Here it is, one week after Amazon yanked the buy buttons from Macmillan print and e-book titles. So what’s new?

First, Macmillan took out a full-page NYT ad for one of its new hardcover releases…and let the reading public know that the book is available everywhere except Amazon: Macmillan NYT Ad: “Available at booksellers everywhere except Amazon”. For the record, I think this is utterly brilliant. I am now crushing on the Macmillan marketing folks who dreamed this up.

Second, Hachette Book Group USA is following in Macmillan’s footsteps regarding e-book pricing: Hachette Book Group to Transition to Agency Model. In this article, there is a link to Macmillan CEO John Sargent’s definition of an agency model:

“Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.”

Everyone clear on this? In the agency model, instead of most e-books getting capped at $9.99, the price would have a range over time, from a high of $14.99 to a low of $5.99. When the new content is first available, it will cost more — same as in pretty much any retail store for a new product. E-books would also be released around the same day as their hardcover print counterparts, instead of waiting days, weeks, months after the hardcover releases before releasing the e-book version.

Now, many folks have been commenting about the pricing structure, as well as the situation overall. I’ve previously referred you to folks like John Scalzi and Tobias Buckell and Jay Lake. I’ve commented too. What I initially said, when Amazon first pulled the plug one week ago, was: “Now, I don’t like that Macmillan is demanding that Amazon raise its ebook prices. I think it’s ridiculous for an ebook to cost the same as a print-version trade paperback.”

But now I’ve had time to look at the so-called agency model of pricing…and I think it makes sense. Why? Well, I’ll answer a question with a question: Why is it OK for Amazon to charge almost $500 for the Kindle initially and drop the price over time to under $300, but it’s not OK for Macmillan to charge almost $15 for books initially and drop the price over time to under $6?

Really — why? Please explain it to me.

Yes, of course I’ve heard the arguments that e-books don’t have paper/distribution costs and therefore should not cost the same as their print versions. And I agree: if you’re paying $24 for a hardcover, part of what you’re paying for is the actual hard-backed cover…and you don’t get that on an e-book version. As far as I know, no one is suggesting that an e-book should be the same price as a hardcover copy, or even the same price as a mass-market paperback. What Macmillan and Hachette and HarperCollins are saying is that the $9.99 “loss leader” Kindle model is not tenable — either for the publishers or for Amazon. (Indeed, Amazon stands to make more money from the agency model; right now, it loses money on e-book sales, which it makes up for in Kindle sales.)

Why doesn’t the $9.99 e-book model work for publishers? Author Susan Piver has a phenomenal article that everyone should read: The Macmillan vs. Amazon Throwdown. For another look at the $9.99, check out Amazon losing money on $9.99 e-books. And look:

Even though e-books do not have the printing and shipping costs associated with a book, publishers insist that these are only a fraction of the cost that goes into a book: “The pricing in publishing has very little to do with manufacturing costs and most to do with the cost of author talent. That does not go away when you sell an e-book,” the head of one house asserted.

Oh, right. Gotta pay the **authors.** (To say nothing of the editors who work with the authors.) When you buy an e-book, you’re not buying the format. You’re buying the **content.** I don’t know about you, but I have a handful of authors who are on my Gotta Buy It Now list. And yeah, I pony up the money for hardcovers for those authors, because I am a huge fan of their work and **I don’t want to wait the better part of a year for the mass-market paperback reissue.** I pay more, and I get the book sooner. Why shouldn’t the same rule apply to e-books?

So what if we don’t move to an agency model? If I understand this correctly, the other option is called “windowing,” and we saw a prominent example of this late last year, with the release of Stephen King’s Under the Dome. Basically, in the windowing model (again, if I’m understanding this correctly), the e-book versions, priced significantly cheaper than their print versions, would not be available until weeks, maybe even months, after the print versions have hit the shelves.

You know. Sort of like how a hardcover comes out first, and then you have to wait months, maybe even years, for an alternate format. Hey, I had that with my Hell books from Kensington: 17 months to two years after the trade paperback version of the books, the mass-market editions became available. So it would be the same thing for the e-book versions. In the windowing model, e-books are the mass-market paperbacks of the digital age.

Frankly, I think the agency model is better than the windowing model, by a long shot. With the agency model, you get the ebooks available around when the print versions first release. And at the end of the day, it’s all about readers getting to read the stories they want when they want…and how they want.

As for poor Amazon, the tiny e-tailer who’s in the middle of all this? According to Macmillan’s Sargent:

“The agency model would allow Amazon to make more money selling our books, not less.”

Ah. Yup, okay, I see why Amazon is upset.

Wait, no I don’t.

Oh, wait, yes I do! This isn’t about the content at all. It’s not about the authors, or the readers. It’s about Amazon sweating over the Kindle not being the only e-kid on the block. B&N’s got its Nook. Sony has its e-Reader. And gamechanger Apple will have its iPad. So Amazon, with its monopoly on its Kindles, suddenly won’t be making a killing on its e-reader hardware. Oh noes! What’s Amazon to do? I’ve got it! Amazon should make a big, fat stink about the publishers demanding that Amazon raise its e-book prices! Consumers won’t stand for that, no sir! Consumers will demand that their e-books are no more than $9.99! And if other e-tailers (like Apple) are going with the agency model, then Amazon will still make a boatload of money from its Kindle, all thanks to consumer outrage! It’s a brilliant plan!

And it also won’t work. Want to know why? Amazon overstepped. If it had dismantled the buy buttons only on Macmillan e-books, this would probably be a very different conversation. But it didn’t. It dismantled buy buttons on BOTH e-book and print formats for Macmillan books. Which, by the way, are STILL not back up, one week later.

After all is said and done, Amazon looks either like a bully or a tantruming toddler, and its **still** going to profit once all the publishers switch over to the agency model. So don’t you worry about poor Amazon. It’s going to be fine. (Amazon could stop selling books completely, and it would be fine.)

So enough with the drama already. Amazon, put back the buy buttons.