backtop


Print 73 comment(s) - last by Ryanman.. on Feb 3 at 4:34 PM


Amazon has given in to publisher Macmillan in a pricing dispute, agreeing to raise its e-book prices 30 to 50 percent on bestsellers. Price increases on standard titles and on works from other publishers are expected to follow in the near future.  (Source: Amazon)
Amazon isn't happy but it says it has to play ball with Macmillan Books, adopting up to 50 percent price increases

Amazon, originally an online bookstore, has thrived off of the ever-expanding retail offerings its core business unit provides.  However, the company has also enjoyed significant success as an electronics company, producing the best-selling Kindle series of e-Book readers (manufactured by Foxconn).  The Kindle series currently owns over 60 percent of this emerging market.

However, all is not well for Amazon's e-Books division.  Traditionally, bestsellers have retailed for about $10 in electronic form, with the early chapters being provided as free samples.  Recently, however, pulled Macmillan from its store over a pricing dispute.

Amazon wanted to stick with its lower prices.  However, Macmillan wanted up to a 50 percent increase on prices of its bestsellers.  Writes Macmillan CEO John Sargent, "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."

He talked about the decision to pull the books late last month, writing, "I regret that we have reached this impasse. Amazon has been a valuable customer for a long time, and it is my great hope that they will continue to be in the very near future. They have been a great innovator in our industry, and I suspect they will continue to be for decades to come."

Now Amazon has given in to the publisher's demands, but not without doing a lot of complaining first.  Writes the Kindle team in their forums:

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.

Now that Amazon has bowed to Macmillan's wishes, though, it will be hard pressed to block other publishers from demanding similar increases.  Ultimately, this will likely have a trickle-down effect, raising e-book prices as a whole around 30 to 50 percent.

That's bad news for this nascent market.  While e-books have significant appeal -- in terms of portability (you can bring thousands in your book bag) -- there's still many downsides as well.  With electronic books, you're at the mercy of your current formats and devices -- once they become obsolete, there's the chance you may lose your book forever.  And many people enjoy the look and feel of an old fashioned book.

Through competitive pricing, Amazon and other e-book vendors were able to help customers overlook the downsides and embrace e-books.  With that pricing advantage vanishing, it should be interesting to see if the industry's growth slows.  Amazon's CEO has boldly predicted (several times) that e-books will soon surpass sales of print books -- however that is under current pricing.  Will e-books that are 30 to 50 percent more expensive be able to take control of the market in the same way?



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: On the topic of suckers...
By Motoman on 2/2/2010 10:53:48 AM , Rating: 2
Renting != owning in any case. When you rent something, you never had any ownership rights in the first place.

Libraries are fine - the books are owned by the community, and it costs the consumer nothing (outside of taxes you have to pay anyway) to have access to those books.

Neither of those are pertinent to this discussion.


RE: On the topic of suckers...
By Oregonian2 on 2/2/2010 12:41:47 PM , Rating: 2
Yes it does. One pays for access to materials and you demand total unrestricted ownership of the copy. I pay for library books, I pay Netflix for copyrighted materials. Both give me, as you point out, zero ownership which is what you gave me a bad time about above.

They are VERY pertinent to the acceptability of paying for a copy of material and not getting as much ownership as you demand.


RE: On the topic of suckers...
By Motoman on 2/2/2010 1:11:23 PM , Rating: 2
If Amazon positioned the e-book thing as renting an e-book, rather than buying an e-book, I'd be fine with it.

Hell, if they called it "licensing access to" an e-book, I'd be fine with that.

Purchasing something implies that you own it.


RE: On the topic of suckers...
By Oregonian2 on 2/2/2010 8:12:11 PM , Rating: 2
We're more arguing what "owning" means. Even in your example of paper-made books, one does not TOTALLY own it (which you seem to imply one does) because one isn't allowed to copy it. Content access is being licensed to the owner of the paper book. Difference with eBooks has to do the the way that license is transferable and/or copyable (Amazon allows six Kindles to simultaneously have a one-time purchased eBook).


"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki