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Steve Jobs has made a deal with Rupert Murdoch, which may end the days of cheap e-books from Amazon.  (Source: Reuters)
Enjoy $9.99 bestsellers while you can, following the Macmillan concession, everyone wants more out of Amazon

As we predicted, the recent concession by Amazon.com in terms of electronic book pricing to “big six” publisher Macmillan opened the floodgates leading other top publishers to demand more.  

Amazon.com's electronics books have many downsides -- the potential to lose your book eventually due to compatibility, ownership concerns, and dependency on battery life of the device being used.  They also have significant upsides -- a lot of classic works are available for free, you can transport 1,000s of books in a single bag and it's much easier to locate your books.  However, the biggest advantage of all was pricing.  Whereas hardcover best sellers typically retail for $15 to $25 on Amazon.com, best-sellers have been available in e-book form for the bargain rate of $9.99.

Macmillan recently won in a battle with Amazon to raise those prices.  Amazon has agreed to raise the price of Macmillan 
New York Times bestsellers to $12.99, or in most cases, $14.99.  

Now Rupert Murdoch, the media mogul who owns HarperCollins books -- another big six publisher -- is demanding a price bump of his own.  In a conference call Tuesday, he complained, "We don't like the Amazon model of selling everything at $9.99.  They pay us the wholesale price of $14 or whatever we charge.  But I think it really devalues books and it hurts all the retailers of the hard cover books."

Murdoch commented that he was looking to renegotiate News Corp's deal with Amazon and says that Amazon has responded that it is "ready to sit down with us again."

HarperCollins Books publishes such bestselling authors as Michael Crichton and Janet Evanovich.

Besides the Macmillan concession, another factor driving up prices is new competition from Apple.  Apple recently debuted its iPad tablet computer.  While its name has been the bunt of many jokes, curiosity about the new device is high.  Apple looks to use the device to become a major competitor to Amazon and second-place Sony in the electronic books arena.  

Apple already has a deal in place with Murdoch.  He comments, "Apple, in its agreement with us, which is not been disclosed in detail, does allow for a variety of slightly higher prices."

It appears that the final blows are being struck that will ultimately spell the end of cheap e-books.  Will that hurt the format's popularity?  Or will customers stomach the changes?  That remains to be seen in coming months.



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By DEredita on 2/3/2010 11:44:41 AM , Rating: 2
I liked Amazon's model. It worked, and the prices made a good argument for buying the eBook version. This saved trees/paper, the e-ink it uses is very easy on the eyes, the Kindle was pricey but not scary expensive, plus you could read it on the subway in NYC without worrying too much about being mugged for it.

Then Apple steps in with the biggest technology joke of the decade. Money hungry CEOs from publishing companies, who missed out on the wave of profits from the iPod/iPhone, flock to Steve Jobs thinking they can make tons of money. The books are now going to be close to the price of the printed editions, you have to read it on an LCD screen (eye strain), the entry level iPad is more than double the price of Amazon's Kindle, and you'll likely be mugged at knife point within 5 minutes of pulling it out on the subway in NYC.

What sucks is that folks who generally read a lot of books would likely not consider the iPad, and stick to their Kindle. But, they are getting screwed on the deal because now many of the publishers see dollar signs now that Apple stepped into the market, and they want to get as much money as they can.

Unless Amazon significantly drops the price of the Kindle, I would say that growth in the eBook arena will slow down significantly. Why would I pay $16 for a book to read on a device I can't pull out everywhere, when for $25, I can buy the physical book and read it anywhere?




By wwwcd on 2/3/2010 12:52:49 PM , Rating: 2
It is time to revive the Pirate Bay!;)


By Oregonian2 on 2/3/2010 2:29:29 PM , Rating: 2
What's funny is that Amazon's model is the same model that Apple uses for songs on iTunes using a single low price.


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