Amazon Caves To Macmillan's eBook Pricing Demands
Sunday, January 31, 2010; 12:52 PM
A new development in the Amazon vs. Macmillan fiasco. Amazon just posted an announcement indicating that it will be "capitulating" to Macmillan by selling the publishers' books for their desired prices.
Macmillan is trying to price their e-books at $15, while Amazon prices e-books at $9.99. Macmillan's CEO John Sargent said that unless Amazon sets the price of new e-books to $15, the publisher will not distribute new books to Amazon when they are released. On Friday, Amazon basically banned titles, both paper and digital, published by Macmillan by refusing to directly sell them. And Macmillan took out an ad in the Publishers Marketplace magazine protesting the tactics being used by Amazon regarding pricing.
Amazon is now giving into Macmillan's demands because of the publisher's monopoly over its titles. In a passive aggressive manner, Amazon says that readers will decide whether it's reasonable to pay $14.99 for e-books. And that other publishers will compete by offering their books and lower prices.
Apple CEO Steve Jobs said last week that publishers were unhappy with Amazon's pricing mode, foreshadowing this disagreement with Macmillan. Jobs revealed that publishers are withholding their titles from Amazon because of Amazon's pricing model. Jobs also said that prices for books on Apple's new tablet device, the iPad, will be the same as Amazon's pricing.
Here is Amazon's announcement:
Dear Customers:Macmillan, one of the "big six" publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. 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 e-books as an alternative.Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!Thank you for being a customer.