iPad debut ignites price war between Amazon and publisher Macmillan
According to The Wall Street Journal, Macmillan CEO John Sargent visited Amazon Thursday to negotiate a new deal for e-book sales. Talks apparently did not go well, as he was later informed that his company's books would only be available for sale through third parties on Amazon.com.
"Amazon, the leading e-book seller in the world, now faces the prospect of publishers demanding the same terms they receive from Apple," the Journal wrote. "People familiar with Amazon's action said the move by the online retailer, which targets not only e-books but hardcover and paperback titles, signals its unhappiness with the prospect that e-book prices may rise in coming months as a result of Apple's e-book debut."
Just days earlier, Apple co-founder Steve Jobs had a conversation with Journal tech reporter Walt Mossberg in which he said that iPad book prices would be "the same" as the cost of e-book content for Amazon's Kindle. Currently, Kindle bestsellers go for $9.99, but a previous report said Apple wanted to offer bestsellers for between $12.99 and $14.99.
The apparent troubles between Macmillan and Amazon suggests that Jobs' comments to Mossberg were meant to imply that Amazon book prices would eventually increase to match higher costs on the iPad. Jobs also noted taht book publishers were "withholding their books from Amazon, because they're not happy with it."
On Wednesday, Macmillan was highlighted as one of five high-profile book publishers that would be a part of the iBookstore, a marketplace within the new iPad iBooks application. Apple's iBookstore business strategy allegedly employs the same 70-30 split in favor of content providers as the existing iPhone App Store.
"It is expected that publishers will now seek to do business with Amazon and other e-book retailers on the same terms as with Apple," the Journal wrote. "By setting their own prices, publishers would be able to eliminate discounting on Amazon and elsewhere that they believe threatens the long-term business model of publishing."