Amazon loses first round in fight to control e-book pricing

1 February 2010

There was a bit of a spat in the publishing world at the weekend, as well as the careful employment of smoke and mirrors. It all had to with Amazon getting the huff with Macmillan - one of the biggest book publishers in the world. When you've built your business on book retail and your future rests heavily on digital e-books and e-book readers, upsetting such a company isn't great for business, but Amazon gave it a crack anyway.

At the end of last week, Amazon withdrew all of Macmillan's books from the site after the publisher pushed to increase the price of the Kindle versions of its titles; Amazon was adamant the price (in the US store, at least) should remain below $10 wherever possible, painting itself as the customer champion. Talks reached deadlock when Macmillan refused to give in, and the titles promptly vanished from the main store.

Bitterwallet - Amazon vs Macmillan

48 hours later, and Amazon capitulated to Macmillan's demands, with a statement from the Amazon Kindle team reading:

"Amazon customers will decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling ebook. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced ebooks as an alternative."

The problem for Amazon is that before last week, they may have had the upper hand, but then Macmillan was revealed as one of the major publishers to strike a deal with Apple to sell titles through the new iBooks store, which will allow the publisher - rather than Apple - to dictate the price of their books. There's far more to it than this; it all gets quite unweldy and complex, but author Charles Stross delves into some of the key issues Amazon are struggling with - namely their attempt to be both wholesaler and retailer, and control the market at all entry points.

TOPICS:   Gadgets   Technology

5 comments

  • brian b.
    yawn use a note book simples, and it does more
  • Mark P.
    Macmillan will find that whatever deal they have in place with Apple, not many people will buy an e-book for $15 (corporate exchange rate=£15 + VAT). The publishers have a golden opportunity to beat pirates in the bud by pricing competitively against physical books. £5 books on a kindle? Yes £15 books on a kindle? No I hope the pirates don't win this one.
  • stu
    problem is Mark P that for a publisher that makes no sense. They dont want an Ebook market to exist at all if its at £5 abook. They realise that they currently make the most money selling new release hardbacks at £20 rrp They would rather the fans and book readers buy at £20 and have piles of people pirate than sell 3 times as many books at £5 and no one pirate..
  • Maude
    I'm with Amazon. eBooks should cost consumers a fraction of the cost of a physical book. There are no printing costs, no distribution of heavy dead trees. And they will only end up selling more copies if they are priced aggressively. It's a win-win for everybody.
  • Google B.
    [...] all about bloody e-books at the moment, innit? The weekend saw heavyweight publishers Macmillan lay seven bells out of Amazon in a spat that will have ramifications for the future pricing of e-books. Now it’s Google [...]

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