Slash LaneWhile Amazon said a week ago it would "ultimately" have to concede to Macmillan's demands for higher e-book prices, a formal settlement between the two companies came over the weekend, and Macmillan-published books went back on sale on Amazon.com. The Wall Street Journal noted that the agreement between the two parties will likely "set the stage" for changes in the e-book market in 2010, as Apple enters the fray with its new iPad.
"By agreeing to accept a new pricing model, Amazon has publicly acknowledged the sudden emergence of a rival that may not only threaten its highly popular Kindle franchise but also its total domination of e-books," the report said. It noted that new, higher prices, at least for Macmillan, would begin when the iPad goes on sale in March.
It is Apple's entrance into the e-book market, with its new iBooks application and accompanying iBookstore, that has caused a new rift between publishers and Amazon. Following Macmillan's lead, Hachette Book Group and HarperCollins have both announced their intent to ink new deals with more flexible price structuring with Amazon.
Based on their content deals with Apple, publishers will offer new hardcover bestsellers for between $12.99 and $14.99 on the iPad's iBookstore. Publishers want to offer books under the same pricing structure on Amazon's Kindle.
Last week, Hachette CEO David Young said the price increase is not a way for publishers to make more money on books. In fact, he said, they will make less on each e-book sale under the new model, but authors and agents will be able to make money on every digital sale. He and others in the publishing world believe the new prices will "protect the long term viability of the book marketplace."
While Amazon has dominated the e-book market since its e-ink Kindle reader debuted in 2007, Apple's entrance with its $499 iPad has forced the bookseller to renegotiate its content deals under pressure from publishers. With Hachette, Macmillan and HarperCollins, three of the five major publishers highlighted by Apple at its iPad unveiling have revealed their interest in higher e-book prices.
The moves confirm comments from Apple co-founder Steve Jobs, who said that publishers were upset with Amazon and could begin to pull their content from the bookseller. Declining to elaborate, he simply said that the Kindle and iPad would offer bestsellers at "the same" prices.
The Journal also noted that the only major publisher that has not struck a deal with Apple for iPad content is Random House. The company is said to be "studying the matter."
Charles Martin
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19 Comments
I own the first Kindle. Bought it the day it released. I am really looking forward to this device as once you own a kindle you begin to wish you could do more with it other than just read books. If the prices for books rises a little, I'm okay with it.
I am a little concerned with read a backlit LCD. The kindle is very eye comfortable. But I do admit I read my computer screen much of the day and I am used to it. I think the kindle did some great breakthrough work here. It just needs to do a little more than just books. We're in a market where convergence wins. Kindle being so specific wasn't going to last against competitors that offer multiple features above and beyond just ebooks.
Thanks Apple, thanks for that. A great win for the consumer there.
I have to agree.. thanks Steve, really appreciate the fact I'll have to pay five or so extra bucks a book now.. on my kindle for my iphone no less.
hope the few extra bucks there a year really helps Apple out.
Thanks Apple, thanks for that. A great win for the consumer there.
How come Amazon's pricing is now current Apple's hardware
To compare the two situations - the run in to the launch of iTunes Store and iBooks Store.
iTunes Store:
Opened over a year after iTunes itself and the iPod, so there was already a large number of iPods and iTunes users in the market.
Apple plays hard-ball refusing record company demands to sell only whole albums and arguing for a cheap 99 cent per track price.
Apple makes one concession to give them the DRM.
iBooks Store
Opened at the same time as iPad, so no installed user base.
Already one competitor in the market with a device and store set-up.
So, Apple decides to woo content providers by giving into their demands for higher prices for books.
The 'hardback' book concept is ridiculous in the digital domain - but it is clear that publishers in the past have clearly recouped initial costs and marketing with an initial sell-thru of these higher priced books. Clearly for much-hyped eagerly awaited novels like the Harry Potter series this probably reaps massive profits.
So while the consumer won with the release of the iTunes Store, we're being stiffed with iBooks - I hope that perhaps Apple start playing hardball if the iPad/iBooks establishes itself.