Amazon.com Caves In To Macmillan
Amazon.com has announced it will capitulate to the demands of publisher Macmillan’s demands on pricing of e-books. No doubt it means far more to Amazon.com to have Macmillan books on its “shelves” than it does to continue to fight over e-book pricing.
According to reports, and confirmed by Macmillan, the dust-up occurred over e-book pricing. Amazon.com has been setting prices for Kindle books itself, sticking to a one-size fits all model of $9.99. However, Macmillan wanted to set its own pricing, at around $15 for new publications, and a sliding model as the book ages.
Does it sound familiar? It sounds a lot like the tiered model Apple now has in the iTunes store, which it fought so hard against for so long.
Here’s what Amazon.com said on their Kindle Community page:
Dear Customers:
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.
Of course, one has to ask: since when does an e-book (or an iBook) cost $15 to produce? “Needlessly high,” is what Amazon.com said, and that’s true. Let’s be clear, also. It’s already known that Amazon.com pays whatever the publisher wants, and sells the book at $9.99. It, like Apple previously, is trying to foster consumer demand by keeping the price low.
Does Proctor & Gamble tell Target how much to sell their products for? No, it doesn’t. So this really makes little sense. However, since Macmillan will withhold its publications unless Amazon.com capitulates, Amazon.com has little choice.
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