Amazon, Macmillan Fight Over Ebook Prices; After Amazon Removes Macmillan Titles, It Caves To Higher Prices

from the too-bad dept

On Friday, there was a sudden realization that Amazon had removed books published by publishing giant Macmillan, apparently over a dispute concerning ebook pricing. Of course, Amazon wasn't just removing Macmillan ebooks, but the physical books as well. After a bit of back and forth over the weekend, Amazon caved in and accepted the way Macmillan wants to price books, which means that Macmillan sets the retail price, and Amazon gets a cut. Previously, Amazon had paid a wholesale price and then got to set the retail prices itself.

I had been under the impression that when manufacturers tell retailers what the end user price is, it's a form of price fixing, but apparently not...

Of course, what may seem odd about this is that it appears Macmillan will make less per ebook under this model. That's because with its old wholesale pricing, Amazon was actually losing money on every ebook sold. As the NY Times notes:
In the model that Amazon prefers, publishers typically collect $12.50 to $17.50 for new e-books. Under the new agency model, publishers will typically make $9 to $10.50 on new digital editions.
So why are publishers specifically trying to limit their own profits from ebooks? Because they're afraid of ebooks cannibalizing hardcover book sales, which is why they're also looking to delay ebook releases. In fact, in this case, Amazon was given the choice of either increasing the retail price for consumers on Macmillan ebooks, or getting them many months later. All in all, this looks like publishers hurting themselves, yet again, by going against what consumers want in a misguided effort to preserve the way things used to be. Yet, in an age when users are punishing authors and publishers who don't treat them right, this could backfire in a big way.

Filed Under: ebooks, pricing
Companies: amazon, macmillan

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  1. identicon
    Anonymous Coward, 1 Feb 2010 @ 5:01am

    amazon got a lot of flack for this on some of the other tech sites. things like "overstepping" and "monopoly" were thrown around. but i don't think that is fair.

    while i doubt either amazon or macmills cares about me specifically, amazon is thinking of me more than macmills is. amazon wants me to buy stuff. lots of stuff and all from amazon. therefor they do everything in their power to make this easy and afforable.

    the thing is this, hardcovers could be $50 and i'd still feel ripped off by a $15 ebook. they could be $100 and i'd still not buy a $15 ebook.

    with a hardcover i am getting something. i have a book that is well bound, durable, and usually printed nicely.

    for the ebook, i am getting a text file. a text file that is only mildly altered from the text file that was already created to make the printed book. it may not even come with a picture of the cover.

    i'd rather they delay the ebook and sell it at a reasonable price. the tiered system is flawed, yes, but at least we are used to it. i can wait for a book. macmills is banking on me still being able to afford it. and at $12-$15 an ebook, the answer is no.

    (but there is the real danger, no? if i wait for the book, i may not actually buy it. ever.)

    i have a nook. so far everything i have read on it has been in the public domain. here is where ebook readers are going to shine. if you have an ebook reader you don't have to pay for public domain books ever again.

    but when i start buying books (because i will) i will be very cautious about what I get. amazon had it right. if the ebook is a few cents cheeper than the paperback, why buy it?

    especially when i can find a free jules verne book to read.

    macmills thinks that it isn't competing with anyone since it alone puts out macmills books. but as much as i love auther X, if his stuff is too expensive, i'll read author Y. or play video games.

    this is starting to ramble, but the point is this: amazon was not the bad guy in this. sure it flexed its muscles. it had too. and it a way they did it for us. they lose if we don't buy this stuff.

    and macmills doesn't care about us. or the authors.

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