Amazon Battles Macmillan on eBook Prices
The fight for supremacy on the eBook frontier has gotten ugly. Last week, book-selling giant Amazon battled with Macmillan, one of the largest publishers in the U.S., over eBook prices. The New York Times reports that Macmillan CEO John Sargent flew to Seattle on Thursday to meet with Amazon execs and push to move to a pricing model where the publisher would set consumer prices for eBooks, with new releases ranging from $12.99 to $14.99, and Amazon taking a 30% sales commission. These terms are similar to the agreement Macmillan now has with Apple, to sell its titles on the new iBooks app for the iPad. However, Amazon remained adamant about maintaining its current $9.99 price point for new releases, and after a tense stand-off, stopped selling books from Macmillan and its family of imprints on Friday (though the publisher’s titles could still be purchased from third party vendors on the site.)
According to The Los Angeles Times, Sargent placed an open letter, on Saturday, in a special edition of the Publishers Marketplace e-mail, to argue Macmillan’s position. In the letter he states: “I gave them [Amazon] our proposal for new terms of sale for ebooks under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles.” He concludes, “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.”
Because Macmillan is so large and publishes a number of well known authors, including the bestselling Janet Evanovich and 2009 Man Booker Prize Winner Hilary Mantel, a long term ban on its titles was not feasible for Amazon. Yesterday, the book-seller “capitulated” to the publisher’s terms in a statement posted on a Kindle message board by the “Amazon Kindle Team”. “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.”
The winner in all of this may be Apple, who now has a level playing field with Amazon on eBook prices. But, Amazon hopes that other publishers that agree to maintain the $9.99 price point and a base of loyal Kindle users will tip the scales in their favor. Ultimately, Amazon has left it up to the consumer to decide what is a fair price for an eBook.
