It Gets Comical
February 8th, 2010Space Shuttle Blasts Off
February 8th, 2010It’s a Little Late, Fellas
February 8th, 2010Rejoice
February 8th, 2010It Was All a Lie
February 8th, 2010And Let’s Not Forget The Enablers
February 7th, 2010Shuttle Endeavour STS-130 Makes Orbit
February 7th, 2010India’s Chandrayaan-II Mission in Planning for 2013 Launch to Moon as Others Offer Help
February 7th, 2010Richard Garriott: Man on a Mission
February 7th, 2010Sick Of Winter
February 7th, 2010Agency model = Revenue share
February 7th, 2010Apple, as the company has in the past, has begun to upset, er, apple carts. With the announcement of the iPad, Apple also announced a book section in the iTunes Store, with a business model that is exactly the same as the hugely successful music model they use. For both books and music, Apple will collect 30% of the sales price of the item, and the publisher/seller collects 70%. The seller of the item sets the actual price. This is called the "agency model."
Whose apple cart is upset? Well, it is Amazon, who has insisted on setting prices for publishers that sell books for the Amazon Kindle. This has irritated publishers, who think that popular and fast selling items ought to be priced differently, and conversely, slow moving items should be able to be reduced in price. It is a simple, time tested model that helps keep supply and demand in balance.
Amazon got away with it for a while because they had the only popular ebook reader. But now that Apple has announced the iPad, publishers are likely to abandon the inflexible Amazon. Look for the Kindle to appear in supermarkets in a few months, mixed in with those remainder books for $4.99.
What does this have to do with community and municipal broadband? Well-designed open access, open services networks let providers set prices, and simply take a revenue share that helps pay for network operational costs. This approach encourages innovation and competition among providers. Insisting on fixed prices (the Amazon model) drives service and content providers away.