Amazon.co.uk has finally broken its silence on the transition to the agency model in the UK adopting a similar strategy to that seen in the US earlier this year. Quietly agree to the new terms while publicly spinning against them.

In an email sent to customers, and posted on its Kindle forum, it states: "We believe [the publishers] will raise prices on e-books for consumers almost across the board. For a number of reasons, we think this is a damaging approach for readers, authors, booksellers and publishers alike." Revealingly, it adds: "In the UK, we will continue to fight against higher prices for e-books, and have been urging publishers considering agency not to needlessly impose price increases on consumers."

Amazon says that in the US the growth in "unit sales" of Kindle Books from the agency publishers has slowed to half the rate seen by other publishers. Amazon says in the US sales of Kindle Editions have trebled in the first nine months of the year.

Interestingly, it neglects to mention that sales of those Kindle books may have slowed on Amazon because consumers are buying them via Apple instead; or what role Amazon plays in promoting non-agency titles to the detriment of other titles. It also has nothing to say about the value of those sales. Perhaps the rate of growth has slowed, but perhaps the value of those sales is greater than it would have been anyway: and with two ebooksellers in the marketplace not just one, perhaps those publishers will think: job done.

What's really interesting here is the timing of this email, and the fact that Amazon.co.uk has taken this approach at all. It implies that agency D-day is fast approaching, and that Amazon will need to accept the new terms sooner rather than later, and that other publishers are likely to follow Hachette's lead. This is good news for those booksellers who currently have Hachette's e-books on a stop, though they will be infuriated that Amazon has once again been allowed to play the consumer champion.

It will be interesting to see how publishers respond. So far Hachette has issued one terse short statement aimed squarely at the trade press, and not its end customers. It may need to up its game, and as Tim Hely Hutchinson has done before go direct to the public with its counter arguments.

Privately some publishers have implied to me that the battle has been won, and they may be right. But by placing the argument in a public space Amazon has changed the rules. If you don't agree just look at some of the consumer comments on the Kindle forum.

Amazon's email to customers

Dear Customers,

Recently, you may have heard that a small group of UK publishers will require booksellers to adopt an "agency model" for selling e-books. Under this model, publishers set the consumer price for each e-book and require any bookseller to sell at that price. This is unlike the traditional wholesale model that's been in place for decades, where booksellers set consumer prices.

It is indeed correct that this group of publishers will require Amazon and other UK booksellers to accept an agency model for e-books. We believe they will raise prices on e-books for consumers almost across the board. For a number of reasons, we think this is a damaging approach for readers, authors, booksellers and publishers alike.

In the US, a few large publishers have already forced such a model on all US booksellers and readers. You can read the thread we posted about that change here:
http://www.amazon.com/tag/kindle/forum?cdForum=Fx1D7SY3BVSESG&cdThread=T...

As we're now faced with a similar situation in the UK, we wanted to share our thinking and some details about what we have observed from our experience in the US.

First, as we feared, the US agency publishers (Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster) raised digital book prices almost across the board. These price increases were not only on new books, but on older, "backlist" books as well (in the industry, "backlist" books are often defined as books that have been published more than a year ago). Based on our experience as a bookseller setting consumer prices for many years, we know that these increases have not only frustrated readers, but have caused booksellers, publishers and authors alike to lose sales.

There is some good news to report. Publishing is not a monolithic industry - there are many publishers of all sizes taking a wide range of approaches to e-books. And most publishers in the US have continued to sell e-books to us and other booksellers under traditional wholesale terms. They make up the vast majority of our Kindle bookstore - as a simple proxy, in our US store 79 of 107 New York Times bestsellers are priced at $9.99 (£6.31 GBP) or less, and across the whole US store over 585,000 of 718,000 US titles are priced at $9.99 or less.

Unsurprisingly, when prices went up on agency-priced books, sales immediately shifted away from agency publishers and towards the rest of our store. In fact, since agency prices went into effect on some e-books in the US, unit sales of books priced under the agency model have slowed to nearly half the rate of growth of the rest of Kindle book sales. This is a significant difference, as the growth of the total Kindle business has been substantial - up to the end of September, we've sold more than three times as many Kindle books in 2010 as we did up to the end of September in 2009. And in the US, Kindle editions now outsell hardcover editions, even while our hardcover business is growing.

In the UK, we will continue to fight against higher prices for e-books, and have been urging publishers considering agency not to needlessly impose price increases on consumers. In any case, we expect UK customers to enjoy low prices on the vast majority of titles we sell, and if faced with a small group of higher-priced agency titles, they will then decide for themselves how much they are willing to pay for e-books, and vote with their purchases.

Thank you for being a customer,
The Kindle UK Team