News You Could Do Without

by Mike Masnick


Filed Under:
ebooks, pricing

Companies:
amazon, macmillan



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.

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  1. icon
    The Anti-Mike (profile), 1 Feb 2010 @ 5:44am

    Re: Re: Re: Just like hardbacks / Paperbacks ?

    I am not dense. Most of his "actual" scarcity is artificial in nature, limits set by someone selecting to stop producing something, rather than any true scarcity.

    There is no shortage of cotton, no shortage of t-shirt plants, and no shortage of printers to make them (cheap too!). The only scarcity is when a human decides to order 50 of something instead of 1000.

    Hardcover books are the same sort of thing, the choice is made not to offer a paperback or digital version right away, and the hardcover books are often in limited supply (first printing, second printing, etc... more artificial scarcity). It isn't any different, there is no shortage of paper or printing presses, just a human choice to limit production (artificially creating scarcity).

    There are few true actual scarcities, time being one of the very few.

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