Amazon capitulates in Macmillan e-book disagreement: Higher e-book prices ahead?
January 31, 2010 | 9:23 pm
It appears the feud is over, with the publisher winning this time. Turns out Amazon’s pulling Macmillan titles was just a token gesture.
Amazon has posted the following announcement to its Kindle Community forum:
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.
I can’t help but find this decision disappointing.
As I said before, allowing the publisher to set the standard retail price is anti-competitive. (Attorney C.E. Petit explains more about that aspect, in a post Paul Biba has since reprinted on TeleRead.) If the publisher is allowed to dictate these terms to every e-book vendor, then it becomes harder for consumers to find a bargain.
On the other hand, it’s interesting that Amazon doesn’t mention that Macmillan claims its $14.99 price point represents the high end of a variable pricing scheme that could range down to much less than Amazon’s $9.99 after a time. If Macmillan is serious, that could be good for the consumer—especially if it applied universally, to places such as Fictionwise or BooksOnBoard as well.
On the gripping hand, as a commenter to my previous post on this story pointed out, Macmillan has had a pretty shoddy track record of instituting variable pricing so far, with e-books still selling at full hardcover prices at Fictionwise on titles that have long since gone to paperback in print. It would be nice to see a little “variable pricing” love there.
I suppose we could say that Amazon’s $9.99 pricing has driven Macmillan to compromise with its $13 to $15 price range, which is much better than $20-$30 for new hardcovers. If so, that is definitely an improvement.
And the variable pricing will allow Macmillan to get a better idea of the price elasticity of demand for its books and might end up resulting in even lower prices overall.
I would not be surprised if other members of the “big six” publishers followed suit with similar agency arrangements, despite Amazon’s “belief”. It just does not make sense for them not to.
It is some consolation that the e-book market is still relatively young, and there is still plenty of room for things to change. And the same consumers who have announced they will boycott books priced over $9.99 and have complained so vociferously about e-book “windowing” tactics now have something else to blame the publishers for.
Here are some other interesting editorials and analyses of the situation from Charlie Stross, Tobias Bucknell, Andrew Wheeler, Henry Blodgett (Silicon Alley Insider), TechCrunch, and GalleyCat. Here are MobileRead discussion threads on the original incident and Amazon’s capitulation.
Previous coverage on TeleRead:
- Amazon removes Macmillan titles from direct sale
- NY Times: Amazon pulled books because Macmillan wants iBooks-style deal
- Macmillan CEO tells his side of Amazon spat
Related: Techmeme roundup.