Apple wants to price tablet hardcover bestsellers $13-$15 - WSJ
A new report Tuesday evening from The Wall Street Journal claimed that Apple and book publishers are looking to hammer out a deal that would offer standard pricing with Apple taking a 30 percent cut of sales. The variable pricing structure would also allow some books to be priced at $9.99.
Specifically named in "serious negotiations" with Apple late Tuesday was HarperCollins, which was stated by the Journal weeks ago to have had talks with the hardware maker.
The report notes that Apple's approach is different from Amazon, which has focused on giving "bargain-basement prices" for books. Apple would rather charge a higher premium for its content, sources told the Journal. It said the tablet will create a major battle between Apple and Amazon over how books are priced and distributed.
It also said that while Apple would recommend prices of $12.99 and $14.99 for new bestsellers, publishers would be able to establish their own prices and "re-set the rules" with the tablet.
Book publishers have apparently been kept in the dark as to the exact specifics of Apple's device. That has left some of them reluctant to make deals before learning all of the details.
The report noted that many executives expect to have more clarity after Wednesday's presentation at the Yerba Buena Center for the Arts in San Francisco, scheduled for 10 a.m. Pacific time, 1 p.m. Eastern.
"While some of the largest publishers may not be up on stage Wednesday," the report said, "their books could appear on the device when it is shipped in March.
However, Amazon allegedly takes a loss on e-books that sell for $9.99. The company loses about $4.50 on each sale in order to maintain its dominant position in the market.
While publishers would get $14.50 for a typical bestselling e-book from Amazon, Apple's model — with the Cupertino, Calif., company taking a 30 percent cut — would leave publishers with just $10.49.
"But there is nevertheless a strong draw: In adopting the Apple model, the balance of power would shift at least partly back to publishers, which regain control of pricing," the report said. "In setting higher prices, they could provide a level playing field for all e-book retailers. The potential for publishers is that the device may generate greater volume for e-book sales."
One publish executive surmised that book companies will be left with a choice to embrace Apple's device and hope it attracts more people to e-books, or stick with Amazon's model which offers greater revenue.
AppleInsider will have live coverage of Apple's product unveiling from San Francisco Wednesday. Be sure to visit live.appleinsider.com for up-to-the-minute updates from inside the Yerba Buena Center for the Arts.