Saturday, February 27, 2010, 09:00 am PT (12:00 pm ET)
Amazon frantically phoned publishers as Steve Jobs unveiled iPadApple chief executive Steve Jobs was still standing on stage addressing an auditorium full of media reps last month when higher-ups at Amazon began phoning publishers in an effort to extract details on the deals they were given to supply content on the new iPad device he was touting.
The move came as the online retailer and eBook reader pioneer was pressing its publisher partners to agree to long-term licensing deals that would guarantee Amazon Kindle owners would always be afforded the lowest possible price for content, in exchange for publishers seeing higher revenues from each sale, according to the New York Times.
But as fate would have it, Jobs — the so-called king of new media — would use his leverage, and that of the iTunes Store's distribution model, to persuade many book publishers to price their most popular content for the iPad inline with that offered for the Kindle.
As an added twist, those publishers — including Macmillan, Hachette Book Group and HarperCollins — agreed to price bestsellers between $12.99 and $14.99 for the iPad, then turned around and demanded the same structure from Amazon. This translated into a cost increase for Kindle bestsellers from their historical $9.99 fetching price, spurring a price war between the online retailer and book publishers.
As it stands, a good percentage of Amazon's e-publishing contracts still reportedly operate on a month-to-month cycle, as those publishers are constantly seeking more flexibility to market their content. Meanwhile, the retailer's discussions with newspapers and magazine are said to be more complicated.
According to the Times, this group of publishers now finds itself torn between the allure of offering more advance, full-color, and media rich content on the iPad with the prospect of losing existing subscribers to the Kindle's black-and-white E-Ink medium.
"[So], to avoid losing their current subscribers on the Kindle, some publishers are considering signing the new Amazon contract now and offering a free, limited application for their content on the iPad," the newspaper reported. "At a later date, when an Amazon product can display richer types of media, publishers could release a paid product that looks and works the same across multiple devices."
The move is said by one unnamed publishing executive to exhibit all the signs of an ensuing price war for digital print content that could extend for years on end.
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