and risks associated with physical books and those associated with ebooks. There is no economic justification to providing the same level of discounts. But that’s where we are." That's from April 2009. -- http://www.idealog.com/blog/ideas-triggered-by-amazon-buying...




>>>The author attributes the agency model to Apple

This is because it was Apple that devised the Agency Model and was the first to propose it to the Big Six publishers as a way of getting them on iOS. This led to Macmillan battling with Amazon one infamous weekend and had Amazon retaliate by removing all Buy buttons from Macmillan books. Amazon soon capitualted, other publishers -- except for Random -- piled on, moving to the Agency Model. When Random finally joined, all their books went up anywhere from $2 to over $7 in price.

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This is because it was Apple that devised the Agency Model and was the first to propose it to the Big Six publishers as a way of getting them on iOS.

"....which I think is understating the role of the publishers, who would have rejected it if it hadn't been very much in their own interests."

Apple just gave them a better deal than the one Amazon was willing to fight dirty to maintain.

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